The city of Kent will permanently cut, furlough or reduce 37 full-time positions to help offset a projected $15.7 million budget shortfall this year with the loss of tax revenue because of the COVID-19 pandemic.
Mayor Dana Ralph made the reductions Tuesday across all departments after she received and discussed proposed cuts from each department head. The mayor also froze five police officer positions the city had planned to fill this year.
“I just want to express how sad it is to say good-bye to members of our city family,” Ralph said during a virtual City Council workshop Tuesday about the budget. “It is never an easy conversation. …I’m so sorry to those that got that bad news today (Tuesday). There is no way around how hard that is for them and for us to deliver that. …It’s been a difficult exercise. There’s faces and families attached to every single one of those numbers.”
Eleven employees had positions eliminated. Twenty-three employees (mainly in Parks) were temporarily laid off or had hours reduced. Two others had jobs cut but were moved into vacant positions, according to city documents. Seven other vacant positions were cut.
The final day for the 11 employees cut from the payroll is July 1. They will receive one month of severance pay. The furlough and reduced-hour employees will be eligible for unemployment funds and could return to full-time pay by fall.
The department reductions in staff and other cuts, such as $450,000 by eliminating the Parks summer recreation program, will save the city $6.5 million this year.
About 80 percent of the city’s $111.5 million general fund budget in 2020 is for 734 employees.
In addition to the staff cuts, the city will use $5 million from its general fund reserves to help cover the loss of revenue from sales tax, business and occupation (B&O) tax, utility fees, permit fees and licenses.
The general fund reserves sit at $34 million and are expected to end the year at $31 million, City Finance Director Paula Painter told the council during its budget workshop. The transfer this year of $5 million to the general fund will still leave $26 million in the account.
“We have a rainy day fund for a reason and right now it’s pouring,” Ralph said. “If we did not have that fund balance and past councils had not set that level and current councils were not willing to stick to that, it would have devastated the city. Straight math, it’s like 100 employees.”
The council set a goal several years ago to keep the fund balance at 18 percent of the general fund budget.
“I know we are not out of the woods yet, but my God, it could have been so much worse,” Councilmember Les Thomas said about having the large reserve fund.
Ralph reduced the capital budget transfer fund from the general fund by $3.2 million.
“We expect fewer dollars coming into the general fund and therefore we’ll transfer fewer dollars from the general fund to capital projects funds,” City Chief Administrative Officer Derek Matheson said in a Wednesday email. “The loss of B&O revenue doesn’t affect current transportation and parks projects but we may have to wait longer to accumulate funds to build future projects.”
The mayor decided to use $1 million from the city’s Health and Wellness Fund to cover the final amount of the $15.7 million deficit.
“The Health and Wellness Fund pays for health insurance for city employees,” Matheson said. “The city and every employee pay premiums into it.”
Painter told the council that the fund has a $5.7 million balance.
“According to (city) policy, it’s only required to have a $2 million fund balance, leaving an excess of $3.7 million,” Painter said. “That has been pretty consistent for quite some time now so it seems like an appropriate use of fund balance because it in turn helps prevent reductions of other positions throughout the city.”
The city soon will receive $3.8 million in relief from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act funds, but those funds won’t be used to address the budget shortfall. Painter said there are limitations about how that money can be spent, and it cannot be used for revenue losses.
The mayor plans to spend $1 million of the funds on job training and small businesses with the remainder to cover the city’s COVID-19 expenses, Painter said.
With 41 percent of the general budget going to the police department and 18 percent to the parks department, the majority of the cost savings are in those two divisions.
Ralph said the city does not have a hiring freeze, but any new hire would be closely reviewed before approval.
Here’s a brief breakdown of the major cuts in each city department:
* Executive assistant to the mayor layoff (retiring), $122,000.
* Overtime cost reduction, $58,00
* Probation officer vacant, $50,000
Economic and Community Development
* Planner layoff
* Building inspector layoff
* Permit tech vacant
Position savings of $335,000
* B&O tax supervisor vacant, $155,000
* Central financial analyst vacant, $122,000
* Administrative assistant layoff, $85,000
* General operating expenditure reductions, $320,000
* Criminal paralegal layoff, $120,000
* Legal secretary layoff, $90,000
* Maintenance worker vacant
* Van driver vacant
* Parks program coordinator layoff (retiring)
* Parks program coordinator vacant
* Parks program assistant layoff
* Parks facility lead layoff
Position savings of $614,000
* Eliminate summer programs, $450,000
* 23 recreation staff furloughs, $280,000
* 175 unfilled part-time rec positions, $230,000
* Research and development coordinator layoff, $145,000
* Evidence supervisor layoff, $107,000
* Corrections sergeant vacant, $140,000
* Freeze 5 officers, 1 records specialist, 1 corrections officer, $880,000
* School zone traffic camera fund transfer to budget, $623,000 (from fund balance of $1.8 million)
* Engineer vacant, $165,000
* Public engagement coordinator layoff (salary not listed)