On Monday evening, the City Council was expected to approve a new city budget for the coming two years of $112 million The vote was set to take place after Reporter deadline.
Similar to most government agencies working to balance a budget in hard economic times, the city looked to a combination of cuts along with new revenue sources to balance the books.
The city’s finance staff proposed that the Council enact changes to collect additional dollars through increases in four areas. They are:
1. Increasing property taxes by one percent; 2. Increasing utility rates paid on water, sewer and stormwater management, including Emergency Management Services (Note that this is the transport fee approved by the City Council earlier this year that is collected from insurance companies). 3. Increased taxes on utility use. And, finally, increases in room rental rates at the Mercer Island Community and Event Center and some building permit fees.
The city has steadily reduced its spending. By 2011 the city had cut or left vacant five regular full-time workers and five contract employees. Those spots will remain vacant at least for the next two years.
In 2009 and 2010, the city spent 5 and 8 percent less than was budgeted in the General Fund for those years — but those budgets were set higher than the previous years by 6 and 5 percent, respectively in part to allow for some inflation. City staff indicates that during that period, there was a “greater than anticipated drop in tax revenues.” As such, they “underspent” the city budget by $1.8 million in 2009 and $1.99 million the following year.
In 2011, the city spent nearly 2 percent less than was budgeted for the general fund that year. The 2011 budget amount had already been reduced by more than 7 percent from what was set in 2010. For 2012, the city expects to again come under budget by 2.5 percent.
Over the next two years, Islanders with a home assessed at $700,000 will see their tax bill increase by $17.22 in 2013, with another $6.22 on top for 2014.
With these increases the city expects to bring in $1.9 million of additional revenue in 2013. More than half or $662,000 is for the new South end firehouse and rescue truck via the levy approved by voters in November.
The $1.9 million in 2013 includes a one percent tax increase on property that is expected to bring in $106,000 — an amount that represents, on average, an additional 78 cents for each household.
Utility taxes (applied on the usage of water, sewer, sewage treatment, storm water management and Emergency Medical Services) will also change, and will yield $425,000 — adding about $4.20 per household.
Utility rates will also be higher and are expected to bring in $732,000 in 2013. — an average increase of $7.11 per household..
What the city terms ‘enhanced fees’ for community room rentals at the MICEC and building permit processing will bring in $21,000 in 2013.
In 2014, taxes per household will grow again with another increase of one percent on property, or another 78 cents on the average bill for a $700,000 home. Taxes on utilities will rise slightly in 2014, adding $1.89 on an average Mercer Island bill. Utility rates will go up by $3.55 per household on average. The levy amount for the firehouse and rescue truck will remain in place.
The city expects to collect another $676,000 in 2014 for a total of $2.6 million from new fees and tax changes.
On Monday, the Council was also to discuss whether city staff should be directed to assist True Value Hardware to find a new location. The property leased by True Value is planned for redevelopment, requiring the store to find a new location or cease operations.
The owner and developer of that property are planning to redevelop the site with a new multistory commercial and residential building. Formal permit applications have not yet been submitted, but a preliminary proposal was presented to the Design Commission for discussion in August.
The developer has been working with city staff to understand city requirements and possible development scenarios. The developer hopes to begin construction in the summer of 2013.
The owner and developer of True Value’s current site are working with the hardware store owners to find an alternative location. These efforts continue, but have not yet yielded a new location forthe store. .
The city does not currently have a formal, funded economic development function. The city has not engaged in efforts to relocate Island businesses displaced by new development.
Find out more
To learn more about the city’s budget and planning, visit the city’s website at www.mercergov.org. Go to the City Council page and look for the agendas and minutes. Council meetings can be seen on line or in real time on Channel 21.