Spokane has a budget for the year ahead with new funds for dozens of new positions for police and fire, all while hopefully spending less than the city expects to collect.

City leaders faced a number of challenges to get past the finish line with this year’s budget, including concerns about soaring overtime costs for police and fire, unusually large jumps in compensation for city employees negotiated for by their unions, and overall economic uncertainty.

The nearly $1.2 billion budget was approved unanimously by the City Council on Dec. 12, a month after Mayor Nadine Woodward unveiled her own proposed 2023 city budget.

Members of the council raised concerns that the mayor’s proposal would have dipped into the city’s dwindling unassigned reserves, the portion of its savings not set aside for a particular purpose.

If passed, the proposal would have drawn down $2.6 million of those savings – at least. City Council Budget Manager Matt Boston pointed to unfunded firefighting equipment like vehicles and the mayor’s proposed use of a portion of local sales taxes on homeless services instead of affordable housing, arguing that there was more like a $15 million hole in the budget.

Even at $2.6 million, continuing to draw down from a shrinking savings account could put the city’s long-term financial sustainability into question, Boston said.

The Council-approved budget ended up leaving out the fire equipment with the expectation of coming up with a long-term plan next year to fund capital improvements.

The budget did, however, move a portion of sales taxes back into affordable housing, instead paying for current homelessness services in part with some of the last of the city’s American Rescue Plan Act funds. Further funding was allocated from the city police department, specifically from open positions that the department has been unable to fill.

Through this and a number of smaller adjustments, the city’s budget now adds $200,000 to the savings account by the end of 2023, rather than draw $2.6 million.

Bridging the gapThe Council budget made a number of other small cuts and adjustments from the mayor’s proposal in order to close that $2.8 million gap.

Woodward had wanted to waive the property tax hike that Washington cities can approve each year; the Council voted to approve it anyway, adding roughly $650,000 to the 2023 budget. Woodward had vetoed that tax increase, citing concerns about the economy, but the Council overrode that veto.

The Council declined to fund a chief of staff position included in Woodward’s budget proposal, which would have given Director of Communications and Marketing Brian Coddington a promotion and a nearly $60,000 raise.

Unlike the city administrator, who oversees the operations of every department in the city, the chief of staff position specifically directs the Office of the Mayor. Coddington has already been performing those duties, but for a second time the Council rejected a request to formalize the role, Woodward told The Spokesman-Review.

“(Brian) has been doing basically two positions for a very, very long time, and that’s not sustainable,” Woodward said.

Though the mayor’s office didn’t receive the reclassification it requested, the Council approved one of its own, reclassifying the position Boston holds from budget manager to budget director, which carries with it a nearly $17,000 raise.

The Council did make some cuts to its own budget as well, primarily slashing travel budgets.

Despite the disagreements, Coddington noted that they took place at the margins of the city’s $1.2 billion budget.

He added that the debates were largely over how to fund services and not whether to fund them, as was the case with services for the homeless.

New hires, more overtime for police and fireBoth the mayor’s office and the City Council were quick to highlight their investments in public safety.

The city’s budget includes salaries for 30 new hires in the Spokane Fire Department, as well as nine dedicated uniformed positions in the Spokane Police Department.

Overtime allowances for both departments were also doubled in the 2023 budget.

Coupled with new positions, the hope is that the city’s fire and police departments will stop accruing unbudgeted overtime.

“Going forward, there should be no requests for additional overtime funding in 2023,” said Councilwoman Lori Kinnear during the Dec. 12 meeting. “We’ve been assured these changes will mitigate the overtime problem that has burdened the budget for years.”

In 2022, the police department was budgeted around $2.8 million in overtime, but the department is expected to rack up an additional $2.5 million in overtime costs by the end of the year. The department blamed staffing vacancies, increased major crime events, and insufficient overtime reimbursement from special city events, according to Spokane Budget Analyst Jessica Stratton.

The fire department was expected to have $3.7 million in unbudgeted overtime this year, which officials blamed on staffing shortages related to the pandemic, including the loss of firefighters from vaccination mandates, Stratton said.

The city approved using more than $6 million from the city’s ARPA funds, which have largely been used up, to pay for this unbudgeted overtime.

“I’m going to be a stickler about this,” Kinnear said during the Dec. 12 meeting. “You think I was a Grinch last year about overtime? If we go over it this time, you’ll hear me yelling all the way to California.”

Looking to the futureThis year’s budget debate was made particularly challenging by a number of factors.

Lingering effects from the pandemic, salary increases won by local unions that were larger than normal, and the uncertain threat of a recession on the horizon all made planning for the future more difficult.

When the budget fails to account for uncertainty, the Council must pass special budget ordinances – spot fixes that adjust the budget to allow for unexpected costs, typically out of unassigned reserves.

“Most of (the city Finance Department) will agree, over the last few years, there have been more special budget ordinances than they’ve ever seen,” Boston said. “There are some extenuating circumstances, but we’re not in a position to deplete these unassigned reserves.”

Now that the work of balancing the 2023 budget is done, the Council has already begun contemplating how to keep a tighter handle on city finances going forward.

Councilman Michael Cathcart, who voted in favor of the city’s annual budget for the first time since being elected, outlined three changes to keep the budget under control.

First, the city has to prioritize adding to its savings.

An ordinance passed Dec. 12 commits the city to have savings, including unassigned and other reserves, equal to 25% of the general fund budget. Whenever those savings dip below 25%, the city must replenish it by at least 2% each year.

Second, rather than make constant adjustments to the budget through special ordinances, Cathcart recommended the Council starting using a supplemental budget system.

This supplemental budget would be a chance for a midyear review of the city’s finances, making adjustments as needed all at once.

“There are a lot of things we’ll have to fine tune to reduce risk next year,” Cathcart said.

Finally, although the city operates on annual budgets, it should start projecting out another year ahead, he added.

“This way you’re sure your numbers match and you don’t put yourself in an unsustainable situation the next year,” Cathcart said. “I would rather make the good and hard decisions today to protect us from tomorrow.”