City staff have proposed a 4-percent water and 3-percent sewer rate increase and a 1-percent property tax levy increase.
The budget also calls for a 3-percent pay increase for non-union employees, who also will be required to pay a 10-percent buy-in to the city’s insurance plan.
The Sequim City Council opens its first public hearing at 6 p.m. Tuesday, Nov. 13, at the Sequim Transit Center, 190 W. Cedar St.
Adding to the issues is a forecast 10-percent decrease in revenue from incoming sales tax next year.
Declining sales tax looks to be the new norm, says Sequim City Manager Steve Burkett.
During the past year, the city’s sales tax has consistently come in below the projected budget, leading city staff to reduce expectations even further for 2013.
General fund revenues are down about $269,000 or 3.2 percent from last year but department heads were asked to reduce expenses by 5 percent with a total cut of about 4.8 percent or $396,000.
Sales tax for 2010 and 2011 came in at about $2.3 million each year, whereas the tax so far this year is at about $1.8 million with $2.15 million expected as the total by year’s end.
Burkett feels the numbers reflect the economy as a whole.
“That’s the reality of sales taxes especially in Clallam County,” he said. “In general people are spending less money.”
Although numbers are down, the city anticipates a $27.2 million budget with a balanced $8 million general fund.
Burkett said the budget jump from last year’s $20.6 million budget is misleading because capital projects change each year and many of those are dependent on grants.
“If we don’t get those grants, we don’t do the projects,” Burkett said.
Some grant-dependent projects include a Fir Street/Sequim Avenue traffic signal and infrastructure improvements at either West Sequim Bay Road or the Burrows property near U.S. Highway 101.
Civic Center project
The city’s largest capital project is its combined city hall/police station.
With a combined estimated cost between $13-$14 million, the city is putting out requests for firms to help plan and manage the project, with a decision to be made in December.
Burkett said the project will have a fixed price through its bid/design process and that any extraneous costs, such as an increased cost in materials, would go to the contractor.
A proposed design could be before the city council by the end of 2013, with construction beginning sometime in 2014.
The city plans to pay for the police station portion by using the recently approved public safety sales tax of one-tenth of 1 percent funds to pay off a low-interest, long-term bond. Funds previously used for rental space and other means, such as raising the water/sewer rates, are slated for the larger civic center project.
This year, sewer and water rates went up 2 percent. Sewer rates went up by about $1.06 for low amount users and $1.22 for high usage per monthly bill; water went up about 54 cents per month.
The new proposed changes with sewer would increase users’ bills by $1.61 for low use per month and $1.87 per month for high use. With water, single-family users’ bills would increase by about $1.09 a month.
Burkett said this year’s increase should help pay for the new city hall’s water and sewer infrastructure, alleviate increasing costs of electricity and chemicals the city uses for these utilities and help retire the debt remaining on the water treatment plant’s upgrade.
“We’re competitive with other cities and like other cities, we’re going to have to look at other increases like this in the future,” he said.
City ratepayers pay less than Port Angeles residents for sewer and water but more than Port Townsend residents.
Utility discounts will continue, with applications at City Hall.
This year’s budget also includes $50,000 for a proposed 3-percent salary increase for 21 non-union employees based on performance.
Burkett, a non-union employee, said the increase helps alleviate a number of costs non-union employees have taken on, including a proposed 10-percent buy-in to the Association of Washington Cities’ health insurance.
They currently don’t pay anything to receive insurance and their buy-in would generate about $30,000 for the city.
Non-union employees such as department heads didn’t receive a pay increase this year but did receive a pay increase in 2011 based on performance and a compensation study to make positions more competitive with other cities.
Staff received increases from 0.5 percent to 5 percent totaling about $17,500.
Burkett said the 2013 pay increase would help balance this year’s loss of reimbursement for sick leave when an employee retires and the elimination of longevity increases (which used to be awarded employees every five years).
For the budget, staff planned not to replace a retiring mechanic position, which has led the city’s overall salaries budget not to increase for the first time in several years.
“We’re learning to live with less money like a lot of other folks had to do,” Burkett said.
“We’re a lot better off than other cities, though. The city looks to have about $1.5 million in reserves by the end of the year.”
Next year’s budget does not call for dipping into reserves.