Former Mountlake Terrace City Manager John Caulfield used his final address to members of the City Council, a six-year financial forecast report, to highlight a city budget that has stayed in the black over the past four years and will continue to operate with slight surpluses through 2018, if forecasted revenue is realized.
Caulfield presented the 2013-2018 City of Mountlake Terrace Six-Year Financial Forecast Report to the council on Aug. 29.
“You continue to have a balanced operating budget,” Caulfield told the council. “You are following your sound financial policies; for example, you are not using one-time funds for ongoing operations. You have also put in place a wide range of actions, strategies and long-range procedures that continue to work and mitigate some of the challenges that we have had to deal with.”
Ending with only a $6,202 general operating budget surplus, the city just barely avoided a year-end budget deficit in 2012. The forecast for 2013 is a surplus of $452,895, with six-figure surpluses projected to continue each year through 2018.
“The city continues to hold its own financially and operationally in spite of the economic challenges you see,” Caulfield said. “The discipline the city had maintained in staying within our means is the primary reason that we have not had to make the kind of severe service level reductions other governments have had to endure.”
Caulfield called Mountlake Terrace “a full-service city” as it operates its own police department, recreation and parks department, public works department, and water, sewer and storm water utilities, while contracting out for library services and fire and EMS protection.
Within its own operations, the city is not only providing better levels of service than it did just a few years ago, but is doing so with fewer employees, resulting in a smaller overall general operating budget, Caulfield explained.
“Prior to 2009, we actually had about 170 full-time equivalents, which equated to about 300 bodies. We’re down to about 280. That’s because of the economics of the world that we live in today. But even though we’re a leaner organization, we’re actually a more productive organization than we were just three or four years ago,” Caulfield said.
City of Mountlake Terrace general government expenditures for 2012 totaled $16.9 million, down from yearly expenditures in 2006, 2008 and 2010 that topped $17 million.
Yearly expenses for the city are projected to rise in 2014, with next year’s projected spending totaling $18.1 million and climbing to $20.1 million in 2018, “primarily because of personnel and health care costs,” Caulfield stated. Despite the approximately 3-percent annual increases in spending, Caulfield is confident the city’s budget will stay in the black as revenues are projected to go up 3.1 percent annually.
“As the forecast shows, we will be able to maintain a positive operating surplus,” he concluded. “Our residents and businesses can look to the city with confidence to provide their infrastructure and a wide range of services that they have come to expect and desire.”
The city is forecasting increases in all revenue sources during the next six years, including its share of property, sales, utility, gambling and admission tax collections, in addition to money collected from license, permit, services and recreation fees.
Critics point out that property tax collections in Mountlake Terrace have gone down each of the past four years as assessed values have tumbled in the city. The total assessed value of private property in Mountlake Terrace was $1.67 billion in 2013, down from a high of $2.4 billion in 2009. Caulfield believes that trend will change beginning next year.
“We understand that in the beginning of 2014, the latest numbers we got about a month ago — which is still very preliminary — that they’re projecting about 7 to 7 1/2 percent growth in assessed value,” he said.
And while sales tax collections in the city are projected to rise 2.5 percent annually and the general economy is showing signs of life, Caulfield warned that the economy still isn’t perking at a rate it should be.
“Regionally and nationally, there have been some bright spots, particularly as we look out into the future. However, challenges do continue to exist and, quite frankly, we are not seeing the recovery that we want to see either at the local level, state level and national level,” he explained. “Economic growth, while again showing some positive signs, continues to struggle, particularly when compared to other post-recession recoveries.”
You can view the entire City of Mountlake Terrace Six-Year Financial Forecast 2013-2018 here.
— By Doug Petrowski