The numbers are out and the City of Sequim looks to take on a big budget next year worth $55.4 million.
This includes a possible 4 percent utilities rate increase.
Doubled from this year’s budget, Elray Konkel, city administrative services director, said the substantial budget increase is misleading and comes from transfers for the city’s new city hall and police station costing the city about $15 million.
So the city’s operating budget for 2014-15 is estimated at $15.8 million with a capital budget of $18.6 million and transfers worth $21 million.
“We funded (the civic center) this year and as an accounting requirement it’s being recorded twice,” Konkel said.
“We can’t as an agency transfer a fund without authorization, so there’s your duplication. The budget will go down a little bit in 2014-2015 and should be back to normal the following year.”
Sequim looks to pay for the civic center with about $10.4 million in bonds and about $5 million from savings. Konkel said the total amount includes the $1.25 million purchase and studies on the new property and other properties nearby.
The city looks to repay the loans over 30 years for $660,000 a year with the voter-approved public safety tax at an estimated $225,000 a year, Real Estate Excise Tax for $75,000, savings from current rentals $200,000 and the city’s general fund at $160,000.
City Manager Steve Burkett said going forward with the civic center remains one of citizens’ biggest complaints.
He said people feel there remain plenty of vacant buildings in the city and that the current buildings suffice. But he said the 40-year-old city hall serviced a community of about 2,000 people in 1974 in a city valuation of $10 million whereas the city nears 7,000 people and $889 million in value today.
Konkel said the civic center was approved by the voters and will be paid for partially through the public safety tax to help build the police station portion.
“We told them that’s what this is for,” he said. “We can’t take this $15 million and spend it on streets. Most of the costs through it are from existing costs and the public safety tax.”
Sequim City Councilors see a presentation from three design-build teams competing for the civic center build on Dec. 2. Burkett said he anticipates councilors voting for a team on Dec. 9.
Included with this budget is a proposed 4 percent sewer and water increase.
Konkel said a recent rate study showed the utilities needed the increase for maintenance and projects.
Much of the city’s major water capital projects include increasing piping size and flow worth $3.1 million total. Many of the city’s sewer projects repair or replace lines and services worth about $2.1 million. Both these totals include water and sewer services to the new civic center.
“Nobody likes to pay more,” Burkett said. “But we want to maintain our quality of service and replace infrastructure. We also want to know how we compare to other cities. We pay less than Port Angeles for example and that’s the important thing to us. What would it cost us in another city.”
City Councilors Laura Dubois, Mayor Ken Hays and Genaveve Starr are looking at rates as a committee to see if raising rates differently is possible for council to consider.
“In a perfect system people pay for what they use,” Burkett said,”But some people are paying more and some less (for utilities).”
If rates were increased at 4 percent universally, it’d cost the average resident $1.09 more for water and $2.21 more for sewer per month.
“It’s important to seek fairness and level that, Konkel said.
The city plans to continue a low income discount for those who qualify.
Konkel said 20 to 30 families apply for the discount, and costs the city between $25,000-$30,000 a year.
Applicants must provide proof of assets and income,” Konkel said, and represent some of the lowest income people in the city.
Last year, city councilors approved water rates going up by 4 percent and sewer 3 percent.
Sales tax slightly up
By year’s end, Konkel estimates the city’s sales tax revenue to be up by about 4% from last year’s estimates (about $2.2 million). In 2014, they’ve estimated $2.3 million in revenue, or another 4% increase.
“But who knows?” Burkett asked. “We think it’s conservative.”
The retail trade remains Sequim’s biggest money maker with $1.5 million estimated in taxes by year’s end but the city’s crux remains construction costs.
“It’s been as much as $600,000 but we’ll be lucky to be at $150,000 in sales tax construction by the end of the year,” Konkel said.
In 2012, the city received just under $140,000 in taxes from construction.
For next year, the city’s general fund revenues are up 3-percent ($8.5 million) and expenditures up 2.3-percent ($8.4 million).
Aside from the civic center project, Konkel said the city’s budget is status quo.
“It’s a pretty flat budget,” he said.
Last year, all of the departments were asked to reduce their operating budgets aside from salaries and benefits for a total of 5%, but remain even next year.
In the police department, Konkel said its budget is going up about $72,000 (from $2,602,000 to $2,679,000) but only because of a $90,000 equipment fund transfer.
“That’s about as flat as you can be,” Konkel said.
Salaries in 2014 are just over $5 million, up 2.2% and benefits are up 6.8% to just over $2 million.
Sequim’s 74.79 employees account for 47% of operating expenses and 64% of total expenses.
Burkett said these increases come from health care and retirement, PERS, increases mandated statewide.
Police contracts go through 2015 and non-uniformed union staff contracts expire at the end of 2014.
Next year’s labor contracts didn’t allow for a cost of living increase but do allow for movement in existing step ranges depending on supervisors’ performance reviews.
Konkel said they did a salaries survey and found staff wages are comparable to other cities except for two positions’ ranges, city engineer and police deputy chief, that were 5% below market average. So those were adjusted for 2014 but this only applies if these individuals receive step increases from supervisors.
The city also continues its partnership with the Visitor’s Center for a $72,400 contract, up $900 from this year, while continuing contracts with the Clallam County Economic Development Council ($5,000) and several non-profit agencies splitting $75,000. The EDC requested an additional $5,000 this year.