I recently met with a councilman from SeaTac, a small city in the inner-ring suburb of Seattle that boasts about 30,000 residents. As a new councilman in the middle of his first term, Peter Kwon initially asked a lot of questions. And like many of our city leaders and their staff, Councilman Kwon was already rolling up his sleeves, getting in the minutia and figuring out his city’s problems.
Councilman Kwon was specifically interested in where the city’s money was going. In other words, he was interested in the city’s expenditures, one part of the city budget.
A city budget is a comprehensive financial plan that’s in effect for a year at a time. It is an estimate of revenues (either “own source” – collected by the city through taxes and fees – or “intergovernmental” – collected from other local, state or federal governments) and expenditures for a set period over a designated group of categories (such as transportation and police protection, as well as standard operating costs like pensions and salaries). It can be described as a snapshot of city activities and services supported by discreet city funds in the coming year.
Based on the most recent Census estimates, expenditures in the U.S. generally look like the chart below. Short-term debt accounts for one percent of the total long- and short-term debt category (note this total amount is for the U.S. at large and may not necessarily be representative of the broad range of cities).
Many of Councilman Kwon’s queries were regarding the other category, which is largely composed of current operations.
In SeaTac, the first thing Councilman Kwon learned was that all transactions involved paper. So, the council created a process to ensure all paper invoices were available for council to review. Through the invoices, he learned two important things about government-owned equipment:
- Always check the paperwork, and if there’s a warranty, use it.
- If possible, use one service provider across departments rather than pay for multiple service providers.
Regarding point one, Councilman Kwon learned a local community center paid thousands of dollars to repair a heating, ventilation and air conditioning (HVAC) unit — a cost that could have been easily avoided if the council had recognized there was a warranty on the unit.
Luckily, the city staff was able to reverse the charge, and now staffers regularly check for warranties.
Councilman Kwon exemplified point two by leading a public bidding process to find a printing company for city hall. This one change ultimately saved the city nearly 50 percent in printing costs. It’s amazing the difference something as simple as reviewing paperwork can make. With these cost-savings, SeaTac has been able to hire more staff, increase public services and fund a $4 million public park restoration project without using grants and/or raising local property taxes.
With recent shifts in state and federal policy priorities and responsibilities, cities have become a renewed focal point on the national stage. Innovative solutions like the ones Councilman Kwon introduced easily demonstrate that city leaders have the capacity and willingness to solve complex problems rooted in local realities.
About the Author: Anita Yadavalli is the Program Director of City Fiscal Policy at NLC. Anita leads NLC’s Public Sector Retirement initiative, with a focus on research and education for city leaders on retiree healthcare benefits, as well as research and programming on other city fiscal policy issues. Anita holds a Ph.D. in Agricultural Economics from Purdue University, an M.S. in Food and Business Economics from Rutgers University, and a B.S. in Environmental and Business Economics from Rutgers University.