Letters for the week of May 16
Stotlz right on the money
I am responding to Councilmember Kevin Stoltz’s op ed “Heads would roll” [The Beacon, May 9, page 4]. He was right on the money. Mukilteo has a problem with its finances, and that is why I introduced a Balanced Budget Resolution at the previous two City Council meetings, with no success of passing.
Even with a increase in 3 percent in property taxes and a 1 percent increase in the utility tax this year, the city still has a $350,000 projected deficit in its operating fund and a $900,000 deficit in its REET 1 fund.
Why is the REET 1 fund important? This fund is the primary fund to pay the bond payments for the new community center as well as other important capital projects. The bond is for 20 years and the city has 18 years left to pay on it.
The bond was 100 percent financed with no money down. In 2010, there was about $5.9 million in the REET 1 fund. By the end of 2012, the REET 1 fund is projected to have a balance of $3.8 million. That is a loss of $2.1 million in just 3 years.
Why the huge deficit? There is not enough revenue coming into the fund to cover the expenditures going out. If the city continues to have these huge losses, the REET 1 fund will run out of money and not be able to cover the community center bond payments alone.
The only other fund that has a substantial balance is our operating fund, which will have a projected balance of $4.1 million by the end of 2012. The city will have to use money from the operating fund to supplement the bond payments for the community center and other capital projects that should be funded by the REET 1 fund.
Stoltz and myself are looking for a solution to this problem, and it is the reason why I introduced the Balance Budget Resolution. It would require the council to see what a balanced budget would look like.
If you would like to discuss this issue or any other city topic, please join me and Stoltz in the Rosehill Room at the Rosehill Community Center at 7:30 p.m. this Thursday.
Mukilteo City Council