Council OKs budget cuts that create surplus
April 2, 2010
By Tim Pfarr
In-house city attorney eliminated, funds for affordable housing trust fund slashed
At its March 16 regular meeting, the City Council approved an $186,000 cut to the operating budget. Through the cut and re-appropriation of other city funds, the $364,000 budget deficit has been changed to a $53,000 surplus. This also increases the year’s expected ending fund balance from about $1.46 million to about $1.88 million.The City Council approved the cuts with a 5-1 vote, with Councilman Sonny Putter dissenting and Deputy Mayor Steve Buri absent.
Interim City Manager Rob Wyman recommended the cuts to the operating budget after being directed by the City Council at the Jan. 12 meeting to cut operating expenses by 3 percent.
The position of in-house City Attorney Lisa Marshall has been terminated in favor of contracting attorney duties. Dawn Reitan, who works with the Bellevue law firm Inslee Best, will take over as the city’s contract attorney. She previously worked as the city’s contract attorney for about five years prior to the hiring of Marshall in 2006.
Marshall worked three days a week and was considered three-fifths of a full-time employee; $73,454 was allocated to her position. Reitan will attend the remaining City Council meetings this year in addition to performing about 15 hours of work for the city per month. At $200 per hour, the cost of having a contract attorney will be about $38,000 per year.
Mayor John Dulcich said he wishes Marshall the best of luck in her future endeavors.
“It’s always tough when you have to make changes,” he said in an interview after the meeting.
However, he said the move was a wise one, given that it will be more cost-effective and that Reitan and Inslee Best have experience working with the city.
“I think it’s a real good move,” Dulcich said. “Inslee Best is a real good firm.”
Also through the cuts, the amount of money allotted to the city’s housing fund with A Regional Coalition for Housing will be reduced from $53,000 to $3,000 for 2010. Wyman said this would be a one-time cut. However, the city will still pay is annual membership fee of $9,960.
“That $40,000 or $50,000 is another staff member’s job,” Councilman Bill Erxleben said about the reduction at the meeting.
Councilman Rich Crispo said cutting the funds this year is not indicative of how council members feel about affordable housing.
“We support affordable housing, but we’ve had a negative budget trend for the last three years,” Crispo said in an interview after the meeting. “This year, we’re just taking a rest from doing that.”
The city has contributed to an ARCH housing trust fund for about 10 years, and it has contributed a total of about $500,000.
The money the city has contributed to ARCH has gone to purchase about two-dozen units of housing in King County. ARCH has assisted in building 12 units of affordable housing in Newcastle, in the Coal Creek Terrace Apartments.
Objections to slashing affordable housing funds
Karin Williams, Housing Development Consortium suburban cities outreach director, attended the meeting to support funding for affordable housing.
“It is disappointing that Newcastle cut ARCH funding without a mechanism in place to ensure that Newcastle has housing affordability,” she wrote in an e-mail after the meeting. “It should be possible for people who work in Newcastle to afford housing and still have enough money left for basics, like groceries, gas and childcare.”
At the meeting, Putter motioned to keep $40,000 in the housing fund. However, his motion failed 1-5.
At the meeting, Putter cited the emphasis the city places on affordable housing within its comprehensive plan, and he said cutting the funds is violating that plan. In an interview after the meeting, he said cutting the funds is a travesty.
The affordable housing portion of the comprehensive plan states the city “should continue to provide financial or technical assistance to establish affordable housing for low- and moderate-income housing.”
It also states the city “should continue to explore coordination of incentive programs with other cities and King County to develop common affordable housing guidelines and reduce administrative costs.”
In 1997, Renton challenged Newcastle’s availability of affordable housing through the King County Growth Management Hearing Board, but the board ruled that Newcastle’s comprehensive plan yielded sufficient affordable housing.
Public works director
Also through the cuts, interim Public Works Director Steve Roberge will remain in charge of the department until July, when the city hires a permanent city manager, and this will save about $84,000. Roberge, who primarily works as the city’s community development director, will be given a 15 percent raise for his additional duties.
Furthermore, an accounting clerk will be reduced from a full-time employee to three-fifths of a full-time employee, which will save about $14,000.
“Cutting any more than that really starts to impact service levels,” Wyman said in an interview after the meeting about all the cuts that were adopted.
Re-appropriation of funds, finalization of capital cuts
Aside from the cuts, the gas tax revenue the city collects from the state have been re-appropriated, and they will go directly to street maintenance. Previously, the city’s gas tax revenue was used to help fund capital projects, and the city would pay for street maintenance with money from its general fund.
The change removes $230,000 worth of expenses from the operating budget, as the general fund is included in the operating budget.
Also at the meeting, the City Council finalized $745,000 of cuts it had made to the capital budget in January. This included cuts to funds for 129th Avenue Southeast street improvements, northeast Lake Boren improvements, city park signs, historical signage, City Hall studies and the Lake Boren Maintenance Building.