Expectations of a difficult budgeting session were realized this week when City Manager Steve Sarkozy released his preliminary budget recommendations to the City Council. Sarkozy, saying the city faces a projected $11 million drop in revenues, recommended defunding several transportation projects and eliminating 59 full-time equivalent (FTE) positions, a reduction of nearly 5 percent of the city’s 1,318 employees.

Sarkozy said this will involve laying off 25 people.

But not all hope was lost for the 2011-12 budget. Sarkozy plans to use the budget to re-evaluate Bellevue’s expense and revenue philosophies.

No new taxes are included in Sarkozy’s plan, and because of the city’s past thriftiness, Bellevue has managed the recession better than other municipalities.

This budget, and several of the economic assumptions it relies on look toward the long term. Many programs have suffered since the recession began in 2008, and will not return to pre-recession levels for 2-3 years, but the worst appears to be over, and the economy is growing at a small rate. Sarkozy said this budget process, which he said was the most comprehensive in the city’s history, will set up Bellevue for future success at the expense of current conditions.

“It’s taking the hit now so that we can sustain this budget on a long-term basis,” he said.

Sarkozy said no stone has been left unturned in this year’s budget process. Staff reductions, program cuts and a drop in capital projects are all a part of this process.

“The business-as-usual approach is insufficient to deal with this issue, so we’re considering this budget process to reset the financial conditions so we can move forward in 2011.”

The city has produced savings through cuts in staff costs, including securing agreements with employees to forego cost of living adjustments in 2010 and 2011 and freezing hires for certain non-essential positions.

Though specific program cuts have not been fully identified and agreed on, Sarkozy outlined several cost-saving plans outside of staff. The transit center police substation would be closed. The four Bellevue community centers would close on Sundays, with the Highland and North Bellevue centers closed on Saturdays and part of Friday. And 1,400 mid-block, non-residential street lights would be turned off.

The Capital Improvement Plan also faced the ax. The budget predicted the city will be $100 million short in revenue over the seven-year period the CIP covers. The 2011-17 CIP was presented to the council with a budget of $353.3 million, with CIP committee recommendations to leave an additional $31 million worth of projects unfunded.

More than $29 million of that came in the form of transportation projects, including $6 million that would have went toward neighborhood sidewalks, $5.2 million on 145th Place Southeast and 4.4 million on 108th Avenue SE and Bellevue Way to Interstate 90.

The council is expected to finalize the budget in the first council meeting in December, with several meeting times set aside to debate which programs should receive more or less funding and elicit input from the public.

Several council members wanted to see more information on the East Link light-rail project’s impact on the budget.

The exact amount of how much the city will end up paying for a potential downtown tunnel remains unclear, and the overall impact on the city’s budget from today until the project opens is unknown.

“I think we need to have a global look at all the costs and expenses of East Link as much as it is quantifiable,” said Council Member Jennifer Robertson.

Budget Talk

The City Council will debate the budget and its various components several times before its passage in December.

Oct. 11 – Budget policy discussions

Oct. 18 – Operating budget discussions

Oct. 25 – Operating budget discussions

Nov. 8 – Operating budget discussions

Nov. 15 – Third public hearing

Nov. 22 – Operating/capital/policy discussion

Dec. 6 – Budget adoption