You are Mukilteo’s financial future
You may have heard that in 2011 our city is expected to run about a $600,000 deficit in the general fund and close to a $500,000 deficit in the REET (Real Estate Excise Tax) due to the payments for the new community center.
The city is spending about $1.1 million per year more than it takes in.
Thanks to Mukilteo voters passing the EMS levy last year, $560,000 that previously subsidized the EMS fund from the general fund isn’t part of the general fund deficit equation.
If Mukilteo taxpayers hadn’t passed the EMS levy, we’d instead be looking at a total deficit closer to $1.7 million.
Fortunately for the current electeds, those who preceded us had a policy of saving one-time monies and so had saved up a significant amount of money.
That’s why the city is able to run an over $1 million per year deficit, but at this rate of spending, it’s not going to last very long.
After the big spending decisions had been decided, the council (actually the city’s finance director) created a long-range financial planning team to propose policy to rein in the unhealthy spending habits of the current electeds.
Unfortunately, the proposed policy that has come out of this process is that the city has cut almost all the expenses that can be cut and the solution is to raise revenue.
That’s where you come in. The current council has already adopted policy that relies primarily on tax increases (and some wishful thinking) to eventually get the deficit spending under control.
There are options that don’t rely so heavily on more taxes for the Mukilteo taxpayer. But it requires a candid discussion at the council level. That’s not happening.
For example, as you may know, the Point Elliott room in the new community center is a very popular venue, especially for weddings.
In the summer, people are camping out to be the first in line to reserve their space for the following year’s rental (the room can be rented up to one year in advance).
At the last council meeting, a proposed lottery system was approved to help eliminate the overnight camping and an across the board rental rate increase approved.
Effectively what was proposed by the administration and approved by the council resulted in allowing the Point Elliott room to be reserved for up to 17 months in advance instead of 12.
In addition, the proposed increase is literally leaving money on the table regarding the rental rates charged to non-residents.
I had proposed two amendments that would have rectified these flaws, but didn’t even receive a second so they could be discussed.
After all, if 60 percent of the rentals for the Point Elliott room are for non-Mukilteo residents yet 100 percent of the debt service for the new building is from Mukilteo residents (yes it is!), why not maximize the non-resident revenue?
I’m supportive of funding a community center but I’m not supportive of Mukilteo taxpayers footing 100 percent of the bill when 60 percent of the “wedding” business is non-residents.
Even with the successful weekend rentals of the Point Elliott room primarily for weddings, the operating deficit for the community center is expected to be about $250,000 in 2011.
But that doesn’t include the full time facility attendant or maintenance so, in reality, the operational deficit is very likely closer to $400,000.
Unfortunately, it appears the revenue from recreational programming is only going to be about 60 percent of what was budgeted which adds another $50,000 to the operating deficit.
This is a perfect example of how the ignorance of basic business and economics will result in Mukilteo residents picking up the tax burden when non-resident revenue could and should be leveraged.
While I’m on the subject of alternatives that would save Mukilteo taxpayers money but would never be considered by the current council, some are discussing the savings that could ensue by changing our form of government from council-mayor to council-manager.
Currently the mayor makes $96,637 with benefits and the city administrator makes $149,292. The current federal lobbyist contract is for a total of $150,000.
The grand total of these three items is $395,929.
If Mukilteo voters approved the change, and the council did more representing of Mukilteo to our federal and state representatives, at least $200,000 Mukilteo taxpayer dollars could be saved each year.
And, finally, if you’ve made it this far and don’t think the financial situation of the city is that bad or you don’t mind the tax increases being proposed I have something you might be interested in.
Considering the $500,000 per year deficit in the REET fund due to the community center bond payments, why don’t we have a philanthropic donation process to help pay for the community center, build a gym or tennis courts that didn’t make it into the new community center, or just help fund public safety capital projects like sidewalks and other pedestrian/vehicle separation projects that went on the back burner when the council decided to use that money to make payments on the community center?
This has been suggested to me several times, I’ve brought it before the council more than once, yet no action has been taken to even discuss it.
This being an election year, I would be remiss if I didn’t at least mention there is a group of three candidates who represent a “business as usual” philosophy. Two of them are incumbents.
They’re easy to identify by the group of three similar-looking oversized signs that are littering Mukilteo. Look under the signs for the mini-signs of their opponents.
That’s who you should vote for. Next month I’ll tell you why.
The preceding feature is published the second Wednesday of each month for The Beacon and is the opinion of Kevin Stoltz and may or may not represent the views of the Mukilteo City Council.