(This one of a series of articles looking at city services as presented in a program called “Lynnwood University.”
LYNNWOOD — To serve its citizens, a city uses two assets: Money and people.
Money buys supplies, pays employees and funds projects. People get the job done. From that perspective, a city’s finance and human resources departments are two of the most important groups that keep a city running.
The finance department is responsible for collecting and distributing the city’s money throughout the city, said Pat Dugan, the city’s interim finance director. The department keeps track of incoming revenues, such taxes, grants, fees and fines, and the outgoing expenses, like paychecks and purchases. Finance employees help other city departments draft budgets and verify that funds are handled responsibly.
“We need to make sure the money is being accounted for, managed and being properly used,” Dugan said. “That is the most important single thing that we do. The other challenge is helping the city use its money wisely.”
The human resources department is charged with attracting, training and retaining the most qualified employees possible, said Robin Hall, the city’s human resources director. The department wants the city to be a good place to work and offer competitive benefits so it can recruit good candidates.
“Lynnwood has top notch employees who are very dedicated to providing services,” Hall said. “They take pride in doing a good job and they work hard at what they do.”
The sign of a job well done is residents expect city services they encounter to work perfectly without really thinking about how they work or who makes them work. For instance, lab technicians in the public works department make sure the city’s water is safe to drink. The same is true for storm water drains, traffic signals and parks.
“We have a lot of people that the public does not know about because they don’t have a need to know,” Hall said. “There are a lot of people working hard to make Lynnwood a desirable place to live.”
Some city workers fulfill a specific need. In the police department, a domestic violence coordinator works with the public to reduce domestic violence incidents and assist victims in need. In the community development department, a compliance and public nuisance abatement coordinator responds to complaints about “junk cars” and “junk houses.”
Like a private company, the city employs support service personnel to maintain its own employees and infrastructure. Custodians and maintenance workers keep city facilities clean and functional. Computer engineers and technicians make sure the city’s computers work.
To date, Lynnwood employees about 526 people, of which about 330 are full-time employees, 23 are part-time employees and 173 are seasonal or temporary employees. The city’s parks and recreation department, which employs about 183 people, is the largest department, but most of those employees work part-time.
In size, the parks and recreation department is followed by the police department, with about 109 workers, public works department with 78 workers and fire department with about 60 workers.
The smallest groups are the three-person economic development department, followed by the four-person executive office and the five-person human resources department.
“We have such a broad base of jobs in the city,” Hall said.
One of the biggest challenges for human resources is to keep track of the fine print. The city has to follow ever-changing state and national regulations as well as union contracts. The city negotiates contracts with four unions and six bargaining groups.
“We also want to provide fair and meaningful benefits that attract and retain staff,” Hall said. “People have a lot of options and we are doing what we can to make Lynnwood a desirable place to work.”
Follow the money
With lists of numbers and calculations, city budgets and accounting ledgers are not nearly as exciting as fire trucks for most people, noted Dugan. But a city can’t buy a fire truck without a city budget. In fact, a city can do very little without a city budget
The finance department, by nature, has a hand in every city endeavor, from fire trucks to filing permits. City accountants work more closely with other city employees than the public. Wherever the money goes, the finance department follows. The exception is when residents pay their utility bills and taxes.
“We think of ourselves as a service department to the other departments,” Dugan said. “We coordinate the development of the budget. We work with other departments to make budget proposals. We keep track of how everybody is doing. We issue report so that people know how we are doing.”
The first priority is to make sure the money is being used properly, Dugan said. Certain national, state and local laws dictate how certain funds can be collected, held, moved or distributed. For instance, a city cannot use a state park grant, which had been earmarked to build a new park, to build a bridge.
“We have an important function of safe guarding all of that and making sure all of the money is accounted for,” Dugan said.
Washington cities have the option of drafting a one-year budget or a two-year budget. Lynnwood drafts a budget every two years, which is called a biennial budget. In the middle of the cycle or “off year,” the city makes minor adjustments to the budget and focuses on drafting strategic plans.
When most people think of city revenues, they think of taxes. In 2004, about 80 percent of the city’s income in Lynnwood came from local, state and federal taxes. The remainder comes primarily from fees for services, fines and grants.
The city’s largest source of income – about 40 percent of city revenue in 2004 – is retail and sales taxes. That is unusually high compared to other cities because Lynnwood is a significant retail and commercial center in Snohomish County and in the Puget Sound area. Retail taxes are more volatile that other types of taxes and tend to move up and down in cycles.
“It means we don’t have to rely on other taxes, but it makes us very dependant on those cycles,” Dugan said. “In many cities, you would find property taxes, retail taxes and utility taxes at about the same (level).”
Lynnwood does not collect utility taxes for water, electricity or storm water drains. Starting in 2005, the city council adopted a new 3-percent tax on telephone service, including land-based phones, cellular phones and pagers, with the provision that it will be reviewed in two years.
The city’s second largest source of income – about 20 percent of city revenue in 2004 – is property taxes.
Despite popular belief, the city does not keep every property tax dollar collected. For every property dollar collected, the city receives about 13 cents. Instead, the school district (about 32 cents), the state (24 cents) and Snohomish County (17 cents) collects the majority from each property tax dollar. Local government agencies like fire and emergency medical services, libraries and hospitals divide the remainder.
The city of Lynnwood also receives a portion of certain state taxes from Washington state, like portions of the statewide gas tax and statewide liquor tax. The city also competes for state grants for a variety of projects, including roads and parks.
By drafting the city budget, the city council decides how the city’s income will be used to provide city services. Some city services, like police and fire protection, are mandated by law or regulations. Other services are popular among residents. For the 2005-2006 budget, about $37.4 million for public safety (police and fire protection) $14.9 million for general government services and $10.6 million for culture and recreation.
The most significant expense for a city is labor costs. The dramatic rise in the cost of living, medical care and insurance is driving up city expenses, but property taxes increases are capped at 1 percent, which is below inflation.
“The most rapidly increasing part of our budget is health care,” Dugan said. “People want good, quality services and we have to find a way to pay for them.”