Mayor
Dennis L. Kendall's
2006 Preliminary Budget Message
Date: Nov. 4, 2005
To: Citizens of Marysville and City Councilmembers
From: Mayor Dennis L. Kendall
It is my privilege to present to you the City of
Marysville preliminary budget
for 2006.
The proposed 2006 budget is $95.1 million, with a projected
General Fund of $19.5 million, representing an increase of about 11% percent
over 2005 spending levels. The General Fund is the financial source for delivery
of vital community services including public safety and emergency dispatch,
municipal court services, parks and recreation activities, community
development, engineering and many other quality services. The largest portion of
the overall budget includes key capital investment projects, including $38.8
million for the city’s road and utility infrastructure, which have been planned
for in the long term.
In February of 2005 the City annexed the
Lakewood area increasing
population and the need for services. To meet the needs of this new community
the council approved the hiring of six positions for the departments of
Community Development, Police, and Street Division in Public Works. This
spending plan proposes the hiring of 6.5 FTEs, including new positions in Public
Works, Police and City Hall. This budget anticipates no layoffs.
Marysville must move forward with our commitment to economic
development as the means to build a strong, diverse tax base, a healthy local
economy, and a vibrant center for business, employment and tourism. We can not
count on property and sales taxes, and other limited revenues to carry the
weight for funding quality services our citizens expect and deserve.
Marysville has the best people and economic development
resources working together to promote the “economy of opportunity” now within
our reach, and our investment in economic development is already beginning to
pay off. A flurry of activity and renewed interest within the retail commercial
market provides a sign that Marysville is an exceptional place to do business.
As thrilled as we are to see this interest, the purposed revenue from sales
taxes is not considered in the 2006 Budget. The 2006 Budget remains conservative
and cautionary; consideration of proposed sales tax revenue before permits are
approved and construction begins would be getting ahead of ourselves, and not in
the interest of taxpayers.
Here are some additional highlights featured in the proposed
budget:
·
Union agreements
are currently under negotiation, leaving benefit costs in uncertainty.
·
Employee health
benefit rates will increase by 12%, a reduced impact compared with recent year
city budgets that ranged from 19%-22%.
·
6.5 positions are
being proposed, with recommended start dates in July.
·
$80,000 earmarked
for economic development, with spending to be determined by the Chief
Administrative Officer and authorized by the City Council.
·
Recommendation to
move forward with a 2% rate adjustment for water and sewer in 2006, as permitted
under city ordinance. Storm water will finish its code established incremental
increase in 2006.
·
A cumulative
reserve fund of $1.5 million, with the caveat that the Council pledged up to
$400,000 toward the 172nd Street NE freeway overpass widening project in north
Marysville, receipts which did not come due in 2005, but are probable in 2006.
GENERAL FUND
Property Taxes
The 2006 preliminary budget assumes no increase in regular
property taxes. In September, voters passed the
EMS levy restoring the rate to
$.50 per $1,000 of assessed property value. The 2005 budget year will be the
first year of an annual revaluation by the Snohomish County Assessor’s Office.
The annexations and new construction will result in an estimated 7% increase in
property taxes received by the city. The city has averaged a minimum of 3% in
recent years stemming from new construction; in 2005.
Sales Tax
The 2006 spending plan estimates a 25% increase in sales tax.
Tax collections for fiscal year 2005 indicate that spending is up. Approximately
half of the increase is due to retail as well as residential and commercial
construction activity. The rise is further an indication that the regional and
national economy continues to recover from the recession.
Business Tax
The proposed 2006 budget assumes a minimal increase in
business tax, based largely on higher collections on telephone, electricity and
natural gas sales. The city imposes a 5% utility tax on these utilities, which
imposed rate increases to customers in 2005, which in turn generated more
utility tax revenues for the city than anticipated.
Charges for Services
The City Council in September 2004 approved rate increases
for water, sewer and storm water utilities, which took effect in January 2005.
These fee increases are necessary to meet an estimated $30 million in capital
projects necessary to meet more stringent state and federal standards, ongoing
maintenance and operations, and debt repayment on utility revenue bonds sold in
2004. To continue to meet debt repayment and plan for the future the council
established an annual 2% increase for water and sewer rates.
Special Revenue Funds
The Street Fund is adjusting to two past anti-tax initiatives
that have resulted in $400,000 less being allocated, including Initiative 695,
which eliminated the $15 vehicle license fee. The Street Fund accounts for
maintenance and operation of all transportation routes, and costs related to
preparing streets for overlay and maintenance. Past and current reductions in
personnel have allowed the Fund to remain intact, but not at the level desirable
to meet the needs of citizens.
