Sumner preps for 2009-10 budget
April 30, 2009 · Updated 10:28 AM
By Shawn Skager-The Courier Herald
The Sumner City Council may have some hard decisions to make regarding the city’s biennial budget for 2009 and 2010.
“At the local level we’re beginning to meet the definitions of being in an economic recession,” Deputy City Administrator Diane Supler warned at the Aug. 11 study session.
According to a handout distributed to council members, Sumner is experiencing a shortfall in sales tax revenue - which accounts for 26 percent of the general fund revenue stream.
In the first six months of 2008 sales tax revenue was down by 12 percent in the city, compared with the same period the year before.
According to Supler, Sumner relies on economic forecasters when making predications for the upcoming budgets.
“The economic forecasters never predicated this,” she said of the continued economic woes. “Last year they said we would begin to see an upswing.”
Supler said that rather than an upswing they saw a downturn.
Additionally, the original assumption for cost-of-living increases for the next two years were pegged at 3 percent. In 2009, however, the COLA will be 5.51 percent, according to the council handout. The increased expenditure for the COLA must be passed on to employee payroll, which represents 62 percent of budgeted expenditures for 2009-10.
The problem is further complicated by the fact that the city faces restrictions placed on raising property taxes, another source of revenue for the general fund.
“Part of it is our limitation on property tax, which goes back to the Eyman 1 percent limitation,” Supler said.
The initiative, I-747, passed by voters in 2001, limited to 1 percent the amount local governments can raise property taxes.
Therefore, the city will have to look to other avenues to make up the deficit in the general fund, including cuts in discretionary budgets.
Supler remained optimistic that cuts and savings could be found.
“I’m hopeful that there will be around a $200,000 difference between revenue and expenditures,” Supler said.
Earlier this year the city took a step toward reducing the deficit by annexing into East Pierce Fire and Rescue.
According to Supler’s handout this move saved 50 percent of the city’s deficit.
City departments were also asked to make a 4 percent cut in discretionary funding this year.
In order to give council members the time to find ways to deal with the budget crunch, the city has asked departments to turn in their budgets earlier than normal.
Then, it’s up to the council to find ways to trim the fat or increase revenue.
“We talk about a toolbox, four things that we can do,” Supler said. “We can increase sales tax, grow the revenue pie. So we’re trying to recruit more retail businesses, like the Honda dealership (coming into the old Sumner Tractor location).”
“The other thing is the council has some options to increase taxes,” she added. “Is that part of the solution? We need to look at the utility fees and charges for services and make sure they’re self sustaining.”
According to Supler the four items in the toolbox are: increase efficiencies; increase revenue; raise taxes; and cut or change service levels
“The most important thing is to plan for the long term,” she stressed. “As we get more utility accounts, we can’t add more office staff to handle them. So what we’re trying to do is increase efficiencies by using technology.”
Supler added that beefing up the city’s Web site - automating some of the things that people normally have to come down to city hall to do - may help.
“It’s all these little things,” she said. “Like the senior center, we have an HVAC (heating, ventilation and air conditioning) company come out four times a year (for maintenance). How can we reduce that?”
Supler said that a capital project outlay to reduce the maintenance on the systems might be one way to save money in the long run.
“We are just trying to set the stage for the council,” Supler said. “We’re trying to get all the numbers in and at the end of August start presenting options to the council. Our next goal is to get all of our numbers in and see where we’re at.”
Reach Shawn Skager at email@example.com or 253-862-7719 ext. 208.