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Record of Proceedings

Tacoma City Council Study Session - November 8, 2024: Budget, Fire Impacts, and Amendments

City Council Study Session — Friday, November 8, 2024
BodyTacoma, Washington
SessionCity Council Study Session
DateFriday, November 8, 2024
StatusFILED
Video Record
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Transcript — Verbatim
0:02

I'd like to call to order the city council special study session of November 8th, 2024.

0:08

Clerk, will you please call the roll?

0:10

Councilmember Bushnell?

0:12

Present.

0:12

Councilmember Daniels.

0:13

Here.

0:14

Councilmember Diaz.

0:15

Here.

0:16

Deputy Mayor Hines.

0:17

Here.

0:17

Councilmember Rumba?

0:18

Here.

0:19

Councilmember Sidalgay?

0:20

Here.

0:20

Councilmember Scott?

0:22

Councilmember Walker?

0:23

Here.

0:24

Mayor Woodards.

0:25

Here.

0:25

Mayor and Council, your materials were sent at 9 52.

0:29

Thank you.

0:30

So our first agenda item today is the financial position update.

0:35

And I'm gonna call on City Manager Elizabeth Pauley to begin the presentation.

0:38

City Manager.

0:40

Thank you.

0:41

So Mayor and Council, we have a really brief presentation for you today.

0:46

Moach most of which is will be a little bit of redundancy for you in terms of recent budget presentations, but we really thought it was important to back up and share some context for where we are.

1:01

And then there's and there's a little bit of update in the presentation as well.

1:05

So our agenda today on the next slide is we're gonna talk a little bit about our financial position.

1:11

Then we are going to talk about the fire department impacts due to the status of the vote on proposition one and reject the rejection of that proposition.

1:22

Speaking, just again a little bit of reminder of what the that those levy dollars would have funded, and so what we are now going to have to work toward finding funding for, and also we'll hear directly from the chief on some operational considerations.

1:36

And then we're going to have time for the council to discuss budget amendments that individual council members are considering bringing forward.

1:44

So with that on the next slide, just a reminder that the budget that the council has is a balanced budget that was based on there not being levy funded funding.

1:56

So it's a no levy budget because at the time that the budget was due to the council, which was back on October 1st, we didn't have any levy authority.

2:06

So again, essentially for where we are today, this is a status quo budget.

2:12

We also just wanted to use this time to remind you a little bit about the fact that we did not fully correct for the structural deficit with the proposed budget while we made some progress with the reductions that we made to reduce the 24 million dollar gap.

2:28

Um we did use one time funds, as you see on the slide there on the right side in 2026, there's a planned use of almost 9 million dollars of cash.

2:37

On the right side of the slide, we're just reminding you of where that cash came from.

2:43

Um and so again, some of those sources we would not expect to see again, particularly the interest on the um ARPA ARPA dollars, and the um whether or not we'd have any positive um revenues in the biennium again.

2:57

We'll have to watch and wait and see.

2:59

Um then, and then we included the expense reductions that that were outlined in the in the general presentation of 3.75 million that were one time in nature.

3:09

So also just want to take a minute to remind you that the proposed budget also fully fully fills the three buckets of reserves that the council has pursuant to its reserve policy.

3:23

So there is a general fund reserve of 16.7 percent, and that is a 54.6 million dollar um reserve bucket.

3:34

There's five point there's a five percent reserve bucket that's called the emergency reserve and five point five percent excuse me for contingency reserve.

3:44

Just a little bit as a reminder.

3:46

Each of those um buckets has um just determined uses that the council agreed on in establishing its reserve policy, and each of those buckets has a different um voting requirement for access to those reserve funds, and those are would of course be one-time funds that once used, we would be working to refill those buckets back up to the reserve levels established by council.

4:12

On then on the next slide, we want to do a little bit of a of an update.

4:18

Just we're watching as we always do some of the economic conditions, and we are entering this um next biennium with a a bit of an economic uncertainty.

4:30

Um we have some risks in front of us that that we really don't have trends to follow for.

4:36

Um we have spoken to the council some uh about some of these risks, the legal and claims risk.

4:42

We're watching um trends both in total costs and number of claims that we have not seen in the past, and those also correspondingly have some insurance um related risks and concerns that go go with that category of risk.

5:04

And we have a bake a vacancy projection that is built into this budget that as we make reductions to this budget, we would have to again call C watch and perhaps pull that, make additional reductions to compensate for that vacancy projection.

5:21

What you're seeing on the lower the graph on the lower side of the left of the slide is what is happening with delinquencies on credit cards.

5:34

And so as you see there, we're seeing a dramatic increase in delinquencies, just as one indicator of kind of some of the economic certainty that we're that we're facing.

5:47

On the right side of the slide, you see job growth, and what you can probably barely see is that last little notch on the far right side of really a dramatic reduction there that we did not necessarily expect.

6:05

So we just call out these economic conditions and things that we follow to say that as we enter into these discussions, we need to have the context for both the our specific budget that is in front of us and some of the economic conditions that is context for the decision making.