Recent street comprehensive
studies indicate that more than $1 million is needed annually to maintain our
streets. The other special revenue funds continue to have limited expenses to
anticipated revenue and one time purchases. The Growth Management Act (GMA) Real
Estate Excise Tax (REET) 1 and REET II have experienced increases in 2005. In
the past, GMA funds have been used to fund street and park capital project at a
50/50 level, with the completion of the
Waterfront
Park the percent split will shift away from Parks to Street to assist in the
second phase of the State Avenue improvements extending from 116th to
136th.
Debt Service Funds
The debt service fund shows change only for the continued
funding of existing debt. This fund includes general tax commitment. Debt
service for enterprise funds such as water, sewer, garbage and Cedarcrest Golf
Course reside within that grouping.
Construction Funds
Construction Funds currently include Streets and Parks, as
mentioned above REET in 2006 will be shifted away from Park to Streets.
Enterprise
Funds
The Water/Sewer/Surface Water Fund continue to complete large
construction projects to meet growth and maintenance needs. Completion of the
WWTP expansion project in 2004 requires the need to add a position that is being
proposed in 2006. The Garbage and Refuse Fund continues to fund the successful
multi-family recycling program and city-provided garbage toters. No rate
increases are proposed for the Garbage and Refuse Fund. The Golf Course has been
going through a review by a citizens committee to help cover debt used to
renovate the course and construct the restaurant and pro-shop.
Internal Service Funds
The City currently has three internal service functions –
Fleet (vehicles, equipment, etc.), Facilities, and Computer Services. All three
are structured to ensure that these services continue to function necessary to
keep the City operating. The goal is to stabilize the impacts of large repairs
and replacements by providing a stabilized funding mechanism at minimal cost.
Labor and Health Benefits
The city’s union employees are represented by one of three
separate labor unions; one contract expired at the end of 2004. The remaining
two contracts expire at the end of 2005. Another factor that has had a large
impact on the budget is employee health insurance. Over the past few years, the
city has experienced double-digit increases in health care costs, ranging from
19% to 23%. After expecting another year of the same, we are surprised and
pleased to announce that rates have come in at 12%. Increased health benefits
are a statewide and national trend impacting both the public and private sector.
Signs for Optimism
As we prepare to move into 2006, Marysville citizens should
not overlook the successes that have set us apart as a “can do” community. Many
public investments were completed that have transformed out community and
enriched our lifestyle for the better. For example:
Ebey Waterfront Park with its motorized boat launch access
at First Street and State Avenue was completed in September 2005, a vital piece
in our commitment to create a more pedestrian-friendly downtown. The park will
eventually incorporate a trail system extending along Ebey into the Snohomish
River Estuary.
The deep water outfall project and waste water treatment
plant upgrade were completed in June 2005. The projects are required as a result
of stricter state and federal environmental regulation and to establish capacity
for the sewer system to 2020.
Strawberry Fields Athletic Complex in north Marysville
celebrated its grand opening in May 2005. The new 72-acre regional athletic
complex features three lighted full-size soccer fields, restrooms, parking, and
trails and picnic areas in a natural open space setting abutting the Quilceda
Creek system.
The City Council adopted Marysville’s 10-year update to the
Comprehensive Land Use Plan, Critical Areas Ordinance (CAO)
and development regulations. The comp plan, required by the state Growth
Management Act, is a master blueprint that city leaders will use as good
stewards to responsibly guide the city’s future as it continues to grow, for the
betterment of people and the environment.
Construction is complete on the first of four ponds in the
North Marysville Regional Detention System, and last has been purchased for the
second pond, which completion anticipated in Spring 2006. The ponds are being
funded upfront by the city, with costs to be recovered from future commercial
occupants as they locate in the city’s north end.
SUMMARY
I commend the
Councilmembers, department heads and staff for the hours of hard work, thought
and commitment they have invested during the budgeting process. This budget
serves as both a tool and planning guide that sets reasonable priorities to meet
the increasing demands for resources. At every step, we approached this budget
with our citizens’ needs in mind.
As Mayor, my
foremost goal is to forge lasting partnerships and build a collaborative
atmosphere as a means toward achieving a thriving, prosperous community for
which we can all be proud at the end of the day. The teamwork that went into
developing this proposed budget is an example of that collaboration. But it
still lacks the input of an essential party – you, the Citizens. I invite you to
become a part of the budget process by joining us for a public hearing to share
your input on the preliminary budget scheduled for 7 p.m. Monday, Nov. 28, in
the Council Chambers in City Hall, 1049 State Ave.
Marysville aspires
to be a place where our younger generations have opportunities to live and work
in the community where they grew up. Citizens should be able to feel safe,
valued and recognized for their contributions to the character and social fiber
that make our community the family-friendly place it is. I am optimistic about
our future. Responsive government and economic development will help to shape
the quality of life we have all come to enjoy, and endeavor to preserve.
Respectfully,
Dennis L. Kendall
|
