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2011 - 2012 Budget Presentation

October 18, 2010

Good evening Council,

I appreciate the time this evening to present to you my proposed budget for 2011-2012. As required by law, this budget is balanced and represents our ongoing effort to maintain quality city services for our citizens at a time when operating revenues continue to decline.

Our country is continuing to struggle through the worst economic recession in history, even though we’re told the recession is officially over. While it’s encouraging to see some slight improvement in the economy, high unemployment, housing foreclosures and an extremely tight lending market are providing little relief to our businesses or residents. And we should all be convinced by now that this recovery will take a long, long time.

The trickle down affect of this poor economy on government services is very evident. Nearly every day, we read headlines about continued layoffs in government jobs.

Washington State has an immediate crisis due to a $520 million dollar gap for the remainder of this year and a $4.6 billion dollar hole for the upcoming biennium. Seattle indicates that 200 employees face lay-offs. And King County has a $63 million dollar budget gap and is threatening hundreds of layoffs including sheriff’s deputies.

Cities are also facing tough times. Lynnwood is struggling with a $20 million dollar deficit that is threatening 80 positions. Preliminary budget discussions in Federal Way indicate plans to eliminate nearly 40 positions including 18 police officers, and Redmond is anticipating a decrease of nearly 28 positions on top of the 22 that were eliminated in 2009. Tukwila is dealing with a $4 million dollar shortfall and is considering eliminating one of their fire engines as part of anticipated staff reductions. Even Mercer Island is eliminating 8.5 positions and Bellevue is reporting an $11 million deficit with plans to reduce staff by 85 positions, which includes 25 additional layoffs. This scenario is playing out throughout our state, including here at home.

As part of our efforts to balance our upcoming budget, we, too, are forced to propose eliminating equivalent to four and a half full-time positions. And 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 during the next two years thanks to the difficult financial decisions we made over the past two years.

At a time when we’ve been making significant cuts in staffing and other operating costs, we have also concentrated our efforts on identifying new ways of doing business. We are committed to continue providing quality levels of service to our residents and business community through increased efficiency and productivity. We have also engaged our employees to help evaluate and prioritize city services that we feel are vital to our citizens.

I want to point out two new elements to this budget. As you know, this is the first biennial budget for our city. Planning for two years saves a tremendous amount of staff time and resources and also allows us to do a better job of planning for the near future.

Secondly, as part of this budget process, we felt it was important to solicit input from our citizens and business owners to make certain that our values and priorities align with those of our community. We formed a Community Budget Advisory Group comprised of local residents, business owners, and community leaders to meet over a period of several weeks with city department heads and our finance department. It was literally a crash course on how city government operates and how decisions are made during our budget process. In addition to soliciting their suggestions on opportunities for greater efficiencies and cost savings, we asked them to be prepared to answer some specific questions:

  • Do the core services provided by the city meet the community’s priorities?
  • As a customer of city services, which of the services we provide do you view as most and least important?
  • Is the city pursuing the “right” results for the Renton community?

The advisory group provided us with a number of valuable recommendations, some of which have been included in this budget and others that will be part of our ongoing planning for future years. You were provided with a copy of their report.

We sincerely appreciate the time this group provided us in this process.

The next two years promise to be challenging.

Though we saw some signs of recovery toward the end of 2009 and a promising start in early 2010, the recovery slowed to a crawl during the second quarter of this year.

Growth projections have been repeatedly scaled back.  Job growth was insufficient to reduce the unemployment rate.  Housing starts and permits reversed their upward trends.

Our revenues continue to be lower than anticipated.  Sales tax revenues through September are nearly $1 million dollars below what we budgeted this year.

The total proposed two-year budget for 2011 and 2012 is $445 million, of which $198 million is the General Government fund that is used for police, fire and emergency services, parks, street repair, and other basics required to run a city.

In preparing this budget, our preliminary projections indicated that maintaining current levels of services in General Government Operations would result in a deficit of $2 million in this budget period. We have made the necessary adjustments to bring our expenditures in line with our revenue projections through the next biennium.

It’s important to note that this budget proposal does not restore any of the service reductions made during 2010. An example would be the summer recreation programs that we used to provide in our neighborhood parks.  It also does not include funding for major maintenance projects and other capital needs.

I want to emphasize that some of these cuts and reductions cannot be sustained in the long run. We need to maintain our parks and invest in our infrastructure or we will pay an even bigger price in the future.

