Lake Forest Park Council members unanimously amended the 2009-2010 budget on Feb. 12 to adjust for rapidly changing economic conditions statewide.
City staff received information from state officials indicating that revenue from Streamlined Sales Tax (SST) and the newly formed Transportation Benefit District (TBD) would not yield estimated funds in the projected time periods originally discussed at the time of the biennial budget’s adoption last December. The city had hoped to begin collecting $20 vehicle licensing fees by July, according to city administrator David Cline, but delays at the state level pushed the predicted start of the new fee to January 2010.
“What we thought would take six months has become one year to create the TBD,” Cline said.
A council committee met twice in January to prepare budget amendments, according to councilmember and committee chair Alan Kiest.
“In a sense it’s more challenging work than what we first adopted in December,” Kiest said. “Although it was thought in December that we were going with conservative revenue projections we have made (projections) more conservative in this amended budget.”
Revenue projections for the city’s property tax, sales tax, utility tax and court and criminal justice were adjusted down to account for a zero percent increase in the 2009-2010 budget. An assumed $350,200 in SST revenue was wiped from the budget as well as a $100,000 deduction in anticipated 2009 TBD funds.
“We are hopeful that the yield of the TBD will ultimately come up during this biennium,” Kiest said. “We had to ration down the assumption of SST. It just hasn’t yet materialized … maybe we’ll get a pleasant surprise in SST someday, but who knows?”
Councilmembers Kiest, Ed Sterner and Dwight Thompson worked with city staff to find ways to reduce expenditures and use a portion of the city’s $2 million reserves to present an amended, balanced budget to the full council. Amendments included the elimination of the city’s state lobbyist, an associate planner position and public safety administrative position. A vacant police position will be filled this year.
Reductions in expenditures and the use of $350,000 in reserve funds should get the city through Dec. 2010, Kiest said, but he also warned the city’s budgetary outlook does not have a healthy momentum passed that point. Projections show a dip of $233,000 in the city’s ten percent operating reserve in 2011 expanding to more than $2 million by 2014.
The 2009-2010 budget is the second adopted biennial budget in Lake Forest Park, according to Cline. The city council adopts an operating budget every two years and makes amendments to the capital budget during the off years, he said.
“Our hope and expectation is we’ll still be on track in the fall but if we’re not we’ll make changes then,” Cline said. “Every time we tinker with the budget it’s difficult on staff, it’s difficult on the council members, it’s difficult on the community.”
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