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Poulsbo finalizes $9.3 million budget, approves management raises
Poulsbo will run on a $9.3 million general fund next year, when the city council approved the 2012 budget on Wednesday. The city will rely on $199,190 in reserve stabilization. If all expenses and revenues come in as projected, explained Finance Director Deb Booher, the city will need to tap into that amount. However, the city also allocated roughly $200,000 in reserve stabilization in the 2011 budget, which has not yet been touched. Booher said this is because either expenses were lower, revenues were higher or both.
"We have not hit the reserves since I became mayor," said Mayor Becky Erickson.
The city's total funds are $25.7 million, a 31 percent decrease from 2011, due to capital projects.
Bringing the budget gap down from $474,177 to $199,190 brought sighs of relief from the council.
"We're in a period of declining revenue and increasing costs, and it's just a big pinch," said Councilwoman Connie Lord.
Erickson said she thinks the year after next will when budgeting will get easier again — "We have a lot of business development in the next 18 months."
The council had some big decisions to make near the end of the budget process, including allocating money for managerial staff raises. At the Dec. 7 meeting, council members approved a wage increase schedule for management positions, their first raise in six years.
However, many council members said they wanted to review the policy in the future, which sets a 3 percent cap each year on wage increases. Because of the length of time since the last increase, some of the positions are up to 19 percent lower than the average market wage. Councilman David Musgrove pointed out that, with the new schedule, it would take more than five years for some positions to reach today’s market wage, while others would reach the average wage in two years, because of the 3-percent-a-year cap.
All positions did receive a 1 percent cost-of-living adjustment at the beginning of 2011.
“The teamsters and the police union have the opportunity to review salaries every three years,” wrote Deanna Kingery, human resources manager, in an email. “The council policy is to review exempt, management positions every five years. The exempt salary review done in 2008 wasn’t implemented because of economic uncertainly at that time.”
Staff also reviewed the wage schedule chart, which places the highest average salary at the top step, decreasing each step by 3 percent, for a total of six steps. Some current salaries do not even reach the lowest step on the new chart. In this case, Kingery said, those positions would automatically be bumped to the lowest step in the new chart. Future salary increases are then at the discretion of the mayor after evaluation.
Kingery compared Poulsbo with seven cities — Enumclaw, Gig Harbor, Port Orchard, Snohomish, Snoqualmie, Sumner and Tumwater — to find the average wage of 15 department head positions in order to be competative, including Police Chief and heads of Public Works and Parks and Recreation.
Since the Poulsbo salaries haven’t kept up with market wages, each time a manager has left their position in the past several years, their replacement usually receives a closer salary to the market range, higher than the previous salary. This process is very expensive for the city.
“Those who don’t leave us are not getting rewarded,” said Councilman Ed Stern.
“People who work for the city of Poulsbo are the most expensive part of the city, but [they] are our greatest asset,” said Mayor Becky Erickson.
The council previously approved $11,685 in the 2012 budget for these salary increases.