City finance reports shows positives in general fund revenue, slight drop in costs

City of MLT logoMountlake Terrace City Manager John Caulfield presented the 2013 second quarter financial report and performance measures to the City Council at its Aug.19 meeting.

While city general fund revenue lagged slightly behind expectations for the first six months of 2013, expenditures were less than what had been budgeted, leaving the general fund operating balance with almost a $200,000 surplus. “We’re more than making up the revenue shortfall by not spending those dollars,” Caulfield said.

Caulfield said the city has continued to effectively manage its financial resources due to its balanced budget, six-year financial forecast, sound financial policies and the implementation of action strategies and preventatives measures to ensure the city lives within its means.

Although there are indications that the economy is recovering on a national level, Caulfield noted that local government revenue still lags behind and it could take a decade or more for revenue collections to return to 2006-2007 levels.

One bright spot in the city’s revenue report was an increase in sales tax collections during the second quarter of the year. The city collected $920,444 in sales taxes in April — June, 2013, in effect matching the second quarter total from pre-recession 2007 and climbing from a 2009 low of $773,514 tax total. “This is a bit of a positive,” Caulfield proclaimed.

Other second quarter highlights included the city’s Economic Development strategy moving forward, several grant awards received, financial prudence practiced by departments, continued community outreach, and 24 major public infrastructure projects currently underway, Caulfield said.

“We continue to meet our objectives due to clear direction from the City Council and commitment to our financial policies,” Caulfield said.

You can view the entire City of Mountlake Terrace 2nd Quarter 2013 Financial Report here.

— By Doug Petrowski


  1. When you read the complete article, don’t forget to download .pdf that is the complete and total report…and for those of you who respond to visuals, it is not a dry, page by page report, but easily read visuals showing multi-year results….Thank you Mr. Caulfield and team

  2. The link doesn’t work for me. Maybe I need to access from a computer. I’m very curious how we saved so much money. Seems to be almost half of what we need to fund the city hall rent.

  3. Our Operating Revenues have only been above $18 million once, in 2006. Despite their own recognition elsewhere that digging out of this prolonged downturn could take until 2018 or later, somehow our Operating Revenues magically start rising – by $2.5 million per year between now and 2018. This is even though revenue growth has been non-existent from 2009-2013 and economic growth is expected to remain anemic by most regional and national prognosticators into the foreseeable future; that is the basis for the city’s own narrative, if not numerical, projections found elsewhere in their 6-year forecast document.

    The point is that if revenue growth is really as slow as their narrative suggests, the Forecast’s numerical magic is just conveniently timed wishful thinking. That, in turn, means that the subject council doesn’t want to discuss, the $2 million bill now due for their 5-year rent gamble is going to be painful for the balance of the city budget. That is to say the balance of the service package which is funded with that revenue stream. If, as I expect, the revenue stream continues weak, there are only two ways forward. Either we spend down the rest of our financial cushion over the next few years or we cut services or some combination of both. Voters deserve to know this – before November.

    Think about it. If paying one additional year of expensive rent is a big enough deal for council to openly wring their hands about it’s impact on our budget, how can the repayment of five years of that same expensive rent not be an even bigger big deal for our budget? Well, an upcoming election season in the face of three straight ballot losses on the same subject suggests that projecting unlikely revenue increases might solve the potential problem at least until after November.

    Lets just play what if for a minute. What if our staff’s capacity for foretelling the financial future is no better than it has been over the last few years in which, as page 6 of the 2nd quarter report shows, we have had a total projection error (shortfall) of $28,070,937?

    At the end of 2011, the projection for 2013 revenue was $18,754,785. One year later, at the end of 2012, that number had been revised downward by over $1 million. What if the reality of 2013 has the same impact on 2014 as the reality of 2012 had on the projections for 2013? And what if that reality cascades through the balance of the new 6-year forecast now being developed by staff? Note that the further in the future they occur, the larger are the projection errors. The bigger numbers in the out years of the current 6-year forecast are much more suspect than the years closer in.

    Does the rosy scenario change? In my mind, none of these are really questions that deserve an introductory IF. They should instead have a WHEN in front of them. I think the WHEN should be before the election, not after. Otherwise the magnitude of the gamble council made with our future in 2009 and the magnitude of their mistakes since then will be hidden from voters. Mr. Davies is right to be curious.

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