In the current budget year, every department made difficult choices, reducing or reorganizing services while minimizing adverse impacts to our citizens.
Last year we successfully launched an ambitious initiative of zero-based budgeting based on priorities and measurable outcomes aimed at right-sizing city government, and for this year’s budget we built on that foundation.

Balancing our budget – proposed reductions

As I mentioned earlier, we are forced to eliminate several positions in order to balance this budget. These are hard decisions to make since we value each one of our employees and cannot say enough about the contributions they make every day to the public they serve. We also made additional cost reductions to reduce our overall expenditures.

Our primary responsibility remains in public safety. This includes our Police department and Fire and Emergency Services. The services provided by these two departments will continue to be our top priority. However, both departments, along with all of the other departments, are reducing expenses in overtime and in other areas. We will continue to look at new ways of deploying our resources to meet our objectives of providing a safe community for our citizens and businesses.

As the Community Budget Advisors noted, we need to have well maintained streets, focus on infrastructure and transportation, and maintain basic utility services. We plan to implement some of the recommendations of the advisory group including reducing some administrative support functions.

Focusing on our priorities and delivering results

The budget includes the full funding of our portion of the startup cost for the new 800 bed jail that we’re building along with six other south county cities. It also provides nearly $20 million over a ten-year period for the development of new library facilities that the Council committed to do when we annexed to the King County Library System earlier this year. 

Our city remains in solid financial shape despite this recession. We’re focusing on improving efficiency while operating within our means. While I’m confident that the economy will improve,  I do not believe we will see the type of growth that this region experienced over the past 15 years that, frankly, paid for a significant portion of city services. Things are not going to be they way they used to be.

We will continue efforts to evaluate the way we do business.  We will continue to right-size the structure of government. 

We will continue to engage our employees to help find innovative and effective ways of serving our citizens.

We will continue to practice fiscal responsibility and reduce our debt.

And we will continue to work with our labor groups to find sustainable ways of managing our labor costs in order for us to continue to provide quality services to our citizens with fewer dollars.

For the past two years, I have had to focus this budget message on steps we were taking to deal with significant revenue shortages. But there is some good news that I would like to share with you.

Despite the fact that we have reduced our workforce by 12% over the past two years, we have continued to focus on providing quality service for our residents.

As promised, we have taken proactive steps to reduce crime in our city.  The Renton Police Department has created a Special Operations Division where officers focus their attention on career criminals — targeting those individuals who are personally responsible for many crimes. Our officers have been successful at building strong cases against these individuals that will assure longer prison terms. As an example, this division identified a group of 18 individuals who were responsible for many burglaries, thefts, vehicle prowls, and identity theft.  Along with detectives and patrol officers, they devised a plan and pursued them for three weeks and were able to arrest 13 suspects and serve seven search warrants.

Our police officers also identified a known career criminal who was active in committing residential burglaries.  A plan was developed to catch him in the act and after two days of intense surveillance, the suspect was observed committing three burglaries in Renton and Newcastle and then pawning the stolen items.  The suspect was arrested and the stolen items were retrieved and returned to their owners. Due to the extra effort, this individual has been charged with multiple felony offenses.

We improved safety in our parks. In light of the tragic death of a senior citizen who was walking along the Cedar River Trail, we took steps to enhance safety on all our trails with new rules, trail striping, and additional signage. And our police cadets were on the trails this summer to distribute safety and trail etiquette information.

To deal with repeat offenders in our parks, the council enacted a new ordinance that addresses drug and alcohol users and individuals violating other city laws. Utilizing this ordinance, our police officers have expelled 20 offenders from all city parks. Previously, these individuals would go from one park to another and engage in all kinds of criminal activity. We’re now drafting a similar ordinance for the Transit Center.

Thanks to our successful efforts in Washington DC to lobby for funds to repair the Howard Hanson Dam, the US Army Corps of Engineers has received $44 million for interim repairs to the dam. While we still need to be prepared this winter, these repairs greatly reduce the risk of future flooding, which is a great relief for the businesses in the Green River Valley.

Renton’s streets are among the best maintained in our region. We have made a huge investment in sidewalk improvements and have constructed new sidewalks in the Sunset area of the Highlands, Lindberg High School and Maplewood Glen. 

Earlier this year, the Renton community voted to annex to the King County Library System. We’re working together with KCLS to ensure the highest quality library services for our citizens. We have established a new library board to represent Renton’s interests and are planning for the construction of two new library facilities in our city.

Despite significant reductions in our parks and recreation programs these past two years, we continue to provide our community with the best possible parks and recreation services. Record crowds attended local festivals and used our parks and recreation programs this past year.

