The Mercer Island City Council discussed ways to bridge a $1.27 million budget gap in 2018 at its June 11 mini planning session, with options ranging from cutting 17 city employees to increasing the average resident’s tax bill by $233 per year.

Finance Director Chip Corder noted that “the good news is that the projected deficits in 2017 and 2018 are less than what was projected back in January 2016, which was ‐$0.71 million and ‐$1.31 million respectively, [but] the bad news is that they are still significant,” in the June 11, 2017-2018 Budget Kick-Off agenda bill.

City staff proposed a “temporary fix,” using one‐time General Fund surpluses in 2015 and 2016 to bridge the $757,000 total projected deficit in 2017 in the General Fund and Youth and Family Services (YFS) Fund, and then using the 2017‐2018 budget process to make the public aware of the coming deficits, other funding needs and the options for addressing both.

Ultimately, the council will need to identify service level cuts and/or new revenue sources to balance the second year of the biennium when it adopts the 2017‐2018 Budget on Dec. 5.

The council decided to form two subcommittees to begin a public conversation about the deficits. Councilmembers Dan Grausz, Wendy Weiker and Benson Wong will work on the capital projects side, while Deputy Mayor Debbie Bertlin and Councilmembers Dave Wisenteiner and Jeff Sanderson will assist with the school counselor funding levy.

At the root of the revenue growth problem is property tax, which makes up 42 percent of total budgeted revenues in 2016. On the expenditure side, personnel costs (salaries, wages and benefits) make up 73 percent of total budgeted expenditures in 2016, Corder said.

If the council takes a levy lid lift request to voters, it could address not only the deficits in the General Fund and YFS Fund, but also could add funds in needed areas like help desk tech, fire apparatus replacement and even parks and facilities projects. The levy lid lift would cost the average taxpayer $71, $166, $194 or $233 in 2018, depending on which option the council chooses and how many needs it places in the request.

If no new revenue sources are tapped, the city will have to increase the utility tax and water rates and cut 14 to 17 full-time emloyees in 2018.

Opportunities to cut staff are slim. Mercer Island’s departments are already leanly staffed, Corder said, a finding that was recently confirmed in a maintenance and fleet audit that was also presented to the council at its June 11 meeting.

“If Mercer Island wants a lean operation with decision-making accomplished at the lowest possible level then that is pretty much what is occurring,” according to the audit, conducted by John Ostrowski. “Some activities shouldn’t be lean. Public health is a serious responsibility and requires a certain amount of redundancy to ensure safe drinking water and pollution-free sewerage systems.”

In addition, the council recently added a full-time employee, funding a new planning position to help with long-range projects. The city also added a paralegal position that will eventually be dedicated to public records requests, which have been “voluminous” over the past two years.

The council also discussed electronic devices, fireworks discharge and sales permit approval and council/staff operations and communications at its mini planning session. See http://sirepub.mercergov.org/meetings/mtgviewer.aspx?meetid=240&doctype=AGENDA for more.