By Shawn Hunstock
Finance Director, City of Edmonds
As the City of Edmonds begins to prepare for developing a budget for 2013 — one which could have a deficit of $800,000 to $1 million based on current projections — it might be helpful for Edmonds residents to have a summary of some of the more significant past efforts taken to address the economic downturn and the impact they’ve had on city finances.
Below are some of the items that have been implemented since 2000 in order to successfully achieve balanced budgets through year 2012 despite declining revenues over the past few years.
Expenditure Reduction Efforts
In 2001. the city became part of the Sno-Isle Regional Library system. At the time, this saved approximately $1 million in the city’s budget. In 2003, the city’s budget forecast showed expenditures growing faster than revenue. In order to reduce the overall level of expenditures, 23 positions were eliminated from the budget, saving approximately $1.2 million per year, bringing the City of Edmonds to one of the lowest employee per capita cities in Snohomish County.
The city implemented general overall expenditure reductions in 2008, saving approximately $390,000, and in 2009, saving approximately $2 million. The expenditure reduction effort in 2009 included the elimination of three employee positions in addition to nine furlough days for many of the City’s employees. The City also entered into a contract for fire services with Fire District No. 1. The contract was a way to cut costs initially and control future cost increases for fire services.
In addition to the large cutbacks that have happened in the past, departments are continuously looking for other ways to reduce costs. For instance, many documents, such as the City Council agenda packets, are now produced electronically rather than being printed. The City also changed health care plans beginning in 2011, saving money each year on the City’s health insurance costs. In addition, the City updated its insurance coverages and deductibles to save on the cost of insuring vehicles, equipment and buildings.
Revenue Enhancement Efforts
The Emergency Medical Services property tax levy (voter approved) and EMS transport fees are two recent options enacted by the city to recover a portion of the cost of providing emergency medical services to Edmonds residents and visitors. Changes to utility tax rates have also helped recover some of the cost of providing services to the city’s utilities such as legal, finance, human resources and the clerk’s office, among others.
The Transportation Benefit District (TBD), which began in 2009, now provides a much needed funding source for critical street improvements. The TBD collects $20 per vehicle license fee per year and can only be used for street preservation, maintenance and operations.
Beginning in July 2008, the city benefited from a change in the way sales tax was reported to the Washington State Department of Revenue. Prior to that, sales tax was reported based on the location of the store, warehouse or online business making the sale. After the change, sales tax is now reported based on where delivery of the purchased item takes place. The city still receives credit for sales tax from auto dealerships, for instance, because delivery typically takes place at the dealership location. With a relatively large residential base, the city benefits from sales tax on goods delivered to Edmonds residents. These types of purchases include furniture and appliance deliveries made within the city, and online purchases if the seller collects sales tax.
Ongoing Budget Issues
As mentioned earlier, it is expected for 2013 that the City of Edmonds will have a budget deficit of $800,000-$1 million. This estimated deficit will grow each year, reaching approximately $3 million in 2016. The city will spend a good part of 2012 looking for ways to address the growing deficit. This includes reviewing additional options for expenditure reductions and potential new revenue enhancements. Residents will have opportunities to provide feedback on the budget during public hearings later this year as part of the city’s budgeting process.
Thanks again Shawn for taking the time to communicate with citizens regarding budget and financial issues in the City of Edmonds. I greatly appreciate your commitment to open government.
With the estimated deficit expected to grow each year, reaching approximately $3 million in 2016, I am of the opinion that we need to continue to review all expense categories and reduce expenses wherever possible, as soon as possible.
I am concerned about the short term and long term revenue risks related to the historical LOW interest rates we are currently experiencing. Should interest rates rise in the coming years, both Property Tax Revenue and Sales Tax Revenue could be negatively impacted.
Thanks again Shawn for your hard work and dedication to educating our citizens about the City’s Financial Condition. I look forward to your future articles.
How will tearing up Main Street impact the budget? It seems to me that it is an unnecessary expenditure in the time of belt tightening.
It was reported at the city council meeting of May 15th that this project, affecting Main St. from 5th Ave. to 6th Ave., will have no impact on the budget. The funds will come from already-secured Federal and State grants, and from storm and water utility funding.
Doesn’t it seem wasteful, even if we have secured funding from the State and Federal Government to spend money to tear up a perfectly good street, when both the State and the Federal Government are running deficits?
Couldn’t the money be put to more productive use? As I recall the total was in excess of $800,000.
The cost is $1.6 million. Public Works Director Phil Williams, at the May 15th city council meeting, provided photographs of sidewalks on Main Street between 5th and
6th where sidewalk panels have been raised by the roots of the European Hornbeam trees creating significant trip and safety hazards. The Main Street Improvement Project includes the following:
• 12-foot sidewalks replacing the existing 10-foot sidewalks
• Street lights (16 LED Sternbergs)
• 18 new street trees (14 Bohall Maples and 4 October Glory Maples)
• Mid-block pedestrian crossing (6-inch elevation)
• Relocation of overhead electrical utility service on the south side of Main
• Street pavement reconstruction
• Waterline replacement (1920’s cast iron)
• Stormwater improvements
• Artistic flower poles (4)
• Street furniture (bike rack, solid waste and benches)
I’m all for infrastructure replacement but that seems to be covered by the public utility. Is Main Street that wide that one can take four feet out of it? Does that mean it will be one way or that there will be parking on only one side of the street?
Rich, here is a link that shows a bit of what is planned. It helps answer your traffic question. It just seems to me that if we need to replace a water main that is 1920 vintage that would be the best time to do other improvements to the area by using some grant money (we paid the taxes that support grants) to do the job right. One way to look at grant money is that Edmonds taxpayers pay the taxes that are used for grants so if we have a worth project for the city then lets go get the grant money to be used locally.
https://www.edmondswa.gov/images/COE/Government/Departments/Public_Works/Public_Works_Projects/attachments/project_main_st_improvements.pdf
Darrol, thanks for the link. I agree that we should avail ourselves of grants for worthy projects. I would like to see far less Federal and State control of our destiny. It’s like we have to get in line to maybe get some of our taxes back for our own community.