Letter to the Editor: City should take a hard look at payroll costs
Last updated 2/17/2021 at 12:35pm
I read an article from the mayor of Everett that they have an $18,000,000 shortfall in their 2021 budget and may have to cut services to the citizens of Everett. Washington state law requires a city to balance its budget each year unlike the federal government that can spend more than it earns by borrowing from China.
I hope the Mukilteo mayor and City Council are not in such a poor position since property prices are still going up in Mukilteo, so I assume the revenue stream will go up. But some suggestions for the mayor and City Council to consider to reduce the chances of a decline in revenue and potential cuts in services.
1. The reserve fund or I would call it a “rainy day fund” has been set at $1,000,000 for over 12 years. In these good times, can we use some of the revenue to increase the “rainy day fund” to $2,000,000 as a hedge against future revenue declines to help buffer cuts in services.
2. One area costs get out of control in cities is the payroll. Salaries and benefits are around 70% of taxes in Mukilteo. The average salary and benefit has increased from $83,100 in 2008 to $122,200 n the 2021 budget. I would hope the City Council is taking a hard look at payroll costs, particularly on pension costs.
For example, I believe Mukilteo is still using Washington state’s “defined benefits pension funds,” which will provide a long-term liability cost for all future retirees. Boeing and other companies negotiated with their unions to convert to “defined contributions pension funds,” which helps Boeing to be able better control its long-term costs of pensions.
Can Mukilteo convert to “Defined Contribution Pensions” to help future cost control for citizens? High costs of future “defined benefits pensions” is one of the issues facing cities to maintain payments to retirees at the expense of ongoing services to citizens.
Running a city is a challenge in many ways but I hope the mayor and City Council can assure us that they are taking appropriate actions to maintain services and keep future costs under control.