Sims, budget task force move to protect financial gains, preserve fiscal discipline

Oct. 4, 2005

Sims, budget task force move to protect financial gains, preserve fiscal discipline

John Warner and Bob Wallace, Budget Advisory Task Force co-chairs, joined Executive Sims to express their support and endorsement of the proposed Financial Policy Ordinance. Stemming from earlier task force recommendations, the legislation seeks to protect the long-term financial stability of King County government.

Citizen leaders of the King County Budget Advisory Task Force today joined King County Executive Ron Sims to endorse legislation that puts into law stringent county financial policies. Stemming from earlier task force recommendations, the legislation seeks to protect the long-term financial stability of a government that has cut $137 million from the general fund since 2001.

Reserve funds would be maintained at minimum levels and the amount of debt would be limited in the proposed budget ordinance which will, upon passage, give the force of law to a set of budget policies that the executive and council have been using in recent years to bring fiscal discipline to King County government. Most of these policies were previously approved by council motion and have helped the county maintain one of the highest bond ratings in the country – higher than the State of Washington – as the county grappled with a sustained economic downturn and a large structural budget deficit.

“We have worked overtime to turnaround county finances,” said Sims who has led the county to reprioritize, consolidate and streamline functions as well as tackle increasing health care costs. “We owe it to today’s taxpayer and to future residents to protect the gains we’ve made by making good practices the law.”

Among the policies the ordinance would make law are requirements to:

Maintain a minimum 6 percent undesignated general fund reserve;
Maintain an emergency sales tax reserve of at least $15 million;
Limit bonded debt service to no more than 5 percent of revenue; and
Prohibit funding of ongoing operations with debt.

The ordinance also adds a new requirement to analyze budget actions, similar to the out-year scoring performed at the federal level by the Congressional Budget Office. This analysis will ensure that future deficits are not created from funding ongoing costs with one-time revenue.

Existing policy prioritizing current expense fund allocations would also be enacted into law. First proposed by the Budget Advisory Task Force, the policy has been used by the executive and council to determine necessary budget reduction targets.

The ordinance allows the council to suspend the rules. In such cases, the council must provide a detailed explanation for doing so.

Joining Sims in support of the ordinance were Bellevue business leader Bob Wallace and retired Boeing executive John Warner, co-chairs of the King County Budget Advisory Task Force which provided Sims with crucial guidance for attaining fiscal stability in the 2003 King County Budget Advisory Task Force report.

"I applaud the Executive and the County Council for the hard work they've done," said John Warner, Budget Advisory Task Force co-chair. "This would give the county long-term assurance and a long-term view that they can sustain the work they've done."

"While the job isn’t finished, the county has made remarkable progress,” said Bob Wallace, Task Force co-chair. “We felt we had made good recommendations but it is a pleasure and somewhat of a surprise for the county to follow through and produce results. This ordinance would codify these responsible behaviors.”

Wallace and Warner, in a joint letter to the Executive Sims and Councilmember Larry Gossett, called the financial policy ordinance entirely consistent with the task force recommendations for streamlining government and controlling spending.

They credited King County’s recent success in reducing health care costs; promoting annexation and incorporations in Klahanie, East Renton and Fairwood; and investments in technology that support public safety, jail health and personal security.

“Now is the time to consolidate and preserve the gains achieved, as an effective safeguard against the unseen but inevitable fiscal challenges of the future,” they wrote.

Related information:

Budget advisory task force letter of endorsement (PDF, 54K)
Budget Advisory Task Force Progress Report (PDF, 220K)