We strengthened and expanded our popular Neighborhood Program, which now serves 63 recognized neighborhoods, with volunteer city staff assigned to each neighborhood. We held 23 neighborhood picnics and served nearly 5,300 people. 

This city is rich with volunteers and we value the involvement of our residents in planning and envisioning the city’s future and serving on boards and commissions.

This year alone, approximately 4,000 volunteers contributed over 60,000 hours of service to the Renton community. We coordinated the very first Volunteer’s Day of Service where over 800 volunteers participated in several projects throughout the city.  If I had to put a dollar value to the services they provided it would be more than $1.2 million a year.

In 2009, through our Housing Repair Assistance Program we were able to complete 870 health and safety repairs, and another 400 repairs during the first six months of this year. This important service that the city provides helps keep housing safe and affordable and improves the comfort and livability of our city’s homes and neighborhoods.

Recently, The Seattle Times and local television outlets reported that the city known for being “Ahead of the Curve” is "Ahead of the Recovery." They were talking about recent reports coming from The Landing. Restaurants and stores at The Landing have enjoyed double-digit sales growth over previous months and last year. Several new tenants came to The Landing earlier this year and there are six new tenants expected to open there by next spring, including Dick's Sporting Goods and Marshalls.

Fairfield Residential at The Landing has already leased 440 of their quality apartments and expects that the first building will be nearly full by the end of this year.

Harrington Square, a very impressive apartment complex in the Highlands/Sunset area, celebrated its grand opening recently and reported that half of the units in their first building have already been leased.  And next week we will celebrate the grand opening of a new supermarket in the same neighborhood. Both sites replaced boarded up businesses that attracted blight to the neighborhood.

A number of new companies located in Renton this year that resulted in over 500 new local jobs to our community. And new businesses opened in the downtown, Cascade Village, Renton Village, Southport and the Highlands.

Downtown Renton continues to attract new businesses including several new restaurants, Pike Place Bakery, a new children’s clothing store and a book store. And the Farmers Market attracted record attendance with over 4,000 people every week and 58 registered vendors.

The Seahawks Training Camp brought over 22,000 people to Renton during the summer, many who shopped and dined in our community.
Private investors purchased the 21 acres south of The Landing and we are looking forward to a significant redevelopment of this area.

We signed a historic agreement with Boeing for a 20-year renewed lease for the Renton Municipal Airport. Boeing continues to have over 2,000 outstanding 737 orders worth more than $157 billion, and announced it intends to increase production rates to 38 airplanes a month by 2013.

Since last spring, Waterways Cruises has been successfully operating their unique sightseeing and dining cruises from Southport in Renton, bringing over 7,000 visitors to our community in its first year of operation.

Some of you attended the recent opening of the Compass Regional Veteran’s Center in downtown Renton. This attractive four-story building occupies nearly 60,000 square feet and offers 58 units of affordable housing for veterans and their families and 8,500 square feet of retail space.

These are clearly transformational times for our city.  This budget is based on the premise that while we are facing exceptionally difficult times, we must continue to forge ahead with our vision for this community.

Next month, voters in the Fairwood area will determine whether or not to annex to Renton. If they choose to annex, Renton will be a city of nearly 114,000 residents. We have prepared a plan that will allow us to provide city-levels of service to Fairwood with a revenue plan that supports all of the staffing and other costs associated with the annexation.

I want to thank our employees for working with us these past two years to address our financial challenges. I’m very pleased that all of our bargaining units, with the exception of one, have ratified contracts for a three-year period that reflects these difficult times. Our employees have been tremendous partners and continue to focus on customer service despite greatly reduced resources.

I want to thank each of our administrators and all those employees whose hard work and collaboration helped us through this budget process.
I also want to thank each of you, for your advice and guidance as we have worked on this challenging budget. 

And I’d like to extend a very special thanks to the Community Budget Advisory Group for volunteering their valuable time and effort. Their thoughtful discussions and advice helped shape this budget and encouraged us to continue to work towards a sustainable, long-term plan that is customer-focused and reflects the priorities of our community.

You have been presented with all of the details for this budget, and our staff will be prepared to lead you through the specifics of this plan during your upcoming Council budget workshop. I certainly welcome your feedback, concerns, and recommendations.

A strong foundation set many years ago has positioned Renton well as the economy improves. This strong foundation, combined with our commitment to doing business more effectively and efficiently, will allow Renton to be strong and stable now and into the future.

Thank you.
Denis Law