City revenue on the rise, but still below normal

May 6, 2011

By Tim Pfarr

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The city’s revenue in the first quarter of this year is better than it was last year, which is indicative of a slow economic recovery, at least in the area of development and sales tax revenue, city Finance Director Christine Olson said.

The city has collected $1.45 million in revenue so far this year, which accounts for 24 percent of the $5.95 million budgeted in the general fund for the year. The city has spent $1.44 million so far, which accounts for 23 percent of the $6.38 million budgeted in the general fund for the year.

Olson said $6.38 million is likely higher than what the city will pay out of the general fund for the year, as other city funds will reimburse some expenses.

Sales tax collections for the year are at 19 percent of what was budgeted for the year, which is about 4 percent below what is typically collected in the first quarter. By the end of the year, that could amount to a $31,000 shortfall in sales tax revenue.

Olson said expenses from the city’s contract with the King County Sheriff’s Office could be higher than expected for 2010. When the city’s officers are sick or on vacation, the city must pay to have an additional officer fill in temporarily, and the exact cost of that can often be hard to predict. The city will pay for the 2010 overtime this year.

Olson said she expected the additional cost to be about $20,000, but the cost of that in 2010 turned out to be $51,000.

However, she said the city budget is in fairly good shape at the end of the first quarter.

“I believe we’re dong fine. I’m cautiously optimistic,” Olson said. “There’s nothing to trigger any concerns right now.”

Some items could offset revenue shortfalls, such as the police contract for 2011, which may come in under budget. The city is also saving about $10,000 per month by leaving the public works director position unfilled.

City Manager Rob Wyman said he is interviewing candidates. He said the position will be filled in as little as three weeks if he hires someone from the current pool of candidates, but it could take as much as three months to fill the position if he doesn’t.

This winter’s weather was a mixed blessing, because the city didn’t use all of the money it budgeted for snow removal, although there is a large bill to pay from December’s landslide on Newcastle Golf Club Road.

The permanent fix to the hillside will likely cost between $400,000 and $650,000, but the city could receive money from the Federal Highway Administration to pay for the repair, Wyman said.

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