The Mercer Island City Council suspended the requirement of a second reading for an ordinance to adopt Ordinance 19-08, amending the 2019-2020 budget after staff presented the 2018 financial status report.
Mercer Island’s finance director and assistant city manager Chip Corder presented the 2018 budget report and adjustments to the 2019 budget at the May 7 city council meeting. Most of the budget adjustments had been previously approved and not formerly adopted while the only new requests are $18,461 from a recreational boating safety federal financial assistance grant for police and $15,000 from an EMS rate study carryover.
“I just wanted to add my thanks to you and your staff for all the work you do over time,” Councilmember Bruce Bassett said at the May 7 meeting. “There’s obviously been a lot of public scrutiny around budget, and a lot of work that staff and council and public are doing around what the future looks like.”
Corder presented the report four hours into the meeting and highlighted the 2018 general fund budget and how it compared to the city’s actual spending throughout the year. The report excluded the budgeted beginning fund balance and any one-time inter-fund transfers into the general fund during the year.
According to the report, the city’s revenue was higher than what was budgeted by $344,000 due to one-time reimbursements and refunds from the department of labor. Corder pointed our that if the one-time funds are factored out, the city’s revenue ends 2018 slightly below the budget.
On the expenditure side, the city ended 2018 with a 2.4 percent savings at $748,268 less in expenditures than what was budgeted for 2018. Corder said the typical average for Mercer Island is 1-1.5 percent while other cities on the Eastside hit 3 percent.
“In looking at this, it looks to me like you nailed your budget,” Corder said. “The differences are small and easily identifiable as things that were completely outside your ability to know going in. It should give us and the public great confidence that the work you’re doing is solid.”
Similarly to how the recent school counselor positions were restored, the expenditure savings were primarily due to position vacancies throughout city departments that were left vacant and eventually cut in the 2019 budget. Corder added the city also saw significant contracted services savings strongly related to community planning and development. Essentially the city narrowed the scope of projects that were budgeted in 2016 to cut costs.
“My point is on the revenue side and the expenditure side,” Corder said to the council. “This is all one time, this isn’t ongoing stuff, but it adds up to a big chunk of money.”
In total, the city of Mercer Island ended 2018 with a $1.4 million surplus.
“I think there is going to be discussion in the community that the $1.4 million surplus is something to be ashamed of. It was really [because of] the city staff who looked for belt-tightening opportunities,” Deputy Mayor Salim Nice said at the meeting. “Somebody put their head down, read through some fine print, checked some math and was aggressive in seeking reimbursement for overpayments. That type of behavior is what we should encourage and not discourage… This is what we need to fix the general fund, [it] is this type of behavior. I want to thank all city staff who have looked for these cost saving opportunities.”