“City In Good, Stable Financial Condition” As 2011-12 Budget Is Presented
“The city is in good, stable financial condition” as work begins on Burien’s 2011-12 biennial budget, interim Finance Director Gary Coleman recently reported to council members.
“We’re holding our own. We’re doing just fine,” City Manager Mike Martin added. Past council policies have the city “standing in good stead” despite the current recession.
“Things could change,” Martin allowed. “But we have ways of dealing with things if they do.”
Burien switched from annual to biennial budgeting for 2009-10 and, after the impact of the recession became apparent in mid-2009, the city council made budget reductions and for the remainder of last year. Additional adjustments for 2010 were made later.
Anticipated revenues for the two-year period that begins Jan. 1 total $57.1 million, Coleman said.
Sources of income:
- Taxes – $42.9 million, 75 percent
- Fees for services – $7 million, 12 percent
- Licenses, permits and franchise – $2.9 million, 5 percent
- Intergovernmental agreements – $2.9 million, 5 percent
- Special assessments – $2.3 million, 1 percent
- Miscellaneous revenue – $1.3 million, 2 percent
Estimated property tax receipts account for the largest share of tax revenue – $14.3 million, 33 percent – followed by sales taxes – $13.1 million, 31 percent.
Additional estimated tax revenue:
- Utility taxes – $7.2 million, 17 percent
- B&O (business and occupancy) taxes – $1.7 million, 4 percent
- Motor Vehicle Excise Tax – $2.2 million, 5 percent
- Real Estate Excise Tax – $1.3 million, 3 percent
- Gambling taxes – $1.2 million, 3 percent
- Transportation Benefit District – $600,000, 1 percent
- Other taxes – $1.3 million, 3 percent
The first draft of the 2011-12 Burien budget for city council discussion projects general fund expenditures of $52.7 million, not including reserve funds.
Local law enforcement, with Burien police services provided through a contract with the King County Sheriff’s Office, accounts for $18.9 million, or 36 percent, of the draft budget – the city’s single largest anticipated expenditure for next two years.
Additional projected expenditures:
- City salaries and benefits – $12.7 million, 24 percent
- City services (combined total) – $12.2 million, 23 percent
- Debt service – $4.3 million, 8 percent
- Jail/District Court services – $2 million, 4 percent
- Intergovernmental agreements – $1.6 million, 3 percent
- Supplies – $500,000, 1 percent
- Equipment – $400,000, 1 percent
A city council discussion of the preliminary 2011-12 budget is tentatively scheduled for Oct. 11, with public hearings on the budget and 2011 property tax levy on Nov. 8.
Adoption of the new budget and property tax levy are planned for Nov. 22. Under state law, local governments must adopt their budgets for the following year by Dec. 31.
“The forecasts assume current service levels updated for the effects of the recent annexation,” Coleman told city council members. They “generally err on the side of conservatism,” and are expected to change as new information comes in.
He added that while “the city is in stable financial condition for the 2011 through 2016 period … current national and regional economic conditions underscore the need to pay close attention to the general fund in particular.”
The reopening of the casino in Burien is expected to increase gambling tax revenues. And while Real Estate Excise Tax revenues, which go to the Public Works Reserve Fund, “are continuing at a slow pace … the real estate market is expected to recover in future years plus the added revenue from the recent annexation.”
In addition to an expected recovery in sales tax revenues, the city will receive an additional 0.1 percent sales tax credit from the state for the annexation of North Burien, Coleman said.
“The most important items for us to monitor closely for the rest of 2010 and into 2011 and 12 are sales tax revenues, [Real Estate Excise Tax], annexation’s financial impact, and the contract for police services with King County.
“Each of these items has the potential to have a significant impact on the city’s general and other funds,” he noted.
[Images excerpted from Burien City Council Agenda for Aug. 2, 2010 (PDF file)]