Pulling from reserves while delaying projects and job positions are only temporary solutions to shoring up millions of dollars in budget shortfalls, according to former Coeur d’Alene Mayor Steve Widmyer.

“The problem with that is, that’s not a permanent solution,” Widmyer told the Coeur d’Alene Press last week. “That’s just one-time money. In the budget, you can't fix an ongoing issue with one-time money.”

City officials learned in late July that it’s now heading into next fiscal year facing a $3.1 million deficit. 

Last week, however, City Finance Director Katie Ebner presented a way to soften the blow. The plan could include transferring remaining annexation fees, placing certain new hires on hold and, potentially, pulling $680,532 from city reserves. The city typically maintains reserves at 28% of its operating costs.

If Coeur d’Alene City Council approves budget revisions, it will help reduce the projected $3.1 million 2027 fiscal year deficit to about $1.92 million. Meanwhile, with a budget hearing slated for Sept. 1, city officials will also decide whether they want to raise the local property tax rate by 7%.

Contributors to projected budget woes include anything from negotiated employee wage increases and rising health insurance premiums to additional staffing needs and increased funding for the city street overlay program, according to Ebner.

“These increases, combined with revenues that have not grown at the same pace as expenditures, contributed to the preliminary imbalance,” she told the Coeur d’Alene Press last week.

Last year, labor groups representing both the Coeur d’Alene Police Department as well as regular city workers were given a 3.5% pay increase to keep up with cost of living, costing the city $656,361. Meanwhile, the Police Association recently proposed a contract that would impose additional cost-of-living adjustments each year for the next three years.

To help the city’s budget, Widmyer said it should look into either placing cost-of-living adjustments on hold, perhaps creating new medical insurance payment plans or creating recurring revenue sources. Recurring revenue sources could potentially include charging additional parking for out-of-towners.

“That’s going to add up to several hundreds of thousands of dollars,” he said. “(The city) needs to come up with ideas like that.” 

Dan Gookin, Coeur d’Alene’s current mayor, said the goal is to get “ahead of the curb” when it comes to the current trajectory of the city budget. To do so includes whether it potentially raises property taxes by 7%.

“We’re not cutting levels of services,” he said. “But we are looking at property taxes because we need to get ahead of the goal.”

Gookin went on to say that the city is currently dealing with inflation, increased population and legislation that hinders how much the city can spend. Through 2021’s House Bill 389, the Idaho Legislature voted to place an 8% annual cap on revenue growth for all local government budgets.

Had that cap not been implemented, Gookin said the city projected receiving about $3 million annually after it terminated its Urban Renewal District at the close of 2021.

Because of that cap, however, Coeur d’Alene collected only $201,000 in construction revenue last year, even though it saw $84 million in new construction value.

As to what the city decides to do with the budget next month, Gookin said the city can potentially look at whether it wants to continue making cost-of-living adjustments.

“In order to keep good employees, we have to pay them a good wage,” he said. “It's an interesting balancing act.”

    Gookin