The city of Spokane is considering the idea of contracting out its parking-meter enforcement dutiesa move that outgoing Mayor John Powers says could save the city hundreds of thousands of dollars a year.


Meanwhile, the proposed 2004 city budget that Powers will submit to the City Council later this month will include no tax increases, reduced spending on River Park Square litigation, and just 1 percent growth in payroll and benefits.


Powers says he believes that spinning off the thankless job of patrolling parking meters would be good both for City Hall and for the downtown core. We want to provide greater customer service, we want to provide an integrated system, and we want a net benefit to flow to the city, he says.


The idea, which is still in its formative stages, likely will be taken to the City Council early next year. If embraced by the council, the spinoff could take place next October, city officials say.


Powers says the city would go through a bid process to select an entity outside City Hall to take on the job, and says that entity could end up being either a private company or another public entity. Another scenario might be that a new public entity would contract with a private company or nonprofit organization to handle enforcement.


City Administrator Jack Lynch says one such candidate would be the Downtown Spokane Partnership, a nonprofit organization that advocates for downtown and already administers another public entity, a downtown business improvement district.


The DSP, he says, would have a vested interest in making sure that parking enforcement becomes part of a more comprehensive downtown parking plan, and that it be handled in a way that ultimately benefits downtown employers, merchants, and shoppers.


Wed like to get out of the parking business, says Lynch. Theres a move among cities to get back to core missions.


Gavin Cooley, the citys chief financial officer, says that currently, parking meters bring in about $1.9 million a year to the city, but it costs about $900,000 a year for parking enforcement. Because of the ongoing River Park Square parking garage dispute, the city is putting all of the $1.9 million in annual parking-meter revenue into an escrow account that could eventually be tapped to offset the parking garages operating deficits. So currently, the citys general-fund budget is hit with $900,000 a year in costs with no offsetting revenue.


Says Powers, Our cost of collection seemed to me to be excessive. We need to have the system operate more in a business-like fashion.


Lynch says the mayor envisions contracting with an outside organization under a cost-plus arrangement. Under such a contract, parking-meter revenues would continue to flow into an escrow accountat least until there is some settlement of the parking-garage controversybut the citys cost of providing parking enforcement could fall an estimated 35 percent to 50 percent once conversion costs had been absorbed during the first year. Thus, after the first year, the city could save as much as $450,000 a year in general-fund expenses, city officials say.


Those expected cost savings would be due to a variety of factors, including potential labor-cost savings, says Lynch.


Adds Powers, Im aware of other cities where they have gotten out of the parking business and ended up with a better system. I think we can do a better job than were doing. I dont think the economics (within City Hall) are as efficient as they could be.


City budget


Finding ways to trim city expenses is becoming more critical, as the city tries to fund programs with less money from state and federal sources, and with only modest increases in its tax base during the soft economy.


Final numbers on the city budget the mayor will propose at the end of the month havent been reached yet, but Lynch says the mayor has some general goals for the 2004 budget.


One is that it wont include tax increasesspecifically, no hikes in the property tax or utility tax. In fact, says Lynch, the city could look at reducing the utility tax by half a percentage point, to 16.5 percent.


Another is that Powers again wants to set aside additional revenues in a statutory reserve account, something he has fought for over the past couple of years. He will propose that $900,000all from the sale of the citys arena parking lots to the Public Facilities Districtbe put in the reserve account in the coming year, raising it $4 million, or about 3 percent of the general fund budget. The city put $1 million in the account this year.


Lynch says the city has been told by bond-rating agencies that cities should maintain a reserve account of 10 percent. That would be about $12 million for the city of Spokane, which Powers has said could be achieved by maintaining a statutory reserve of $8 million plus an ending balance for the year of about $4 million.


The city usually has an ending balance of much more than thatmore than $10 million at the end of 2002 and an expected $8.4 million this year, says Cooley. Lynch, however, says the mayors office is pushing department heads to be more exact in their budgeting, which likely would result in smaller ending balances.


He says city departments in the past relied on carry-overs to fill holes in less-than-exacting budgets. We want to get the budget back to the point where it really means something, Lynch says.


Also in the mayors proposed 2004 budget will be:


Just 1 percent growth in combined wages and benefit costs. Lynch says the city, like private-sector businesses, is faced with continually rising health-care insurance costs and likely cant absorb those hikes completely.


Currently, city employees pay nothing toward the cost of their own medical-insurance premiums, though they are asked to pay a portion of the cost of covering other family members, Lynch says. He says the city expects its medical-insurance costs to jump another 14 percent this year. In the past five years, the cost of medical and other benefits at the city has jumped 140 percent.


Cooley says the city is in binding arbitration with police and fire unions, and will need to negotiate contracts with other city employee unions as well. None of those contracts likely will be finalized before the 2004 budget goes into effect, says Lynch.


It just isnt there, says Lynch of extra money for additional labor costs. He says the city has absorbed $20 million in reductions in state and federal funding annually since 2000, and has earned less money in the investment markets.


Less money for legal expenses related to the River Park Square parking garage litigation. The mayors budget will include $500,000 for that work, about half what it expects to spend this year.


Continued current-level funding of about $350,000 for annual economic-development efforts, including for an economic-development adviser within the city and contributions to external organizations.


An appropriation of $1.3 million for the repayment of $15 million in bonds to be sold for street repairs. The City Council is expected to make a decision on issuing those bonds next week. That annual appropriation would need to be budgeted for 14 additional years.


In general, Powers budget would show modest increased funding for public safety, libraries, community centers, and human services.


The City Council is expected to consider the budget through November, with a final hearing on Dec. 1. It is slated to adopt a 2004 budget on Dec. 8.


The 2003 general fund budget was about $121 million, or about 28 percent of the citys overall budget. The citys enterprise-fund budgets, which include such things as water and sewer utilities, building services, and golf, totaled about $183 million this year. The rest of the overall about $429 million city budget is made up of special revenue accounts, capital expenses, and debt service, together totaling about $125 million.