BI having to deal with ‘tight’ budget

Unlike many on affluent Bainbridge Island, the city is on a tight budget.

“No one in the crowd likes this budget,” city manager Blair King told the City Council at its meeting Sept. 17. “It’s been through the gauntlet” with staff.

BI Mayor Joe Deets added: “It’s a very tight budget. It makes me nervous.”

That is because the budget over two years has just $146,000 in surplus. That doesn’t give the council much wiggle room when requests are made by council, staff or residents who want their favorite projects funded.

Deets said all councilmembers are going to have to “hold the line” on requests, which will take a lot of discipline. “We can’t be everything to everybody,” he said. “There’s so much I’d like to do. But we have to be realistic.”

Councilmember Kirsten Hytopoulos also said the budget was tight, but she was referring to the process. In years past councilmembers would get the draft budget in advance of the meeting, and they would be able to discuss it at a few other meetings. This year they will look it over and discuss it after a public hearing Oct. 8.“I’ve never seen anything like that happen,” she said. “I’m concerned we’re trying to squeeze it in there.”

Councilmember Brenda Fantroy-Johnson agreed. “I wish we had more time. It’s weird to get it after the presentation. Normally we get a chance to look at it.”

Deputy mayor Ashley Mathews said there are things that could be done so that we could “tighten our belt a little less.” But she said locals don’t want tourism and hotels and that’s the kind of thing that drives revenue.

Budget questions

Some councilmembers had first-impression questions about the budget.

Fantroy-Johnson asked if it would save money to expand the city court system rather than contract with Kitsap County.

King answered it would be “impractical” for the city to have its own prosecutor, public defender and jail.

Training was one thing cut in the budget, so Mathews and Fantroy-Johnson both asked about equity training.

“Equity factors into everything we do,” police chief Joe Clark said, adding it was part of state-mandated training the department had last year.

Councilmember Leslie Schneider talked about transportation funding. She said the Capital Improvement Plan includes many important projects, but there’s “quite a bit hanging out there” regarding other Sustainable Transporation Plan projects. She said she’s excited about the Madison Avenue project, saying it will be a “real showcase” to show residents what can be done.

To balance the budget, some city positions that had already been approved will not be filled. Councilmember Clarence Moriwaki said he wants to be sensitive to that because that means current employees will be expected to pick up the slack.

Councilmember Jon Quitslund said with so many changes coming in city code he doesn’t know how it all will get done.

Hytopoulos noted that a lot more is being spent in 2025 than in 2026 so she’s wondering if more could be done in the second year of the budget.

“We’re still not spending enough on roads,” for example, she said. She also said she’s concerned about reducing seasonal workers because how will that work be done? She’s also concerned about cuts to communications with the public.

Hytopoulos added that when people come to council and ask for funding for projects they are always told, “Wait for the budget.” But now that’s happening, and council is told there is no room for tradeoffs. The public will want to know “why we don’t fund the things that matter to them.”

King said he knows there will be requests for more spending, and those decisions will be up to the council. He added they could decide to use money from the reserve, the sales tax, the car tab tax, or cut in some areas and add to other areas. “You’re the policy setters and you have to answer to the voters,” he said.

King’s overview

In introducing the topic, King asked the council to focus on the presentation, review it, then bring back comments and desired changes Oct. 8 so a final version will be ready by Nov. 12 at the second public hearing. City Council must adopt a budget by Dec. 31.

He emphasized it’s a balanced budget, and if they “stayed on autopilot” without making adjustments the city would have been in a financial hole. “It’s a budget we can live with right now.” It’s a tight budget “balanced on the head of a pin.”

King said revenue challenges include the city losing $1 million in interest earnings last year. BI doesn’t expect to earn as much in investments, with returns expected to drop from 5.5% to 3%. Inflation is another factor, as are interest rates, which are expected to rise.

On the spending side, personnel costs are going up. He specifically mentioned the police contract. Insurance costs are up. Sewer, water and stormwater are expected to pay for themselves so another rate hike is possible.

No layoffs are planned for the 141 full-time employees, and there will be no new employees. 3.5 positions that had been approved will not be filled.

He added the budget addresses the council’s priorities and objectives, including: climate action, affordable housing, city website, sustainable transportation, the Comprehensive Plan, groundwater management, the permit backlog, the Winslow Subarea Plan, equity lens and road maintenance.

The city plans to replace four police vehicles. It is looking to spend $2 million on an affordable housing project and $100,000 updating the city website. A part-time, temporary worker will work on the permit backlog.

Each department is facing cuts proportionate to the overall budget totalling $2.77 million: Public safety $1.1 million; executive $720,000; Public Works $647,000; and finance $200,000.

“Cuts were hard. No one wanted to cut anything,” King said. “Staff will feel the cuts, but not the public.”

King asked that cut items be returned before the council thinks of adding new spending.

Department specifics

Each department head talked briefly about specifics in their budgets.

The executive’s office has a budget of $7 million with half of that for the 23 positions in personnel.

The police department has $6.7 million the first year and $7 million the second. About 85% of its budget is for its 31 employees, 25 of whom are law enforcement. It is looking at technology such as electronic chalk equipment to expedite parking enforcement, and cameras to keep folks from cutting in the ferry line and to help with speed enforcement.

Finance has a real budget of $1.6 million of which 95% is for the 10 employees.

Capital Improvement Projects

Public Works director Chris Wierzbicki talked briefly about some of the capital improvemenst for the next six years.

He said by the end of the period the south to north nonmotorized connection from Lynwood Center to Bucklin Hill to High School Road could be done.

Trailers that are up to 30-years old and security will be improved at Public Works. It is also buying an asphalt roller so it can do street repairs in-house, including asphalt patching.

A crane is in place now to work on the water tank in Winslow near the high school. It could be online by this time next year, he said. Wastewater treatment plant work is also expected. He said there could be some extra funds from stormwater, and those would go to fixing fish culverts.

Budget basics

A city news release says General Fund revenues are forecasted to be almost $47.5 million with expenses at about $47.33 million. For 2025, General Fund revenue is projected at almost $23.6 million and for 2026 at almost $23.9 million. Total budgeted spending is almost $23.26 million for 2025 and about $24.1 million for 2026. The budget including transfers of $144.3 million, which is about 1.5% less than the previous budget. The city’s General Fund relies heavily on property, sales, and utility taxes, which account for 84% of its revenue.

Reserves are untouched and will have $7.46 million restricted and $9.76 million unrestricted by the end of 2026. Spending for all funds, including transfers, is almost $85 million in 2025, dropping to $59.355 million in 2026. General Fund reserves are set at 25% of operating revenues, plus an additional $1 million as a cushion. That approach ensures the city can continue to provide essential services even in times of financial uncertainty, the release says.

Personnel costs, representing a significant portion of city expenditures, are expected to increase by 6% in both 2025 and 2026. Budget reductions have been made for professional services, communications, supplies, equipment, recruitment and trainings. The budget allocates $3.6 million over the biennium to address road maintenance on the island’s 282 lane miles.

Sustainable transportation initiatives are supported with design work on the Sound to Olympics Trail and nonmotorized improvements along Eagle Harbor/Wyatt Way commencing construction in 2025, and Bucklin Hill and Lynwood Center Roads slated to begin in 2026. Funds for the Climate and Sustainability manager are in the budget, along with money to support the transition to an electric fleet and installation of charging stations at City Hall, the Public Works Maintenance Facility and the Ted Spearman Justice Center.