Edmonds resident Harry Gatjens is providing regular reports to My Edmonds News on the workings of the 2010 Citizens Levy Committee. You can also read his story chronicling his recent quest for the vacant Edmonds City Council seat here.

July 28: Meeting One

The City Council of Edmonds has established a citizens committee to look at how, when and whether a levy should be put before Edmonds residents. The levy idea is a result of the national economic downturn, which leaves our city — like nearly every city — with less income to pay its expenses. The job of the committee is to study the situation and make one or more recommendations to the City Council. To do this, we meet twice monthly.

The first meeting was held this past Thursday at the Brackett Room at City Hall. There are eight members: Jesse Beyer, John Carlin, Barbara Chase, myself, Darrol Haug, John Reed, Bill Vance and Evelyn Wellington. All members were there except John Carlin, who was out of town. We started off with introductions and brief synopses of who we each are and why we were here. Each of us was appointed by the City Council, and one by the Mayor, but several of us had never met before.

Also at the meeting were Committee Chair Diane Buckshnis and Finance Chair Michael Plunkett, both City Council members, as well as City department managers Stephen Clifton and Debbie Human, and three or four spectators. (It’s a public meeting, so all are welcome.) Council President Steve Bernheim, who had another engagement that evening, stopped by to wish us success.

Ms. Buckshnis had prepared for each of us sizable briefing books, which contained a large amount of background material. We went over what was in the background materials, and several members of the committee had questions that were answered by the two council members and City department managers.

It was explained that our primary purpose is to look at the City’s general fund and the potential need for a levy, then consider the potential of a capital levy after the general fund analysis is complete. We aren’t to consider other City funds (such as Cemetery Improvement Fund, Building Maintenance Fund or Equipment Rental Fund), as they are beyond the scope of our charge.

However, it was pointed out that several of these other funds could affect the general fund if their specific revenues may not cover their intended purposes. An example is the REET 125 fund, which is the Real Estate Excise Tax, a portion of which is dedicated for Capital Acquisitions. For 2010, this fund has expected revenues of $560,000 but a debt service obligation of $700,000, or a deficit of $140,000. While the fund currently has a positive $540,000 balance because of past surpluses, that balance could be eaten away in a few years if the revenue and obligations do not change. Once the surplus is used up, the annual deficit would need to be paid out of the general fund. As our committee is trying to look out for the City’s interests over the next five years, these sort of things need to be considered.

There was a semi-heated discussion over how we got into this position. Questions arose such as, “Who was to blame?” and “Was the City mismanaged in the past?” Two things came out of this discussion. First, the purpose of this committee is not to assign blame about the past but rather to find solutions that can work now and in the future. Second, Mr. Clifton pointed out that each year the City begins with a budget that is projected to stay balanced for the year. However, in the last couple of years, the economic downturn and resulting unplanned loss of revenues has squeezed City income below projections and forced the budget out of balance. Hence, deficits result even when a the budget begins as a balanced plan. This is a good reason to be sure that the next budget does not have overly optimistic revenue projections.

Next, questions were asked about what our recommendations might be, and what impact they might have. Do we really have any say as to what happens in the City’s future? Could we recommend a levy to allow for new government services? Could we recommend against a levy and leave the City Council to reduce expenses and live within current revenues? We learned that our recommendations will go to the Council, which has the final say about the City’s financial matters. We are free to make whatever recommendations we choose — the caveat being that we must have solid reasoning behind them.

In my view, the budget is critical to reaching an answer about a levy, because a budget and a levy (or any income) have to work hand-in-hand to be successful. There’s give and take on both sides. However, the budget is not to be reviewed by our committee in any official or quasi-official manner. Even so, our research is likely to produce questions about the budget that will help the City Council to analyze and act on it. The job of the City Council, the Mayor and the City department heads is to write the budget. Our job is to raise topics that might help them manage the City’s finances in the most prudent way.

We ended the meeting with a presentation by committee member Jesse Beyer, who outlined the differences between public-sector accounting and private-sector accounting. For those of us who have mostly private sector accounting and little governmental accounting in our backgrounds, it was an informative overview.

Our charge before the next meeting is to review the information in our briefing books and then come up with a strategy for attacking the issues. The next meeting is scheduled for Aug. 9 at 6 p.m. at the Brackett Room at City Hall. Any Edmonds resident is welcome to come and listen.