Layoffs coming to Olympia as city tackles $6.8 million budget deficit
Olympia City Manager Jay Burney said 26.75 full-time positions will be cut to help address a $6.8 million budget deficit going into 2025.
The cuts include 18 permanent job losses, including one assistant city manager.
The total preliminary operating revenue for 2025 is $212.7 million, Burney said. He said 52% of that is the general fund, which is fluid and less stable than dedicated funds that come from utilities, services, and other taxes.
Burney said 71% of the city’s general fund expenses go to personnel, at $81 million. Because of that, he said it’s difficult to make budget cuts without impacting people.
At the same time, more staff is needed to help make progress on some city initiatives. There’s nearly $1 million of enhancements in the 2025 budget for public defense contractors, the new Youth Council and future annexation plans.
Burney said some additions to next year’s budget are revenue neutral and don’t add to the general budget, but are instead covered by utility rates and fees. They include positions and equipment in the fire, public works and strategic communications departments that cost of $1.4 million.
More than $3.2 million already was cut from the original general fund budget deficit to bring it down to about $3.9 million through a mix of permanent reductions, staffing changes that adjust position classifications, and some delayed hires.
Of the 26.75 positions proposed to be eliminated, three seasonal employees are being cut, as well as 4.75 positions from Community Planning and Development and one position from Parks.
The 18 permanent staff reductions saved the city $2.2 million, and the other staffing changes will save it $419,000. Delaying hires in eight positions will save nearly $600,000.
The city reported having 686.85 full-time employees in the 2025 preliminary operating budget.
Burney said he will bring a plan to the City Council on Nov. 19 to use the city’s remaining fund balance to cover the last of the budget deficit. He said the estimated general fund balance is $18.6 million, which includes a 10% reserve of $11.4 million. The remaining $7.2 million is above what the city is required to retain at the end of the year.
Using the fund balance would leave the city with about 13% reserve, or $14.7 million, which Burney said is a conservative estimate.
Burney said the staffing reductions help the city make progress in its 10-year budget forecast.
“We come fairly close to breaking even in 2026 and 2027, but we’ll need continued focus and work and potentially further reductions or new revenues into the future to continue to have a sustainable budget,” Burney said.
Council member Robert Vanderpool said the budget conversation hasn’t been an easy one for his first year on council. He said talking about staffing cuts is difficult for someone like him who’s interested in getting policy done and working ahead.
“I’m probably not the only one who says that they’ve lost sleep over this. Now, it’s not an easy task to be done, but it’s a task that needs to be done,” he said. “You know, we all throw our hats into this because we believe in public service. I just kind of want to speak to that for a moment to say that, you know, we and the staff and everyone here at the city do public service because we believe in it.”
He said that the city will survive, but he may not have the same amount of brown hair he does now. Burney joked he didn’t have any gray hair in his beard before he became city manager in 2019.
A second public hearing on the budget will take place at the Nov. 12 city council meeting. The final budget balancing meeting will be Nov. 19. Burney said the Finance Committee will bring ordinances to the council by Dec. 10.
This story was originally published November 12, 2024 at 5:00 AM.
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