Sequim might have more new construction than thought

The city had more new construction in 2008 than originally estimated but the increase will make only about $60,000 difference in the 2009 budget, administrative services director Karen Goschen told the city council at its Nov. 10 meeting.

A second public hearing on the proposed 2009 property tax levy and 2009 budget is set for

6 p.m. Nov. 24 at the Sequim Transit Center, 190 W. Cedar St.

The city's $7.56 million general fund, down from $8.1 million in 2008, includes virtually everything associated with city government (except utilities) including the city manager and council, city attorney, police, planning and public works, building inspections and parks.

The remainder of the $20 million 2009 preliminary budget includes special revenue funds such as streets, hotel/motel tax and criminal justice, capital funds, water and sewer and trust funds.

The city will have the equivalent of 78.25 full-time employees in 2009, down from 79.15 full-time positions in 2008.

Goschen said the 2009 budget assumed $26 million in new construction but the county says there's been $46 million in new construction which means another $50,000 to $60,000 for the general fund plus the $11,500 from the 1 percent increase in property tax collections allowed by Initiative 747.

I-747 was approved by the state's voters in November 2001 by a 57 percent "yes" vote. It limits a city's or county's increase in property tax collections to 1 percent of the previous year's collections plus new construction.

The council has some discretion to increase the city's utility taxes because some of them don't have statutory limits, Goschen said.

But the 2009 budget assumes no tax increases although it does include water and sewer rate increases, she said.

Sequim's water customers will see a 3.5-percent increase in their monthly water bills in 2009 and sewer customers will see a 15-percent monthly increase.

The rate increases will bring monthly water bills to $25.85 in 2009 and monthly sewer bills to $45.06 next year.

Property and sales taxes are the city's two biggest revenue sources along with water and sewer rates, Goschen said.

Property and sales taxes fund the city's general fund while its sewer and water utilities are funded by the monthly sewer and water rates.

Goschen said the additional sales tax money the city has received from its newly enlarged retail bases was used to fund capital projects.

Most of the increased property tax revenue is due to new construction because of the limitations imposed by Initiative 747, she said.

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