On the cusp of budget shortfalls

Auburn to hire consultant to complete a financial sustainability study

Auburn’s leaders have spent a lot of time lately jawing about the city’s uncertain financial future.

As financial heads in the know have informed those leaders, the city’s expenses are just starting to outpace revenues, and without action, Auburn’s budget will tilt out of balance, starting with the 2021-2022 biennial budget and worsen from then on.

At a special budget meeting Monday, Shelley Coleman, the city’s financial director, told the City Council that while Auburn continues to grow, and the demand for services increases, and labor costs rise, tax-limiting measures have put the squeeze on the city’s flexibility to generate revenues.

A further complication is that the city has already used up its banked capacity and cannot generate property taxes above the maximum, 1 percent annual increase that state law allows.

Also, while the population city staff now serves has ballooned since the Great Recession, staffing is stuck at pre-recession levels.

None of these problems, Coleman noted, are unique to Auburn.

“Businesses want services and citizens want services,” Coleman said. “We are up against a revenue situation of maintaining and sustaining those services.”

Recent ideas tossed around number: imposing the city’s first B&O tax; presenting a tax increase measure to voters; and cutting the city’s work force.

So what’s a city to do?

To figure that out, the City Council gave Mayor Nancy Backus the go-ahead to negotiate a contract with the Seattle-based Berk Consulting Agency to undertake and complete a financial sustainability study.

Coleman estimated the cost to the city would be about $67,000, and that the work would be done by the close 2019.

In part, the aim of the study will be to identify revenue-generating measures that would have a positive affect on the city’s aforementioned, uncertain financial future, and to assemble data City Council members could use to make their determination on how to proceed.

Berk’s track record includes a recently-completed financial study for the SCORE jail in Burien, and a study for the city of Shoreline.

“They certainly have the background for what we need here,” Councilman John Holman said of Berk. “I am not totally convinced we need a B&O tax, but I certainly need the data to help me make up my mind. And if the data indicates that, I’ll follow the data every time.”

“I think it’s a great idea to bring somebody in to give us the outside look, give us an analysis, and to provide this council – and as we get into the next year – other council members the opportunity for some decision making,” said Councilman Claude DaCorsi.

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