Shoreline City Council Adopts Balanced 2013 City Budget

From the Office of the Shoreline City Manager

On November 26, the City Council unanimously adopted the City’s 2013 budget. The 2013 budget is balanced at $67 million and allocates resources to maintain service levels desired by Shoreline’s residents.

“I am very proud of the fact that in spite of the tough economic times and continued decline in City revenues, we are still able to maintain the services our residents have come to expect from the City,” stated Mayor Keith McGlashan.

The only significant increase in the 2013 Adopted Budget comes in the area of capital spending. This year the City was able to secure $10.9 million in additional grant funding to complete the final section of the Aurora Corridor Project from N 192nd to N 205th Streets. After more than ten years of planning and construction, the end is in sight. Construction will begin in early 2013 and be completed by the end of 2014.

The operating budget, which is budgeted at $36.7 million, is expected to increase by 2% ($700,000) over the 2012 budget, which is below the rate of inflation. The 2013 Budget reduces the City’s full-time equivalent (FTE) employees by 2.725, which brings the City’s staffing back to 2008 levels for a total of 132.2 FTEs.

The 2013 surface water utility fees will be increased by 3.0% resulting in the annual single family residential rate increasing from the current level of $133.46 to $137.46. In 2011, the City Council updated the Surface Water Master Plan, which includes the operational and capital needs for the utility for twenty years. The plan included a fee structure to support both the operational and capital needs of the utility. The Surface Water Utility is responsible for maintaining and improving the quality of streams, lakes and constructed drainage facilities in Shoreline.

In 2013 there will be a temporary reduction in property tax collections related to the 2006 General Obligation Park Bonds, as a result of previous year’s tax collections being slightly greater than originally projected. The City estimates that the excess levy will go from $0.27 per $1,000 AV in 2012 to about $.255 per $1,000 in 2013, resulting in about a $4-$5 decrease in property taxes (based on an assessed value home of $276,000).

As we all know, the past few years have been very difficult economically. Municipal governments have not been spared the impacts of the worst recession since the Great Depression. Declining tax revenues and property values have created a “perfect storm” that has hit the City hard. The City depends on taxes and other revenues to balance its budget and provide services. When risky mortgages collapsed the mortgage market, home repossessions increased dramatically. This decreased property values. Property values control the amount of property taxes cities receive. In 2013, Shoreline’s property tax revenues will decline by 6.4% (about $650,000) even though Shoreline voters approved a six-year levy in 2010 that allowed property taxes to increase at the rate of inflation. This means that a homeowner of an average valued home of $276,000 may pay nearly $30 less in property tax in 2013 to the City of Shoreline than they paid in 2012.

Added to the decline in property values is the continuing problem associated with unemployment. Higher unemployment and the uncertainty it creates has meant people are spending less, which means lower sales tax revenues. While employment has started to recover and sales tax revenues are beginning to rise, sales tax collections are still near 2006 levels.

In spite of these challenges, the City continues to provide the quality services our community has come to expect and demand. It also continues to maintain a Standard & Poor’s AA+ bond rating and financial management assessment rating of “strong,” maintain reserve levels to address unanticipated needs and comply with the City’s adopted financial policies. In addition, the City continues to produce clean audits and to be recognized by the Government Finance Officers Association for the Distinguished Budget Award.

For more information about Shoreline’s budget visit the City’s website or contact Administrative Services Director Robert Hartwig at 206-801-2301.