Lacey City Council adopted its budget Thursday night, a total budget for 2014 that underwent some slight changes after the city faced a modest deficit of about $763,000.
To balance the budget, the city found some cost savings in three areas, including a savings of about $360,000 because there was no increase in health care expenses for city employees.
The city employs about 250; health care insurance is provided through the Association of Washington Cities.
The city approved a total budget of $109 million, including a general fund budget of about $38 million. The total budget was $5.6 million larger than this year’s budget, partly due to debt service payments on new revenue bonds. The general fund is $3 million larger than this year’s budget due to the receipt process for utility taxes — essentially an accounting change, Lacey finance director Troy Woo said.
Although the city managed to balance its budget, the city has been in a kind of “holding pattern” since the recession deepened in 2008, particularly with staff. The city expects to add one full-time equivalent next year, City Manager Scott Spence said before the meeting.
The “holding pattern” stems from the fact that though the economy is improving, it continues to do so slowly. Sales tax revenue, one of the biggest drivers of revenue for the city, is projected to rise to $8.6 million next year, about 1 percent higher than this year.
Spence also added that though the city appears to be a big driver of sales taxes, on a sales tax per capita basis, the city ranks lower than Yelm, Olympia and Tumwater at $185 per capita, he said. Olympia stands at more than $300 per capita.
Here is some of what Lacey residents can expect next year:
Utility rates: Water will increase $1.60, wastewater 82 cents and stormwater 67 cents, for a total of $3.09 per month.
Public safety: The city will spend $11.4 million on public safety, up 1.5 percent from this year, reflecting increases in jail costs as well as public defense.
Key projects: The city will spend about $650,000 to connect Third Avenue with Golf Club Road, known as the Golf Club Road extension.
Other projects: Next year and in the coming years, the city will spend millions on capital improvements to its water, wastewater and stormwater systems, infrastructure that is valued as an asset at about $250 million, City Manager Spence said. One of next year’s major projects is $2.36 million for a Chambers Lake stormwater facility. Revenue bonds have been issued totaling $8.7 million to help pay for the utility capital improvements.
Property tax levy: The levy will fall next year to about $1.27 per $1,000 of assessed value from about $1.32 this year.
Debt: The city has $18.2 million in outstanding debt, well short of its total borrowing capacity of more than $300 million, Spence said.
The final budget adoption was preceded by a budget presentation, two public hearings and a revenue hearing.
Rolf Boone: 360-754-5403 firstname.lastname@example.org