6:24

On the next slide, we go a little bit closer to home with some watching what's happening in other U.S.

6:32

cities, and we just call out a few here, just to demonstrate that you know Tacoma isn't alone in its struggles, and cities across the U U.S.

6:40

have revenues that are growing slower than their expenditures, and again, that's the source of our structural gap.

6:47

On the list here that we've seen, including Seattle and San Francisco, which have seen massive growth in local economies and median incomes, still experiencing struggles with their budget.

Discussion Breakdown — Share of Meeting
Procedural█████████████████████████████████████████41%
Public Safety█████████████13%
Public Finance████████████12%
Budget Equity Analysis██████████10%
Economic Development████4%
Fire Department Operations███3%
Public Works███3%
Senior Services███3%
Mental Health Awareness██2%
Summary of Proceedings

Tacoma City Council Special Study Session - November 8, 2024

On November 8, 2024, the Tacoma City Council held a special study session to review the city's financial position, the impacts of the failed Proposition 1 fire levy, and proposed budget amendments from council members. The meeting centered on the structural deficit, the need to balance the 2025-2026 biennial budget without new levy revenue, and the difficult trade-offs between public safety and community investments. No votes were taken; the council will continue discussions before final adoption.

Financial Position Update

  • City Manager Elizabeth Pauley presented the proposed $641 million general fund budget, which is balanced without levy funding. The budget does not fully correct the structural deficit: it uses $8.9 million in one-time cash from ARPA earnings, positive revenue surprises, and one-time expense reductions. In 2026, $9 million in cash is planned from non-recurring sources.
  • Reserves are fully funded per council policy: general fund reserve at 16.7% ($54.6M), emergency reserve at 5% ($16.3M), and contingency reserve at 5% ($16.3M). Access requires supermajority or majority votes depending on the bucket.
  • Economic risks include rising credit card delinquencies, slowing job growth, legal/claims costs, and unfunded needs: police overtime gap ($3-5M), fleet replacement gaps ($1.2M police, $1M public works), temporary shelter funding only through June 2025 (additional $12M for 12 months), and deferred facility maintenance.
  • Mayor Woodards emphasized that reductions in the general fund directly impact priority areas, as 60% of the fund is personnel plus indirect service costs and transfers.

Fire Department Impacts Due to Proposition 1 Rejection

  • Interim Fire Chief Siana Stallings reported that to meet a $4 million general fund reduction target, the department will eliminate 16 rover positions instead of permanently closing an engine company. This avoids a 365-day service reduction but may lead to planned, temporary brown-outs if overtime cannot be managed.
  • The department faces a structural staffing gap because employee unplanned leave (sick, FMLA, PFML) has increased from 10% to 30% of time, requiring additional coverage. The rover program was introduced to cover vacancies without overtime, but the budget now relies on alternative staffing strategies to stay within overtime limits.
  • Chief Stallings stated service levels will be maintained as much as possible, but if strategies fail, she may return at mid-biennium to propose permanent service reductions. City Manager Pauley noted the department successfully managed without rovers before 2024 (using overtime), and the goal is to keep overtime within budget.
  • Councilmember Walker and others expressed disappointment the levy failed and stressed the need to support firefighter wellness. Councilmember Scott asked about risks to firefighters from increased overtime; Chief confirmed mandatory overtime occurred last year (60 people/month) but has declined to 10/month as new classes graduate.
  • Councilmember Daniels asked about legal liability for slower response; City Attorney clarified that while there is no absolute standard, claims for failure to respond are possible and costly.

Council Budget Amendments for Consideration

Councilmembers shared amendments they are considering. Staff tallied total General Fund requests at approximately $5.6 million (plus $1.5 million in vacancy reductions already baked in), which could require eliminating 10+ positions per $2 million in cuts. The following amendments were presented:

Councilmember Walker (4 + 1 tentative)

  • Transfer $1 million from Public Works grant match to specific Vision Zero projects (traffic safety).
  • Shift $36,000 from the unfit/unsafe sidewalks fund to complete the Foss Esplanade connection at the Foss Waterway Seaport Museum (accessibility).
  • Add $86,000 for Summer Late Nights youth program (restoring to 2024 level) and seek sustainable funding via Tacoma Creates for 2026.
  • Contribute $50,000 to the Grand Cinema's capital campaign (Merlino Arts Center).
  • Tentatively seek $18,000 to restore OASIS Youth Center funding to originally allocated level (not including carryover).

Councilmember Scott (4 amendments)

  • $50,000 one-time capital for Rebuilding Hope Sexual Assault Center (new Hilltop facility).
  • $200,000 one-time capital for Metropolitan Development Council (North Detox facility repairs).
  • $85,000 for biennial support of Downtown Tacoma Partnership retail advocate position (1/3 of cost).
  • $25,000 for murals/anti-graffiti through Tidy Tacoma.

Councilmember Rumbaugh (2 amendments)

  • $47,500 for commercial pump-out station at Foss Waterway Seaport Museum (final funding gap).
  • Expressed support for Downtown retail advocate position (shared with Councilmember Scott).
  • Also supported OASIS and Rebuilding Hope.

