SEQUIM — The outlook is not nearly as dreary as it was a few months ago.
That was the budget message from Sequim’s new city manager, Steve Burkett, and its seasoned finance director, Karen Goschen, to the City Council in the first of two study sessions this week.
The council met Monday for Goschen’s presentation of the draft budget for 2010, and will reconvene for another study session at 5 p.m. Thursday in the Sequim Transit Center, 190 W. Cedar St.
Back in July Goschen forecast an $850,000 chasm between city revenues and expenditures in 2010, and warned that cuts in staff hours and city services could be in the offing.
But to Monday night’s council session, she brought far better news.
That bleak forecast was based on sales-tax revenues from the first quarter of 2009, Goschen said; since then that tax revenue picture has brightened as consumers are beginning to spend again.
Goschen and Burkett have also found areas in which to trim some $400,000 from the city budget by leaving vacant staff positions unfilled, deferring vehicle purchases and reallocating some general fund costs to other city funds, such as the capital projects and sewer budgets.
Two full-time police officer positions will stay vacant, for example, if the City Council adopts the proposed 2010 budget.
“This is a status quo budget,” Burkett told the council.
No general fund money is earmarked for any new staff positions, and the city’s plans to establish a municipal court are on hold for now.
Still a gap
Still, general fund spending in 2010 is projected at just under $8.5 million, while revenues are expected to reach only $8.123 million; Burkett and Goschen’s budget proposes to cover a $326,510 gap with money from reserves.
The council members have said they want to have an end-of-the-year general fund balance of at least $1 million — and the draft budget satisfies that, with a projected $1.151 million remaining at 2010’s end.
At the end of the budget presentation, council member Walt Schubert posed a question about the sharing of money with outside agencies, some of which have received city funding in past years.
The Boys & Girls Clubs of the Olympic Peninsula has asked Sequim for $60,000 to fund its teen program in 2010, the United Way of Clallam County has asked for $50,000 for local human-service agencies and the Clallam County Economic Development Council has requested $18,000.
“Based on the general fund balance of $1.15 million,” the city could satisfy those requests, “and we’d still end up with more than a million in the general fund,” Schubert observed.
“Correct,” answered Goschen.
The council will discuss such agency contributions in the coming weeks, and hold a public hearing on the 2010 budget at 6 p.m. Nov. 23 in the Transit Center.
The council could adopt the budget that night or during one of its December meetings.
In one more piece of positive news, Goschen told the council that since Sequim’s sales-tax increase ballot measure won voter approval in the Nov. 3 election, the city will have some money to spend on streets, sidewalks and the Olympic Discovery Trail.
The two-tenths-of-a-percent increase will mean the countywide sales tax rate of 8.4 percent will go to 8.6 percent inside Sequim only.
The hike won’t go into effect until April, Goschen noted, and it could then generate $300,000 in 2010 and as much as $600,000 annually through 2019, when the tax increase will automatically sunset.
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Sequim-Dungeness Valley Reporter Diane Urbani de la Paz can be reached at 360-681-2391 or at diane.urbani@peninsuladaily news.com.
