City gears up for annual budget balancing battle
It’s a challenge the city has faced before – trying to balance the income with the outgo.
That challenge will be much on the minds of the Mukilteo City Council next Monday, Oct. 3, when it is scheduled to hold a public hearing on the 2017 preliminary budget.
Finance Director Doug Volesky said the administration has kept councilmembers in the loop throughout the budget formation process, so there should be no surprises. And balancing the budget remains their biggest challenge.
“We have rising costs,” Volesky said, “and our revenue stream is fixed.
“We either have to raise revenues or reduce expenses.”
The administration has been sending the council monthly revenue reports, including a five-year history and predictions for 2017, so Volesky said the budget approval process “should go a lot smoother this year.”
A year ago, the council added 24 amendments and spent nine public meetings hammering out the 2016 budget.
While the economy has slowly recovered from the “Great Recession,” the flush days for Mukilteo are over. Before the recession, the city relied heavily on construction-related income – permit fees, sales taxes and other revenues.
But Mukilteo is all but built-out, save for the occasional small residential or commercial development, remodels or rebuilds.
For the proposed 2017 budget, the administration is asking for the 1 percent levy limited property tax increase, but isn’t seeking any “banked capacity” for a larger increase.
However, there may be increases for building permits or other fees, and the council is leaning toward raising business license fees (see related story, page 1).
Volesky said the city’s options are limited, so there’s heavy emphasis on “looking for efficiencies.”
Among them was a council presentation Monday on a cost allocation study that would more accurately break down where staffers spend their time so that future budgets would reflect the true costs of city services.
Besides being encouraged by state auditors, it could open up potential new revenue sources, such as grants, that require such specificity to determine eligibility.
The proposed budget, at about $20.8 million, shows a lot of transfers between departments as Volesky and his staff fine tune it, but it is about $300,000 less than this year’s adopted budget of $21.2 million.
There also will be discussion about the city’s reserve fund, currently just under $2 million.
“It’s important to keep a healthy reserve,” Volesky said. But he said under accepted standards, many financial experts would consider that about double what’s needed.
Volesky said residents who like to pay attention should focus on the services the city provides to determine whether they like the direction their electeds are taking, from public safety to public works to parks and recreation.
“Are you getting what you want?” he asked.
But residents also, like the council, need to have “realistic expectations” about what the city can do, he said.
Mukilteo’s property tax rate is among the lowest in the area, so taxpayers have to balance that luxury with the limited options that gives the city to provide services.
“Costs are rising,” Volesky said. “It’s a balancing act.”
The Oct. 3 meeting is scheduled to begin at 6:50 p.m. at City Hall.