Revenues may be down this year in the city of Bonney Lake, but on the other hand, expenditure projections are also down, meaning Bonney Lake is projected to finish the year in better shape than initially anticipated.
“Each department is economizing,” said Finance Director Al Juarez. “Everyone knows what the economic condition is and is being extremely frugal.”
Juarez said department heads have been restraining their spending as much as possible and any purchase that can be put off is being put off.
Combined with unexpected savings from a few of the city’s cost-cutting measures and a $231,000 debt payment for the police department coming out of the drug seizure fund instead of the general fund, Juarez predicts the city will not have to dip as deep into its fund balance as thought when the council made its mid-biennial adjustment late last year.
As adopted, the city expected to spend $585,075 of its fund balance to cover the gap between expenditures and revenues. Now, the city is predicting using $580,401.
The city is projecting an ending fund balance of $4,571,275.
Revenues in the city are still projected to be lower than the adjusted amount by more than $330,000.
According to Juarez, property tax revenue, sales tax revenue and utility tax revenue are all expected to come in below projections.
Juarez said the expected drop of nearly $200,000 in property tax revenue is due to people taking a penalty and deferring payments instead of paying on time.
“People are willing to make that sacrifice,” he said, noting the city should eventually get all of that money, it is just a question of when.
As for utility tax revenues coming in low, Juarez said he thought that had to do with the cool summer resulting in less water usage, as well as less power usage from air conditioners and other devices. In total, the city is expecting a drop of about $85,000.
Other revenue sources have shown a surprising resiliency. Building permits in the city are up more than 147 percent through July, with 536 permits issued compared to 338 last year in a similar time. Juarez noted no permits were issued in July. He said that might be explained by the ending of government incentives, meaning anyone looking for a house bought one before the benefit expired.
Also higher than expected are fines and forfeitures. Juarez projects the city will collect about $43,000 more than expected. According to City Administrator Don Morrison, that can be attributed to the philosophical differences between city judges. Judge Doug Haake, who presided over the city last year, leveled lower fines than those imposed by Judges Jim Helbling and Ron Heslop, who presided over the city in 2010.
On the expenditure side, Juarez is predicting departments will save about $100,000 more than earlier projections. On top of that, a debt service payment of $231,000 for the police department’s transition to an 800mHz radio system was projected to come out of the general fund, but drug seizure revenues are now projected to cover that expense.
Cost-saving measures such as furloughs and a change in medical plans will also result in a savings for the city.
In all, Juarez said though times are tough, Bonney Lake is in a pretty good position, all things considered.
“The city of Bonney Lake is in better financial condition than probably 70 percent of the cities that are out there,” Juarez said.
