By Nicholas Johnson
Burien city council had its first glimpse on Monday of a proposed mid-year budget increase made possible by one-time federal funding for the COVID-19 stimulus as well as larger-than-expected revenue from Seattle City Light sales taxes and franchise fees.
“This is not your normal mid-bi,” Rebecca Hodge, financial analyst for the city, told the board during her October 4 meeting. “We are actually taking a pivot to meet the needs of the community and the city due to the stronger-than-expected financial situation.”
For the current year, staff are proposing a 12% increase in General Fund spending of nearly $ 3.6 million. For 2022, additional spending of $ 3.5 million is proposed, which is an 11.6% increase over previously budgeted spending.
âThis is the council’s budget,â said City Manager Brian Wilson. âWe have tried to make this recommendation in line with the priorities established by the board.
âProbably the biggest success is the recommendation to increase the partnership reserve for the city’s capital from $ 7 million to $ 9 million to pay for work related to the planning and construction of a facility. maintenance for the use of public works as well as parks, leisure and cultural services.
Money received through the American Rescue Plan Act (ARPA) could be used to pay for many recommended expenses over the two years, including new hires, network security infrastructure improvements, a risk assessment cybersecurity and contract positions in the city center including a community care coordinator and a mental health professional.
As proposed, around $ 1.7 million of the city’s ARPA funds would be used until 2022, leaving around $ 9 million, all of which must be committed by 2024 and spent by 2026.
Councilor Sofia Aragon said she was curious if and how ARPA funds could be used to improve diversity, equity and inclusion efforts in the city. As currently proposed, some $ 40,000 in non-ARPA one-time funds would pay for the training of a consultant and staff on these topics in 2022.
Largely due to the influx of ARPA funds, the proposed budget shows an increase in revenue of almost $ 7.2 million in 2021 and over $ 6 million in 2022, said chief financial officer Eric Christensen. .
âThe city is in a stronger position than what was initially budgeted for during COVID-19,â he said.
Beyond ARPA in 2021, Seattle City Light’s franchise fees generated some $ 320,000 thanks in part to a board-approved rate increase in 2020, human services recorded nearly 570,000 $ in grant revenue and sales tax revenue are “on course to be the highest year on record.” in the city âto nearly $ 1.16 million.
Nonetheless, the short-term financial risk remains due to the continued spread of COVID-19 and the resulting impacts on business and consumer behavior, Christensen said. On top of that, the city’s financial model remains structurally imbalanced, meaning the rise in spending exceeds limited income, which becomes especially striking once ARPA funds are taken out of the equation.
âThere is a need to reassess the financial situation in 2026,â Christensen said. âWithout spending cuts, revenue increases or a combination of spending cuts and revenue increases, the City must rely on the balance of its funds to compensate for operating deficits.
In response to that same concern, as well as the impact of losing about $ 1 million per year with the expiration of the annexation sales tax credit, city council tied in 2020 increased rental inspection fees to the consumer price index, approved a doubling of business license fees and adopted a 8 percent tax on water and sewer service providers.
At Monday night’s meeting, the board unanimously approved a expansion of the city’s utility tax relief program to include taxpayers for water and sewer services, among others, including those who are indirectly billed for utilities by landlords or others. The changes are generally aimed at making the program more accessible, especially since participation is currently “very, very low” with 75 to 90 households participating each year, according to the director of administrative services, Cathy Schrock.
Looking at the city’s financial position in 2026 and beyond, based on projections to 2030 that assume no change in income or expenditure, the city can expect a deficit of operation of $ 556,000 in 2026, which will increase to $ 2.8 million in 2030, as well as the depletion of the City Hall reserve fund in 2029.
While staff are not recommending measures to increase income or reduce expenses as part of this year’s mid-biennium budget update, they did recognize some options for the board to consider, such as a new one. increase in the tax on public water and sewer services and an increase in the professional tax.
Staff also noted several voter-dependent revenue options, such as a public security sales tax, a property tax levy, a metropolitan park district, and an increase in utility taxes specific to phones, cell phones, electricity and natural gas.
“I think it is clear that we need to work to improve incomes which are not only based on increasing household incomes, but which focus on economic activity,” Councilor Kevin Schilling said, calling increased housing development to strengthen property tax. as well as an increase in commercial activity to fuel sales tax revenue.
âWe need to improve these revenue sources, because they are the two main drivers of revenue for municipalities,â he said.
Changing the zoning of single-family homes to allow for greater density is key to increasing housing options and boosting local business activity, Schilling said, noting that he is currently not in favor of a tax levy land in light of the financial impact of the COVID-19 pandemic on homeowners.
Noting that Burien has not seen job growth for several years, Wilson agreed that job creation and economic development are needed to bolster property tax and sales tax revenues. He noted the city’s plans to continue zoning changes in specific areas – such as at city entrances – to encourage higher density development, and he mentioned that the proposed spending increases include $ 50,000 for a commercial development demonstration project similar in concept to the housing demonstration program.
Schilling called this “an incredibly creative and interesting idea” that “should be mobilized and implemented as soon as possible,” noting that he is also interested in exploring a tax on undeveloped or underdeveloped commercial land.
âWe have a lot of undeveloped and underdeveloped private commercial property in Burien and we need to take care of it,â Schilling said. “The way to nudge the owners of this property is to say, ‘Well, if you don’t do anything, we’re going to try to get you there by taking the fact that you’re not doing anything. with that.”
Councilors Schilling and Nancy Tosta said they believe council needs to spend more time working on the current budget proposal and options to achieve a balanced budget beyond 2026.
“It’s a lot to digest,” Tosta said of the proposed mid-year budget.
âIt’s huge,â Schilling said. âAs a council, we need to discuss this more. If we are seeing a drop in income and our financial situation becomes difficult, we as a council need to spend more time together. “
The board is expected to continue discussions on the proposed budget update on October 18, when a public hearing on the proposal will also be held. Another public hearing and further council discussions are scheduled for November 1, followed by the introduction of an ordinance on November 15 and the potential council adoption of that ordinance on December 6.
Nicholas Johnson (he / he) is an award-winning writer, editor and photographer who grew up in Boulevard Park, graduated from Highline High School, and studied journalism at Western Washington University. Send topical tips, story ideas and positive vibes to [emailÂ protected].