Snohomish County revenues fall $5 million short

EVERETT — Snohomish County leaders got the latest dose of bad financial news Wednesday when they learned that revenues came in nearly $5 million short of expectations last year.

That puts cash reserves the county relies on to pay bills at perilously low levels. Councilmen reacted by placing a hold on filling a dozen jobs they had exempted from the countywide hiring freeze just last week.

The upshot, for now, is that the county treasurer will have to get by without a lead cashier, the District Court must make do with fewer probation counselors and the medical examiner’s four death investigators will have to scramble to cover around-the-clock shifts.

“When I walked in here this morning, I thought we were going to hear that our revenues were going to be down about $1 million,” Council Chairman Dave Gossett said. “I was totally shocked to hear what we had.”

Finance director Roger Neumaier told the council that the falling revenues depleted to $8.8 million the cash reserves the county uses to meet payroll and other expenses. That’s $4.9 million lower than the $13.7 million officials expected.

“The bottom line was that the fourth quarter (of 2009) was tougher than anticipated,” Neumaier said.

The current reserves are less than 5 percent of the county’s general-fund budget. Ideally, county finance experts say, reserves should be 11 percent or higher.

The council immediately renewed a hold on a dozen empty positions: three in District Court, two in the finance department, one with the treasurer, one in Superior Court, two in the medical examiner’s office, plus two full-time and one part-time position in the prosecuting attorney’s office.

Just last week, the council had granted requests to fill the jobs. Gossett said the council might free up some positions after taking a closer look at each one.

Councilmen also demanded that County Executive Aaron Reardon’s staff let them know if reserve levels fall any further. Gossett said he was frustrated they hadn’t received more notice that the situation was so grim.

Reardon’s staff pledged to work with the council, but one of Reardon’s executive directors maintained that they had provided ample evidence to clue in councilmen, or anybody else who cared to look, about shrinking reserves.

“If you’ve looked at the quarterly reports and the monthly reports, there’s absolutely no surprise today,” Brian Parry said. “We’re simply reporting back the bad news that their budget is over-expending their resources.”

The council has rejected budgets submitted by Reardon each of the last three years. He has also objected to the council’s spending plans, but the council has the authority to approve the budget.

Reardon warned last week that elected leaders might have to return early this year to adjust the current budget. Last year, the county enacted emergency furloughs and other measures to compensate for falling revenues.

Gossett said the steps the county takes this time will depend on how revenues fare this year compared to the assumptions in the budget.

The biggest changes between revenue forecasts and what the county collected last year were in sales tax, recording fees and motor-vehicle licensing fees.

The more than $32.5 million the county received in sales tax was about $2.2 million less than expected. A portion of the sales tax that goes towards law enforcement and criminal justice was about $5.2 million, nearly $620,000 under projections.

A drop in real-estate transactions likely kept legal recording fees to $1.7 million, or nearly $472,000 less than forecast. Motor-vehicle licensing fees came in just over $3.1 million, or about $486,000 low.

Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.

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