Issaquah Press.com: Issaquah offers severance package to employees as officials face $3.6 million shortfall

The city of Issaquah faces a $3.6 million budget shortfall, forcing city officials to consider layoffs and program cuts to rein in expenses.

Major sources of dollars for the city have sunk. Money raised through building permit fees and sales tax are down on account of the recession.

City Finance Director Jim Blake presented a revised 2009 budget forecast to members of the Council Services & Operations Committee Monday night.

Blake said the number of layoffs would hinge on the number of city staffers who accept a voluntary severance package. He said only a handful of volunteers had stepped forward so far. The program is open to all city employees.

"Anybody that takes a severance package decreases the number of people that we may potentially have to lay off," Blake said.

The finance director painted a stark picture for committee members. He said the city might be unable to afford annual road repaving projects next year. Although the city would be able to cover some annual commitments — such as its obligation to Village Theatre — Blake said money would be tight.

"Other than that, we'll be lucky to come up with enough of the reserves to cover the replacement of police cars," he said.

Blake used data from the first two quarters of the year to produce the forecast.

"Based on the information we're seeing, the current situation is going to continue through 2009," he said. "More or less, from what I'm kind of seeing, from information going on, is it's likely that it will continue this way into 2010 and probably all of 2010."

Officials are also in discussions with department chiefs and labor groups to defer employees' cost-of-living increases and eliminate passing savings from the city's Public Employees' Retirement System to employees. Blake said the measures would help the city save money and possibly jobs.

Mayor Ava Frisinger detailed other cost-saving measures in a July 20 letter to the City Council.

"Throughout 2009, we have carefully managed our expenditures to reflect this decline in revenues," she wrote. "As you know, we've already deferred the purchase of supplies and equipment, limited the cost of city contracts and suspended staff training that is not required. We've also waited to fill any vacant positions within the city."

Blake pointed out bright spots, too.

He said the city would pocket building permit fees when construction nears for a Swedish Medical Center hospital campus in the Issaquah Highlands.

Councilman Joshua Schaer, a Services & Operations Committee member, credited city staffers for taking steps to cut costs throughout 2009.

"We've done a good job saving money," Schaer said. "I looked back several months at our forecasts and, you know, we've been coming in under. The expenditure side has been pretty good. It's the revenues that are hurting us from what I can tell."