After budget workshops, a city manager-led presentation and three public hearings, Lacey City Council took its final action on the 2016 budget Thursday night and approved it.
The city goes into next year with a budget of $128.4 million, including a general fund budget — the portion of the budget that pays for city services — of $42.4 million. That’s up $2.7 million from 2015, largely due to higher labor and employee benefit costs.
But what a difference a few months make.
At the start of 2015, the city was forecasting a general fund budget deficit of about $840,000 for 2016. That’s because of those higher labor and benefit costs, combined with a weak sales tax revenue growth forecast of 1 percent.
But the Lacey economy kicked into gear in February and March and kept on growing, Finance Director Troy Woo said. Through November, sales tax revenue has grown by 14 percent, helping to whittle the final general fund budget deficit down to $154,000. That remaining hole was filled with reserves, he said. It also was the city’s lowest deficit since a recession-challenged 2009.
“It’s refreshing after six years of real doom and gloom,” said Woo about the budget.
Helping the economy was sales tax revenue generated by new construction, such as South Puget Sound Community College’s new campus on Sixth Avenue and a new North Thurston Public Schools’ middle school in northeast Lacey.
“It’s pretty close to the best we could possibly hope for,” Councilman Michael Steadman said.
Councilman Jeff Gadman had words of praise for Woo and his staff during a stressful time of year.
“You made it work and you made it work without a lot of conflict and I appreciate that,” Gadman said.
There was one disappointment about the budget process: not a single member of the public testified about the budget during three public hearings.
Woo acknowledged that was unfortunate, but he predicted public response would have been different if city service and staffing levels had not been preserved in next year’s budget.
“No news is good news,” he said.
The city employs 243 people.