Olympia achieved a balanced 2024 operating budget by utilizing $7 million from fund and stabilization reserves and reducing the operating budget of city departments, City Manager Jay Burney announced at the council meeting on Tuesday, November 21.
The city council approved the balanced budget and directed the staff to bring forward final ordinances for consideration on December 12.
In his presentation, Burney highlighted that the city initially faced a $14 million deficit in August when beginning the balance budget process. The city addressed some financial challenges through adjustments to revenue estimates, corrections to budget entries, and proposed general fund operating reductions across the city departments of $937,000 for 2024.
The city manager also noted that the budget relied on $2.7 million from fund balances and $4.3 million from budget stabilization reserves. By making these adjustments and utilizing reserve funds, Burney reported that the proposed 2024 budget was now balanced and ready for the council's approval.
"None of these reductions here slow down our ability to deliver our core services or delay any important project priority or program," Burney emphasized.
Burney provided an update on potential uses of funding from Proposition 1, the public safety sales tax approved by Thurston County voters.
On November 7, the voters approved Proposition 1, which "authorized an additional sale and use tax at 0.2% to be used in law enforcement protection, including hiring additional sheriff deputies and associated infrastructure, additional prosecution and proportionate public defense services, and election security infrastructure."
The city manager estimated Olympia would receive around $2.1 million to $2.2 million annually from Prop 1 funds. He proposed using approximately $1 million annually to cover ongoing costs for the city's body camera program for police officers. "ARPA dollars initially funded that program. This year would have been the first to hit the operating budget as an ongoing expense. So, the passage of Prop 1 is timely."
That would free up about $1 million in the general fund. Burney proposed allocating operating budget additions to items identified as priorities:
"We had a lot of conversations about the need to add more resources within the legal department. We were able to add a paralegal to the original budget proposal. This new proposal adds another deputy city attorney to go with that paralegal," Burney said.
Burney presented the proposed additions to the 2024 budget, organized according to the city's comprehensive plan focus areas. He said he reviewed these additions with the city council, which led to identifying new items that would further the "city's progress on its community vision."
A notable update in public safety is the additional $75,000 to the fire apparatus reserve fund. That would increase the fire apparatus reserve to $425,000.
Burney mentioned they have circled back on the Senior Services Home Share requests of $27,000 that can be funded out of Home Fund reserves.
The Thurston Conservation District that would assist Olympia in the urban farming comprehensive plan is funded for $203,000. The city will use Economic Development reserves to use as a one-time startup.
Burney said the finance committee approved the additional $10,000 for the Neighborhood Matching Grants Program.
He also proposed a $5,000 increase for the council's training and travel budget, which would make $23,000 a year to provide each council member opportunities with potential travel out and in the state.
The L&I funding and the deputy city attorney position are also included in the proposed additions.
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BobJacobs
Municipal budgets are required by law to be balanced, i.e. they cannot show a deficit. And so in a narrow sense they are always balanced.
In a broader sense, hidden deficits can be present in many ways. For instance, if street maintenance is not kept up, a deficit is created that will have to be paid later. Such deficits are functionally exactly like loans.
For many years Olympians have recommended that the city form a Budget Advisory Committee to advise the council and manager on budget matters. Such a group would be able to bring focus to these broader issues, in addition to recommending operating efficiencies. This would also bring "transparency" to city government, a concept that is widely touted but not always implemented. No Budget Advisory Committee has ever been formed.
We have advisory committees for city utilities, parks, arts, and etc. Why not for the budget? There are many residents with state budgeting experience who could help our city.
Bob Jacobs
Tuesday, November 28, 2023 Report this