Nickels' budget calls for furloughs, using rainy-day funds

In his final budget as Seattle's mayor, Greg Nickels proposes eliminating more than 300 city jobs, requiring furloughs from all employees and raiding the city's rainy-day fund.

The budget also calls for an 8.8 percent increase in City Light rates, beginning in January.

"I leave our fiscal house in good order," Nickels told the City Council on Friday, amid applause from a packed room. "I wish the best for the next mayor."

He also said his budget has no "draconian" cuts to basic services.

Nickels, who lost his re-election bid in August, says he's keeping his promise to add police officers in his new budget, 21, and isn't cutting human services, including a program to stem youth violence.

The extra police officers will cost about $2 million, said budget director Dwight Dively.

Nickels needed to trim $72 million from his budget because of the recession, which meant lower revenues in many of the city's funding sources.

He is closing that gap by cutting 4.4 percent from the 2010 budget, or about $41 million.

While the mayor proposes eliminating about 310 positions, including 54 managers, only 166 of those positions are presently filled, Dively said.

Those facing layoffs have been notified, and Dively says he expects many will find other jobs in City Hall. Layoffs would occur March 2.

Fourteen city unions agreed to a two-week unpaid furlough, saving another $6.5 million, and Nickels said he will ask nonunion workers to take a furlough as well.

The rest of the gap will be filled by tapping the city's rainy-day fund, taking out $25.4 million, leaving about $5 million.

It's the first time since Nickels was elected in 2002 that the fund has been nearly drained.

If approved by the City Council, the operating budget for next year would be $905 million. The council is expected to adopt the budget in November.

Dively said City Light rates will increase because the city isn't making as much money selling surplus power as had been anticipated.

As demand plunged, Seattle is making only about half of what it had hoped to earn from selling power. Still, he said, the rate will be lower than it was when Nickels took office.

"The new administration will inherit a very good budget," Deputy Mayor Tim Ceis said.

Also in the budget:

• The city will continue work on the new Alaskan Way tunnel, paying for utility work and sea-wall replacement.

• Public libraries will take a 5 percent cut, about $2.8 million, and will have another weeklong closure. That means only six libraries will be open seven days a week. The rest will be open five days. Those open every day will be the Central Library and Douglass-Truth, Lake City, Ballard, Rainier Beach and Southwest libraries.

• The budget would eliminate the city's "head tax" on employees who drive to work, which now brings in about $5 million a year, but would retain the parking tax. Business leaders had opposed the $25 head tax.

• The budget includes money for the "missing link" on the Burke-Gilman Trail in Ballard to link the rest of the trail with the Ballard Locks. The project will be funded by revenue from the 2007 King County open-space levy, Bridging the Gap funds dedicated to bike and trail improvements, and grant funding.

• Nickels said he's succeeded in getting the city's potholes filled, an early pledge of his administration. Since he took office, he said, the city's filled 446,000 potholes, almost one per city resident.

The city budget is online at http://www.seattle.gov/financedepartment/10proposedbudget/default.htm

Susan Gilmore: 206-464-2054 or sgilmore@seattletimes.com