The Monroe City Council got a bit of good news last Tuesday, March 24, as Monroe Finance Director Dianne Nelson presented the five-year forecast for the city's general fund.
"I started working here in April 2010, and this is the first time that I'm coming to you with a positive forecast and a positive outlook,GÇ¥ Nelson said. "No doom-and-gloom tonight. I am tickled pink.GÇ¥
The city's general fund's beginning fund balance for 2015 included a rollover from 2014 amounting to $435,020. This amount, not previously included in the 2015 budget, may be allocated in a number of ways, including new staff, code revision, lobbying services and the downtown Main Street Plaza project. Contingent on council approval, the changes will be adopted via the first budget amendment of 2015, which come before the council in May. The $435,020 was leftover from a deliberate reduction in expenditures.
"We ended up not spending that much of the budget from 2014 by tightening our belt and making conscious decisions to either delay or cut back services GÇô just to reduce expenditures,GÇ¥ Nelson said.
Extra funds
When Monroe Mayor Geoffrey Thomas took office in 2014, he used the five-year forecasting tool to conduct extensive analysis of the city's financial condition. When he noticed a structural deficit in the 2014 budget, he directed staff to save approximately $250,000 by not funding two positions and opting not to fund some one-time programs.
"I told staff when we developed the budget: "Whatever decisions we make in the budget for the upcoming year, that the revenue line needs to be above the expenditure line in that year, plus future years,'GÇ¥ Thomas said. "That's how we ended up in the black.GÇ¥
In addition to the general fund rollover, sales tax revenue is up by 4 percent, which the city has estimated will amount to an overall increase of $157,000 above what was expected in 2015. Sales tax estimates for 2015 were calculated cautiously. While the city anticipated an increase due to the new Walmart store, which opened on Dec. 3, 2014, they also wanted to take into consideration the fact that the sales tax revenues from other retail establishments could potentially decrease.
"As it turns out, the other stores seem to be doing OK. That's really good news,GÇ¥ Nelson said. "We're not seeing the big dip in the other stores that we were expecting.GÇ¥
This was confirmed by the sales tax revenues received in January, which were higher than expected. This meant that sales in November reflected an increase GÇô prior to the new Walmart store opening. Since sales tax monies are paid by retail establishments to the state of Washington, which then redistributes the funds to the different taxing agencies, there is a two-month delay before the city receives funds.
"We had estimated that sales tax would increase in 2015 by 11 percent, and within the first two months, sales tax had increased 15 percent,GÇ¥ Nelson said. "So that's 4 percent more than what we had estimated.GÇ¥
Possible expenses
During the council meeting, Nelson presented a proposal for allocating the funds, including three potential full-time positions and several other ideas for one-time expenditures. Details of the proposal included transferring $250,000 to the contingency fund in 2015 and again in 2016, which would help replenish the fund's balance. Currently, the contingency fund's balance does not meet the city's reserves policy requirement.
The contingency fund is meant to be used for one-time-only, non-operational expenses or other unforeseen expenditures subject to council discretion. Currently, the fund has $416,917, which is roughly half of the $842,464 required per the reserve policy.
The proposal also includes a $160,000 contingency fund expenditure for the Main Street Plaza project, so that the overall increase to the contingency fund would end up being $90,000 in 2015.
The proposal's ongoing expenditure list included three full-time positions, including a deputy city clerk, a planning position and a staff accountant. The staff accountant position was added based on a recommendation from the state of Washington during an audit last December.
"We used to have finance director, a treasurer and a utility billing manager,GÇ¥ Nelson said. "And now we just have me.GÇ¥
The accounting position would bolster the city's accounting department, creating a more robust system of checks and balances. Several councilmembers advised Nelson to boost the level of priority on the accounting position, since it was a specific recommendation made by the state.
Other options for one-time expenditures included investing further into Monroe's downtown core and contracting with a lobbying company to represent the city's interests in Olympia. Several council members disagreed with the idea of considering lobbying services as a one-time expenditure and felt that looking at it as a multiple-year commitment would be more realistic.
City staff will revise the proposal based on the council's recommendations. The 2015 budget amendment will come back before the council sometime in May.
Comments
Use the comment form below to begin a discussion about this content.
Sign in to comment