SEQUIM –– City Manager Steve Burkett delivered what he called a “prudent and disciplined” $55.3 million budget proposal for the city’s 2014 operations to the City Council on Monday night.
Because most of the cost of building a
$15 million City Hall and police station will be paid next year, the 2014 spending proposal marks a steep increase over the $28 million 2013 budget, he noted.
“We only do it every 40 years,” Burkett said of City Hall construction.
The long-planned municipal building, now in the design stage, would house the city’s administration and Police Department. Burkett’s budget also includes the maxi-mum-allowed 1 percent property tax boost.
It also calls for 4 percent increases in water and sewer rates, though those increases could change based on the findings of a subcommittee that will meet over the coming two months to review the city’s utility rate structure.
General fund expenses are budgeted for a 2.3 percent increase over 2013, $436,000, while revenues are due to rise 3 percent, $513,000, with a 4 percent rise in sales tax revenue projected.
Directors of the city’s various departments will explain their 2014 spending plans to the council Oct. 14 and 28.
A public hearing is tentatively set for Nov. 12, with the council expected to adopt the spending plan Nov. 25.
The council generally meets at 6 p.m. at the Sequim Transit Center, 190 W. Cedar St.
About $7.1 million of the 2014 budget is for employee salaries and benefits, up $268,000 from 2013.
“Since we’re in the service business and we provide our services with our employees, that’s our biggest expense,” Burkett said.
While staffing levels are expected to be close to 2013 levels and there will be no scheduled raises in pay, most of the increase in spending on employees comes from health insurance.
“Our benefits continue to be one of the biggest cost-drivers,” Burkett said.
Employee unions agreed to forgo across-the-board raises in contracts signed last year. Some employees will receive 2.5 percent raises, or “step” raises, as they rise up the municipal employee classification system.
Construction is expected to begin next year, when the first payment is due on the $10 million bonds issued by the city in August to help pay for the new building.
Burkett said that creates a “double whammy” of City Hall-related expenses, as the city pays $580,000 toward the bond and still has to pay rent to house some of its offices.
Elray Konkel, administrative services director, said the city had planned for that double hit and should have enough revenue to cover both costs in 2014.
The current 3,500-square-foot City Hall, built for $115,000 in 1973, will be torn down before construction begins.
Offices currently housed there, including administration and the finance department, will be moved to a suite in the Sequim Village Shopping Center, where police are currently located.
The 4 percent increase in water and sewer rates is to cover the projected amount needed to fund maintenance and expansion projects for both systems, Burkett said.
That equates to an extra $1.09 per month on the average residential water bill and $2.21 per month for sewer. Cost to hook into the system also would increase by $250 for each utility.
That may change, Public Works Director Paul Haines noted, as a special subcommittee of the City Council reviews the utility rate structure.
More revenue is needed for both funds, Haines said, since the city has a backlog of maintenance projects it needs to do in both the water and sewer systems.
“We have not been investing at a rate that we should be in the past,” he said.
Last week, the council received a report detailing adjustments to different classes of water and sewer users that could fund system costs without across-the-board increases.
Some users, like adult care facilities, could be charged higher rates to account for actual usage.
But that decision is not an easy one, Mayor Ken Hays noted.
“These are political hot potatoes,” Hays said. “To me, it’s not just upsetting a handful of business people; it’s a real consideration of impacts to our economy.”
The subcommittee will meet twice in the next month with staff, Haines said, to go over rate options before bringing a recommendation to the whole council.
While the budget includes a $1.9 million list of street projects, Haines said, those projects largely rely on grants that may or may not come. If the grants don’t come, the projects will not be done, he said.
No major street projects are on the agenda for 2014, but engineering of makeovers of Fir Street and Etta Street are on the docket.
The city also will replace streetlights with more energy-efficient LED lights that Haines said will “dramatically” reduce the city’s electricity bills.
Some of the streetlight replacement cost could be recouped through a grant, Haines said.
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Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at jsmillie@peninsuladailynews.com.