Mayor Denis Law proposed a 2019-2020 biennial budget that financial advisor Jan Hawn said was conservative, but strong and continues Renton’s quality of service.
The proposed budget increases personnel, bumps property taxes to cover major parks maintenance and increases utility rates to accommodate county fees, proposing it leaves the city in sound financial condition.
The 2019‐2020 proposed budget will result in a net decrease in total fund balance of $10.1 million citywide, with expenditures at $525 million exceeding revenues of $514.9 million. The city begins 2019 with a fund balance of $127.65 million, ending with $117.59 million remaining.
At the presentation, Hawn said city expenditures exceed revenues mostly because of the timing of major capital project funding, utility funds and some planned equipment purchases. Forty-seven percent of expenditures are for public works, which Hawn said includes utilities and capital projects. Expenditures are up 10.4 percent from the 2017-2018 budget.
Hawn said the revenue was typical for Renton, with 33 percent from taxes and 32 percent from service charges. Revenue is 11.7 percent higher than the 2017-2018 budget due to business and operation tax, capital grants, fines and forfeits. About $12 million will be transferred to fund major capital projects.
The city calculated that the 104,100 residents in Renton will each pay about $1,622 for the city, or $4.44 a day. If the 57,237 Renton employees are included, it’s $1,047 per person, per year, or $2.87 a day.
The general fund, which includes general government spending, will be maintained at $27.6 million, according to the budget documents.
With adjustments for future wages and employee medical benefit increases, the city expects to see a negative gap in the general fund that will increase into the projected future, to an estimated $7.4 million by 2024.
“This is due to the fundamental imbalance between the revenue options available to local governments and the services local governments are expected to provide. Renton is not an exception,” the budget states. “This issue has been a high priority topic for the state legislature and citizen advisory panels for various past state governors. But, in the end, is it a problem left for local governments to solve themselves with the limited tools available.”
The proposed budget will establish pre-recession levels of staffing, Hawn said, by adding 24.62 positions. Law discussed these positions in his budget message. Law said the cost of these new positions will be offset by new revenues.
Positions included five for the Community and Economic Development department, that deal with permits and inspections. There was also four-and-a-half positions for the Community Services department to address the growing demands of park, trail and recreation programs, including the facility division to meet ongoing maintenance needs at 66 city-managed facilities.
A records specialist, parking enforcement officer and police officer moving to traffic sergeant are included in police staffing increases. Three maintenance positions and a transportation design civil engineer for Public Works will be added, and positions in IT.
“We reduced our staffing back in 2009 to address the impact of the recession, despite significant increases in population. We have continued to see significant growth in Renton and have remained conservative in adding back positions to meet the increased workloads,” Law said. “We must now fill a number of key positions in order to maintain the level of services we have been providing.”
Thirty-three percent of citywide spending will go to personnel-related costs.
Fines and forfeits
Fines and forfeits will be increasing budget revenue for 2019-2020. The addition of eight more photo traffic enforcement systems in 2018 is projected to add $1.1 million in revenue each year. The projections for 2019 and 2020 are about $4 million each year, from under $3 million in 2017.
Sales tax annexation loss
Both Law and Hawn said service level needs will be met without tax increases. The budget saw a significant hit in tax subsidy loss this year with the end of a $3 million sales tax subsidy for annexing the Cascade/Benson community in 2008, which Renton has been receiving from the state.
“We have been anticipating this,” Hawn said at the presentation. “We have been setting aside reserves to offset the loss, which we will use over the next six years.”
The reserve was one-time revenue and will be depleted after it’s used.
Property tax increase
Though service level funding needs are met, property taxes will still increase due to a council-manic bond that will generate $1.1 million a year for major parks maintenance. The property tax rate would increase 7 cents per $1,000 of assessed property value. Property taxes will make up 8 percent of the total revenue, and 20 percent of general fund revenue.
“I agree with the recommendation provided to you by the Community Advisory Committee you appointed last spring,” Law told city council at the budget message. The council voted 4-2 to approve the council-manic bond in September.
An image showing how much property tax goes to the city was also presented with the budget, showing the city received about 9 cents for every dollar of property taxes paid in 2018. Councilmember Don Persson said at the presentation that even though the city gave up some taxing authority, the money is still going somewhere.
“This makes it sound like we’re doing really good, but when you take into account what (residents) are paying for Renton Regional Fire Authority, it’s actually a little higher than it used to be. We gave up some taxing authority but we’re still paying for it,” Persson said.
The fire authority received a little over 7 cents for every dollar of property taxes in 2018.
Utility rate increases
The rate of utilities is also proposed to increase in 2019 and 2020 after county tipping and hazardous waste fees increased. Garbage rates will increase 4 percent in 2019 and another 4 percent in 2020. Water, sewer and storm rates will each increase by 2 percent in 2020.
Law said public safety has always been the city’s top priority.
Public works dominated the expenditures at 47 percent as it included capital projects and utility services. Hawn said, when you look at the number of full-time employees, safety and health dominate with 203.5 full-time employees by 2020 compared to utilities almost 118 full-time employees by 2020.
Police also make up 38 percent of the general fund spending and 16 percent of the total budget spending. Law said the city’s support of additional officers has put Renton in an envious position with other jurisdictions with the number of enforcement officers hired.
Golf course rate increase
Maplewood Golf Course is owned and operated by the city, and is increasing course rates to be in line with neighboring community green fees. The course rates are increasing $1 to $2 per round, game and day dependent.
This will increase the city’s golf reserves from $4,895 to $278,726 — a 5,694 percent increase.
“While that percentage sounds very high, it’s only because we have virtually no fund reserves going into 2019. The $4,895 shown for beginning fund balance is extraordinarily low, thus justifying the need to build up reserves,” Hawn said in an email. “The fee increase is also based on market data provided by our Community Services and Golf Course.”
The budget is estimated to be enacted by Nov. 19. Two public hearings are scheduled for Oct. 22 and Nov. 5 in advance of this, and in advance of setting the property tax levy for 2019.