City Council approves budget with no property tax hike
November 23, 2012
By Caleb Heeringa
New: Nov. 23, 3:29 p.m.
The Sammamish City Council unanimously approved its 2013-2014 budget with only a few quibbles from councilmembers concerned about future parks and economic development spending.
The $107.8 million, two-year budget passed at the Nov. 20 meeting by a 6-0 vote, with Councilman John Curley absent. The budget forgoes a property tax increase for the fourth straight year, but adds approximately $380,000 in new personnel costs through four and a half new positions, including:
- A new police officer, who would be used for traffic enforcement and patrols around the city during the mornings or evenings.
- A city planner to help with an upcoming review of the city’ comprehensive plan. This would be a two-year position.
- Two new storm water employees to help the city abide by new federal storm water requirements. These include an inspector to do more regular checks on storm drains and catch basins and a maintenance lead to repair problems in the system more quickly.
- A half-time administrative position to help with human resources and administrative tasks in the police department. The position partially restores a similar full-time position that was cut when the city reduced staff in 2011.
The budget overall calls for about $7 million more in spending than it takes in in revenue, bringing the city’s ending fund balance from it’s current level of $52.9 million to $45.8 million at the end of 2014. The city plans to spend $25 million of that ending fund balance on the proposed community and aquatic center.
Finance Director Joe Guinasso pointed out in an interview that $8.3 million of that spending is contingency funds for major construction projects, and it’s unlikely the city will spend that all of that money.
Though sales tax revenue will be rising only modestly with the addition of new construction in the city, that same construction will likely add to the city’s coffers in other ways. The city saw much more revenue from home construction and real estate sales than it was expecting in 2012.
Real estate excise taxes, charged on the sale of a home, are projected to come in at $2.9 million compared to the $2.2 million that was budgeted for this year. Impact fees, charged to developers when a home is built, were also well above the projected level – approximately $2.6 million compared to the $925,000 that was expected this year.
But despite the recent good news, Guinasso said the city is being cautious about expecting those levels of revenue going forward, particularly given the looming federal issues that could impact the economy.
“There’s a lot of uncertainty as far as the ‘fiscal cliff’ and lifting of the Bush-era tax cuts,” Guinasso said. “There’s the potential that down the road that the credit markets could tighten up again and we see a double dip recession.”
So despite signs that the real estate market is picking up again, the city is budgeting for $2.2 million in real estate excise taxes in 2013 and 2014 – the same as this year. The budget also expects approximately $1.8 million in impact fees in 2013 and $1.6 million in 2014 – higher than what was budgeted this year but lower than what the city actually saw.
Councilman Ramiro Valderrama said he was concerned about the level of spending discussed in the city’s parks master plans and the potential impact on the cost of maintaining the city’s parks. He noted that the Parks and Recreation Department is the third largest expense in the city’s general fund after police and fire services, taking up 12.8 percent of the budget.
“I love parks. I’m a heavy user of our parks,” Valderrama said. “But it has to be sustainable.”
City Manager Ben Yazici said the council would have ample opportunity to tweak park plans when they see the Southeast Eighth Street master plan early next year.
Valderrama also questioned the justification for hiring a new police officer in a city that has the second-lowest crime rate of any city in King County.
“I still don’t under stand why we’re hiring them and I am on the (City Council’s) public safety committee,” he said.
Administrative Services Director Mike Sauerwein said the extra officer will allow the department to get closer to its goal of having a minimum of three officers on patrol at all times. The department currently has a two-officer minimum.
Councilwoman Nancy Whitten said she had concerns about the $4.5 million the city is earmarking for economic development and Town Center infrastructure, saying she wanted the council to deliberate more on exactly how the money would be spent.
“I’m concerned about the process and how it got to us here at the last minute as a budget item,” she said.
The city will be embarking on an economic development plan in 2013 that is aimed at examining the viability of its Town Center plan and what else the city can do to encourage business growth.
Deputy Mayor John James said he approved of the budget but said the city’s plans to spend more than half of its savings on a community and aquatic center will mean that city may not have as much financial flexibility in the coming years.
“I’m probably more inclined to be a little tougher on the financial management of the city going forward without that safety net (of city reserves,)” James said. “The next budget cycle the council is going to have harder work to do.”
Reporter Caleb Heeringa can be reached at 392-6434. ext. 247, or firstname.lastname@example.org.