By a 4-3 vote, the SeaTac City Council passed Dec. 14 a $28.8 million general operating budget for 2011 that includes staff layoffs.
Expenditures are estimated to exceed revenue in the general fund by $14,701. That leaves a general fund balance of $7.5 million, which meets the council goal of having three months of operating expenses in reserves.
For all funds, expenditures are set at $52 million with expected revenue of $49.3 million. The 2011 year-end fund balance is estimated at $46.3 million, down from $49 million on Jan. 1, 2011.
In a statement that came with the budget proposal, interim city manager Todd Cutts said the budget "was developed in the challenging climate of balancing ever increasing costs with slow or declining revenue sources.
"While it's very painful to lay off quality workers, especially when jobs are so scarce, we're very thankful that we will be able to preserve most positions in this budget due to the efforts made by departments to reduce expenditures over the past two years."
Finance director Mike McCarty said the city is experiencing decreased revenues from declining travel at Sea-Tac Airport. That impacts sales, parking and lodging taxes. Collection of real estate excise tax is also down because of continued slowing of property sales. Property tax revenues that make up 41 percent of the city's general fund and sales tax, which is 30 percent of the general fund, have also been slow to recover, according to McCarty.
The city will transfer $920,000 out of the Port of Seattle construction sales tax, previously designated for capitol funds, into the general fund.
SeaTac will also cut about $360,000 in general fund non-personnel expenses from this year's budget levels.
Six full-time positions that are currently occupied plus two full-time and three part-time positions that are vacant will not be filled, resulting in a savings of $1 million.
The staff reductions will mean the SeaTac Community Center will close one hour earlier four days a week and lifeguard hours will be reduced at Angle Lake Park this summer.
Union employees will receive a 2 percent Cost of Living Adjustment (COLA) raise but non-union employees will not. Instead, they will be given five additional leave days.
The ongoing 4-3 split in the council was reflected in the sometimes-rancorous debate on budget adoption.
Councilman Tony Anderson labeled a move to reduce the proposed property tax levy a "goofy little political ploy.
"It doesn't take courage when you know it won't pass," Tony Anderson declared.
He noted the council had held five long budget workshops.
"It was hard work to get down to this," he said. "I don't believe in a charred earth budget policy."
Later, during council comments, Councilwoman Pam Fernald remarked that her first year on the council had been a "hoot.
"But it's getting old to be called politically motivated when I am voting my conscience," Fernald added.
Anderson apologized for the remark but said he was frustrated because he "suffered through five workshops and then the target was moved."
Deputy Mayor Gene Fisher said he would vote against the budget because the city is spending more than it is taking in. He has voted against the budget in all but one year since joining the council 10 years ago.
"This budget is no different than all the others," Fisher said. "It is very agonizing to have layoffs but if the budgets had been balanced before we wouldn't be having layoffs."
Noting SeaTac receives almost $1 million in construction sales tax from the airport and $4 million in airport parking tax, Fisher said, "the city is so lucky to have a cash cow in the middle of the city."
Councilman Ralph Shape proposed an amendment to the budget to allocate $5,000 to the Northwest Symphony Orchestra from the hotel/motel fund. He noted the budget includes $30,000 from the fund for a sports complex feasibility study.
The amendment passed with Mayor Terry Anderson, Councilwoman Mia Gregerson, Tony Anderson, Fisher and Shape voting for it. Councilman Rick Forschler and Fernald voted against.
Fisher joined Forschler and Fernald in voting against final budget approval.
Lawmakers also voted to set the city's property tax levy rate at $2.80 per $1,000 of assessed value.
McCarty said a property owner whose home was assessed at $250,000 in 2010 will pay about $9 more per year in SeaTac property taxes in 2011.
Forschler proposed the levy rate be set at $2.58-the 2010 rate.
The vote split along the same lines as the final budget vote.
As expected, council members approved a contract to receive fire administration and other fire services from the Kent Regional Fire Authority.
SeaTac will contract with Kent for administration including a fire chief, emergency management, fire prevention, public education, fire investigations and firefighter training. The contract will save SeaTac about $100,000.
In a press release, acting SeaTac fire chief Brian Wiwel said, "I will be the assistant fire chief for the city working with the exact same team of firefighters as before."
Saying he needed more information, Forschler voted against the agreement.
SeaTac is also studying merging with the Kent fire department.
Kent Fire Chief Jim Schneider told lawmakers Tukwila is also studying a merger. But he said the Tukwila exploratory study will not begin until March or April. That is after SeaTac's study is completed, he said.