[RP TownTalk] budget discussions

[Alice Ewen Walker]

Re: budget questions raised by various folks -

> What are they planning to do with the money anyway?  I guess we'll find out
> at the budget meeting.

On this question, the spreadsheets sent earlier by Mayor Archer
provide info. Margin notes indicate the staffing composition, which
accounts for our biggest costs. Capital costs such as vehicle purchase
are listed in the separate special assessments page.

A significant amount of the cost increases come from actions approved
by the council over the last year. These commitments include:
- Approving salary scales, grades, and steps for staff positions. This
included redefining some jobs, as well as passage of a living wage
policy that eliminates paying minimum wage to any town worker.
- Approving new stipends for mayor and council.
- Approving a 20 year 5.4% loan to finance road and sidewalk improvements.
- Approving a 20 year 5.4% loan to finance building improvements to
town hall and to create a community center, to be built in the future.
- Approving purchase of 5 new police cruisers, 2 new SUVs, and a
bucket truck purchased in the 06/07 fiscal year.

On top of these committed items, there are cost increases next year
that the town can't control much - things like rising benefits costs
and workman's comp premiums that outpace inflation.

Not to say that there aren't things that could be cut, just noting
that much of the proposed spending does not appear to be from newly
minted initiatives.  To cut costs probably does require staff
reductions since that's our biggest expense. We could also shave a
small bit off by reducing some of the capital purchases.

A rough rule of thumb is that each penny of the rate = 41K in the
operating budget. So, to drop from the .68 proposed to .64 would
require $165K in cost cutting. Or, if you took 1 cent off the capital
purchases, then you'd need to find $123K in cuts out of operating,
etc.

Earlier, Bruce asked about tapping savings. Here's my understanding: The town
has about $1 million in savings. The budget proposes spending $116K
out of savings next year.

One logistical factor to consider - the town does not receive its
revenue in steady increments. The savings provides a cash flow cushion
that the town borrows from and repays to itself. This is helpful
between July and October, when the property assessments come in. In
several previous years, the town has had to pay for bridge loans to
cover this gap because there was not sufficient cash flow.

It might be a reasonable approach to tap a greater share of savings
and pay on a bridge loan in the short term to avoid fluctuations to
resident taxes, on the assumption that a big boom is on the horizon
with M-square. This has some risk though, if development is stalled or
if plans change for the property.

Property taxes last year accounted for $2 million of the $3.7 million
budget. A rough estimate is that 700K of the property tax revenue last
year came from homeowners - the rest came from commercial properties
and apartment buildings.

Mount Rainier is instituting a $10,000 fund in its budget to provide
town tax rebates to residents that qualify for the state's property
tax assistance.  Perhaps we can create something similar to assist
qualifying homeowners in our town.

I agree the town needs to cultivate business investment. Our staff
position for economic development has not been filled for 8 months,
which results in saving money but doesn't help accomplish our goal of
getting more commercial revenue stream in the town. Leaving that
particular position unfilled in the next term would be unfortunate.
How do you market the town, advance our business case, and cultivate
developers and business people without a person to do that task? It
really can't be an all-volunteer function - it's too large a load to
carry.

I don't have all the answers, but I am confident that working with the
other members of the incoming council, we will all do our best to
represent residents' interests in June as we set the tax rate and
adopt the budget.

- Alice


Alice Ewen Walker