Our current reality
Like many other local governments, the City of Tukwila faces an immediate budget shortfall due to the coronavirus pandemic. The City is losing revenues from sales, gambling and utility taxes
as a result of the Stay Home, Stay Healthy order. Additionally, property tax deadlines have been pushed out, and State-sanctioned timelines for remitting sales tax have been extended. This means a delay for the City to receive its property and sales tax revenues.
What this means
From what we now understand, this economic crisis will extend into 2021 at a minimum. The City of Tukwila projects the loss of $12 million in revenues this year and a loss of $6 million in
revenues in 2021. Such revenue losses require expenditure reductions, resulting in an impact to City services.
Services the City must provide
State law outlines a few specific City services that all code cities must provide, such as a chief law enforcement officer, and city planners to enforce the Growth Management Act.
Most City services are established by City Council policy based on community priorities. Standards for these specific service decisions – like law enforcement response times or human services funding – are often subject to legal requirements. For example, when a jurisdiction decides to provide fire services, training and other activities are legally mandated with that service.
Tukwila’s adopted Strategic Plan provides much of the policy guidance for services. Our biennial budgets are developed to be in alignment with the five goals outlined in the Strategic Plan.
Supplementing the General Fund with other City funds
Some of the City’s enterprise funds are seeing lost revenue – such as the water fund, which has fewer customers during the shutdown. Funds covering the Public Safety Plan have already been committed to those projects and cannot be held back at this time. Any interfund loan made from one fund – such as the sewer fund – would need to be paid back in a reasonable period of time and with market-rate interest.
Possibility of other available revenues
The Federal Government has provided some funding for cities with 500,000 or more residents. The State is also distributing additional federal funds to cities based on population. With
Tukwila’s population of 20,000 residents, our share is proportionately small. However, it is important to know that this funding is being made available to cities to cover costs associated with the pandemic, not for lost revenues.
The reality is that the City’s current budget shortfall has very little to do with pandemic associated spending, and everything to do with lost tax revenues.
Supplementing the General Fund with other City funds
Some of the City’s enterprise funds are seeing lost revenue – such as the water fund, which has fewer customers during the shutdown. Funds covering the Public Safety Plan have already been
committed to those projects and cannot be held back at this time. Any interfund loan made from one fund – such as the sewer fund – would need to be paid back in a reasonable period of time and
with market-rate interest.
Utilizing contingency or reserve funds
The City has both contingency and reserve funds (unassigned fund balance). It is expected that more than half of the contingency fund will be used in 2020 to deal with the budget shortfall. If
the economy does not improve, any remaining contingency funds will be used up in 2021.
By their nature, these funds must keep sufficient monies on hand for cash flow purposes or dealing with future emergencies. It is neither prudent nor possible for the City to spend all of its contingency and reserve funds to address this shortfall.
Actions for reducing expenditures
Consistent with other cities in the region, nearly 70% of the City’s general fund is spent on personnel. While all departments have slashed their budgets for items like supplies and professional services, it’s not enough savings to preclude staff cuts of some nature.
The City has also enacted a hiring freeze, taken steps to control overtime costs, removed nonessential training and travel, furloughed part-time staff, and reduced capital projects. Combined, these actions reduced City expenses by $4 million. Staff has identified an additional $2 million in other savings, such as delaying purchases for the City’s fleet and reducing or eliminating non-essential services.
The City will achieve the additional $6 million in savings through a combination of actions. Staff anticipates the City will use approximately $4.8 million in contingency through the end of 2020.
These actions impact City employees. The largest represented staff group is Teamsters, in four different bargaining groups. Three of them voted for furloughs, reducing their hours from 40 per week to 36 per week, with the associated 10% pay reduction. One unit voted to implement the terms of their contract, which has resulted in the layoff of five employees. Non-represented staff are also being furloughed with a 10% pay reduction and associated hour reduction. The staff leadership “Admin Team” is taking a 10% salary reduction with no reduction in hours.
These furloughs and staff reductions do not affect either the Tukwila Police or Fire Departments.
What this means for City services
City services will be impacted with reduced staff and reduced hours. Many City employees are currently telecommuting due to the pandemic,
with the buildings on the City Hall campus closed to the public. When normal operations do resume, City Hall and the 6300 building next door will be closed to the public every Friday through the end of the year.
Starting June 5, 2020, staff will telecommute on Friday mornings and not work on Friday afternoons. City services (such as pet licenses, construction permits and human services requests) will not be fulfilled – either virtually or in-person – on Friday afternoons for the remainder of 2020.
Staff reductions in our maintenance and trades unit, plus the associated hiring freeze necessary to achieve needed expenditure savings, means reduced services in our Streets Department. This means, for example, fewer litter patrols, longer stretches between vegetation management on the roadsides, or longer response times for various requests. Safety-related tasks will be prioritized over issues that do not affect the well-being of the Tukwila community. However, residents will notice a reduction in service levels from our Streets Department throughout the city. Although the City understands many of these services are important to the community, with reduced staffing there must be reductions in service levels.
As of this writing, the Parks and Recreation Department is making plans to reopen when allowed under the Governor’s Safe Start order. Staff anticipates some reduction in hours at the Tukwila Community Center once it reopens, with an associated reduction in service levels. More information on parks and recreation programming will be released once there is better clarity on when these activities can resume.
What comes next
Staff will be providing regular updates to the City Council on the financial status of the City, with ongoing monitoring of revenues and expenditures. Interested community members are encouraged to sign up for the weekly Council packet email at TukwilaWA.gov/AgendaPacket.
City staff is beginning the preparations for the 2021/2022 budget, and Tukwila will need to address the projected $6 million shortfall in 2021. This means there will likely be additional reductions to services in 2021 associated with these needed expenditure reductions.
The City will begin its biennial budget process this summer. In the fall the Administration and Council will work in collaboration to achieve a balanced budget for 2021 and 2022. Significant opportunities will be provided for the community to weigh in.