LETTER: ‘City of Burien Has a Structural Financial Deficit & is Going Broke’
To the Editor:
The City of Burien has a structural financial deficit and is going broke.
At the City Council meeting of October 22, 2012, the City Manager/Mike Martin and the City Council tried to deny that this is true. Their refusal to face the facts in the 2011 Berk Report, page ES-4, is very serious for the financial future of Burien:
City of Burien 2013 2014 2022 2023
Core Expenditures 24,909,000 25,785,000 34,250,000 35,607,000
Core Revenues 22,472,000 22,885,000 26,346,000 26,973,000
Net Revenues (2,437,000) (2,900,000) (7,904,000) (8,634,000)
as % of Expenditures -10% -11% -23% -24%
Regardless of annexation, the City will have to continue to take steps to bring revenues and costs in line in the form of a balanced budget. Because area Y does not bring in enough revenues to cover the costs of the services it needs, if annexation is approved, these deficits will be much higher.
As summarized in Exhibit ES – 3, the City’s fiscal challenges worsen over time as costs continue to grow faster than revenues…. Growth in general fund revenues, assumed under existing City tax/fee policies and calibrated to growth in the area, does not keep pace with the core costs (growing at only 1.8%)….As stated previously, a City cannot, in reality, operate with a budget deficit – cities are legally required to have balanced budgets. As with all cities, City of Burien leaders will continue to make policy choices to balance the budget each budget cycle. The result is that large projected budget deficits do not materialize. Each budget period the City Council will make incremental adjustments to the existing budget and policy structure to keep the City functioning within its means, continually holding potential larger budget deficits at bay.”
The Berk financial report assumed that Burien’s income from property taxes would grow by 2% annually and then increase to 3% by 2021. This has not happened and Burien’s income from property taxes has declined by – 8.5%. So next year Burien will lose $1million + in property tax revenue. This was not anticipated in the 2011 Berk Report or by the City. To try to fix the problem, the City claims to have cut $1 million dollars from staff services but this still does not fix the problem of the -10% to-11% deficit from the expenditures exceeding the revenues. So rather than raising taxes or further cutting staff services and outside contracts, the City Council and City Manager have gone into the City’s savings accounts to balance the 2013-2014 budget. These savings accounts are supposed to be saved for unexpected emergencies and not to pay for expected, ongoing budget expenses.
The City is clearly going broke and the City Council is refusing to do the necessary things to correct this problem. As a further problem, the City Council and City Manager have continued to pursue the Annexation of Area Y/North Highline/White Center. Area Y does not bring in enough revenues to cover the costs of the services it needs. The Sales Tax Credits that the City Manager continues to talk about will not cover the costs to run Area Y and will further cause Burien financial problems.
No matter how much the City Manager/Mike Martin, and some Council members try to deny that Burien is going broke, the information from the Berk Report and the current way that the Council is handling the budget shortfall indicate that Burien is Going Broke. Read the figures.
– Debi Wagner
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