Issaquah City Council, from left: Mayor Mary Lou Pauly, Councilmember Stacy Goodman, Deputy Council President Chris Reh, Council President Victoria Hunt, Councilmember Lindsey Walsh, Councilmember Tola Marts, Councilmember Barbara de Michele, Councilmember Zach Hall. Natalie DeFord/Staff photo

Issaquah City Council, from left: Mayor Mary Lou Pauly, Councilmember Stacy Goodman, Deputy Council President Chris Reh, Council President Victoria Hunt, Councilmember Lindsey Walsh, Councilmember Tola Marts, Councilmember Barbara de Michele, Councilmember Zach Hall. Natalie DeFord/Staff photo

Update: Issaquah takes steps to mitigate revenue shortfall

Staff cuts and other reductions in place will cover over half of the estimated $10 million loss

After laying off 22 employees and delaying hiring of 15 vacant positions, the city of Issaquah is now in the second phase of its plan to offset revenue loss in the midst of the COVID-19 crisis.

The city estimates a loss of $10 million in revenue for Issaquah’s general funding.

The first phase — including the layoffs — has already saved almost $5 million in expenses for 2020. In April, the Issaquah City Council also approved 10 unpaid furlough days for non-union employees and a 7% salary reduction for the city administrator, deputy city administrator and department directors for the rest of the year.

In phase 2, the city will try to save $1.6 million with additional department cuts, the largest chunk (at about $711,600) being reduced expenses in the Street Operating Fund. The city will freeze two vacant positions, and also furlough and defer major repairs and maintenance.

“Thanks to the proactive measures we took early on in this crisis, we are not expecting additional expenditure reductions at this time,” Mayor Mary Lou Pauly said. “We are now waiting for additional revenue projections from the state and will be confirming financial assistance from the federal government, state and King County.”

Like other cities, Issaquah is seeing revenue reductions from many angles — from shuttered movie theaters to fewer cars on the streets to schools being closed as a result of the pandemic. Just the lack of funds from the speed enforcement camera near Issaquah High School has caused a $276,000 revenue hit, according to the city. City Finance Director Beth Goldberg said at the May 18 council meeting that the school zone safety fund will still have a sufficient fund balance even without those fines.

The first two phases of the city’s planning leaves roughly $3.6 million left of the $10 million revenue loss, but staff do not anticipate more significant reductions in city spending after this.

“I’ve been meeting with staff over the last few days and it’s the number one question on their mind: ‘Are we done?’ And the answer to that is generally, yes,” City Manager Wally Bobkiewicz said at the May 18 council meeting.

The only other step that might result in significant impacts is the possible closure of the Issaquah City Jail by the end of the fiscal year, Bobkiewicz said. Other then that, they are looking for small changes that can be made to spending.

In a previous interview on the budget shortfall, Goldberg told the Issaquah Reporter her past experience with Seattle during the Great Recession helps prepare her to navigate the financial difficulties Issaquah will face.

Although the city has since taken steps to improve reviewing its finances, Issaquah has struggled with financial reporting in the past few years with state auditors due to understaffing — a recent audit shows 2018 was the fifth year in a row in which the city was found to have reporting deficiencies.


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