Nickels proposes $5 million spending freeze in current city budget

Seattle Mayor Greg Nickels has proposed freezing $5 million in spending in this year's city budget to prepare for financial challenges the city will face in 2009 and 2010. The freezes would affect pedestrian-safety programs, community-center hours and parks security.

Citing the national economic downturn and rising health-care and fuel costs, Director of Finance Dwight Dively detailed the reductions in a memo distributed to the City Council on Monday. The $5 million in freezes would apply to the general fund — $926 million this year. It is the discretionary part of the budget that pays for most city operations. Freezing the money puts the spending on hold but allows for the funds to be used later.

Dively plans to discuss the proposal, which affects the 2008 budget year that began on Jan. 1, at Monday's council briefing. Dively was not available for comment on Thursday.

The mayor also proposed cutting $10 million in capital investments this year because revenue from the real-estate excise tax could be lower than originally expected, the result of a "dramatic slowdown" in the local commercial and residential real-estate markets, Dively reported.

The city had expected the tax to bring in $51 million this year and now expects that amount to be somewhere between $30 million and $35 million. The falloff was offset by $7 million in excess tax revenue from 2007. Reductions in capital spending would include canceling, postponing or reducing projects such as Magnuson Park's Building 30 renovation plans, proposed changes to Third Avenue downtown and improvements to City Hall Park.

"I applaud the mayor for being prudent, because if we're going to face a deficit it's best to get ready for it and prepare ahead," said Councilmember Jean Godden, budget chairwoman. Godden and Councilmember Nick Licata expressed concern over $750,000 in proposed freezes on spending for education and pilot programs for pedestrian safety, which the council has made a priority.

Other spending freezes in the general fund include:

• $830,000 for improvements to emergency medical service

• $500,000 for an expansion in community-center hours

• $250,000 for park security

• $247,000 for firefighter health and fitness

City officials are preparing the 2009-2010 budget proposal but have not concluded what cuts the city will have to make in the next two years.

Nickels expects to make his budget address on Sept. 29.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com