Sultan copes with new revenue shortfall

Published 8:11 pm Sunday, April 27, 2008

SULTAN — The city is likely to rake in less revenue from building permit fees this year than it had expected. Still, city officials said they expect to get through this year without drastic expense cuts after surviving a major budget shortfall in 2007.

“We could’ve been in a little worse shape than we are,” Mayor Carolyn Eslick said.

A slow housing market has caused the city to change its revenue forecast, city administrator Deborah Knight said. Now the city expects to receive $47,500 in building permit fees. That’s about 32 percent less than $69,500 the city originally budgeted.

Fewer permits also mean fewer expenses. The city contracts for building inspection service, Knight said. The fewer building permits that are issued, the less money the city will pay the contractor.

“If we don’t have work, we don’t have expense,” she said.

The city put together a conservative budget for 2008. The overall budget is $10.5 million, Knight said. The general fund that pays for basic services such as public safety is about $1.85 million. That’s down from $2.2 million in 2007.

The city is waiting for property tax revenue to be received in May, Knight said. With few businesses generating sales tax revenue, Sultan counts on property taxes.

“We are watching our budget very closely,” she said.

In 2007, city officials faced a $450,000 deficit in Sultan’s general fund, partly because the city had to pay unexpected bills for internal investigations at the police department.

To balance the budget, the city reduced its police force to five patrol officers and the chief. That was down from eight patrol officers and the chief in the original budget. City officials also took other measures to reduce expenses, including cutting a full-time employee’s hours to part time.

The city had considered closing the Sultan public library to save money.

In March, city voters overwhelmingly approved the library’s annexation into the Sno-Isle Regional Library System. Starting in 2009, city residents will pay for the annexation through their property taxes directly to the library system.

That should help the city’s finances, Knight said.

“It frees up about $100,000 in general fund revenue,” Knight said. “The council will need to have a discussion about what to do with the money.”

Meanwhile, the city is seeking volunteers to serve on a citizen advisory committee. The group is expected to make recommendations about how to improve the city’s finances in the future, Eslick said.

“They will have a lot of influence,” she said. By having this group, it will bring down that barrier between the city and the community.”

Reporter Yoshiaki Nohara: 425-339-3029 or ynohara@heraldnet.com.

Get involved

The city of Sultan is seeking volunteers to serve on a citizen advisory panel that is expected to make recommendations about the city’s financial situation. Applications are available at City Hall, 319 Main St., Sultan and at the city’s Web site, www.ci.sultan.wa.us. Applications are due by 4 p.m. on May 9.

For more information, call the city at 360-793-2231.