Councilmember Daniels (1 new program)

  • Business Safety and Resilience Program: $230,000 in 2025 and $460,000 in 2026 (scalable) funded by repurposing $300,000 from CED loan program (UDAG) and $390,000 in new General Fund. Program would invest in business districts (trash cans, lighting, ADA ramps, etc.). Councilmember Daniels expressed willingness to negotiate amounts.

Councilmember Sidalgay (2 amendments)

  • Add McKinley Hill design study to Capital Facilities Program (no budget impact but eligibility for grants).
  • Extend Lighthouse Senior Center operations for 90 days at $91,000 to ease transition to Metro Parks (April 1, 2025).

Deputy Mayor Hines (1 amendment)

  • Backfill $4.2 million for fire department rover positions to avoid service reductions, funded through a combination of General Fund transfers and other programmatic reductions. He argued the levy failure does not negate the need for fire services.

Councilmember Bushnell - Proposed examining the council's own budget (including CCR funds) for potential cuts.

Councilmember Diaz - Expressed concern about funding new requests given the deficit and suggested seeking state/county funds for some projects. She asked staff to show current city funding for each organization and the impact of any cuts.

Key Outcomes

  • The council gained a clear understanding of the $5.6-7.1 million in potential General Fund amendments and the trade-off of approximately 10+ positions per $2 million.
  • No decisions were made; councilmembers will refine their proposals, seek alternative funding sources (e.g., state, county, other city funds), and discuss trade-offs before the final budget vote.
  • Staff will provide a matrix of proposed amendments with funding sources, current city funding, and potential offsets.
  • Further discussion on the council's own budget and CCR policy will occur at a future GPFC meeting or council retreat.
  • A follow-up work session to narrow amendments and identify reductions is expected before the budget adoption deadline.

Note: The meeting included an executive session (not transcribed) to review a public employee's performance, but no action was reported.

Meeting Transcript

I'd like to call to order the city council special study session of November 8th, 2024. Clerk, will you please call the roll? Councilmember Bushnell? Present. Councilmember Daniels. Here. Councilmember Diaz. Here. Deputy Mayor Hines. Here. Councilmember Rumba? Here. Councilmember Sidalgay? Here. Councilmember Scott? Councilmember Walker? Here. Mayor Woodards. Here. Mayor and Council, your materials were sent at 9 52. Thank you. So our first agenda item today is the financial position update. And I'm gonna call on City Manager Elizabeth Pauley to begin the presentation. City Manager. Thank you. So Mayor and Council, we have a really brief presentation for you today. Moach most of which is will be a little bit of redundancy for you in terms of recent budget presentations, but we really thought it was important to back up and share some context for where we are. And then there's and there's a little bit of update in the presentation as well. So our agenda today on the next slide is we're gonna talk a little bit about our financial position. Then we are going to talk about the fire department impacts due to the status of the vote on proposition one and reject the rejection of that proposition. Speaking, just again a little bit of reminder of what the that those levy dollars would have funded, and so what we are now going to have to work toward finding funding for, and also we'll hear directly from the chief on some operational considerations. And then we're going to have time for the council to discuss budget amendments that individual council members are considering bringing forward. So with that on the next slide, just a reminder that the budget that the council has is a balanced budget that was based on there not being levy funded funding. So it's a no levy budget because at the time that the budget was due to the council, which was back on October 1st, we didn't have any levy authority. So again, essentially for where we are today, this is a status quo budget. We also just wanted to use this time to remind you a little bit about the fact that we did not fully correct for the structural deficit with the proposed budget while we made some progress with the reductions that we made to reduce the 24 million dollar gap. Um we did use one time funds, as you see on the slide there on the right side in 2026, there's a planned use of almost 9 million dollars of cash. On the right side of the slide, we're just reminding you of where that cash came from. Um and so again, some of those sources we would not expect to see again, particularly the interest on the um ARPA ARPA dollars, and the um whether or not we'd have any positive um revenues in the biennium again. We'll have to watch and wait and see. Um then, and then we included the expense reductions that that were outlined in the in the general presentation of 3.75 million that were one time in nature. So also just want to take a minute to remind you that the proposed budget also fully fully fills the three buckets of reserves that the council has pursuant to its reserve policy. So there is a general fund reserve of 16.7 percent, and that is a 54.6 million dollar um reserve bucket. There's five point there's a five percent reserve bucket that's called the emergency reserve and five point five percent excuse me for contingency reserve. Just a little bit as a reminder. Each of those um buckets has um just determined uses that the council agreed on in establishing its reserve policy, and each of those buckets has a different um voting requirement for access to those reserve funds, and those are would of course be one-time funds that once used, we would be working to refill those buckets back up to the reserve levels established by council. On then on the next slide, we want to do a little bit of a of an update. Just we're watching as we always do some of the economic conditions, and we are entering this um next biennium with a a bit of an economic uncertainty. Um we have some risks in front of us that that we really don't have trends to follow for. Um we have spoken to the council some uh about some of these risks, the legal and claims risk.

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