Although the city of Maple Valley is approaching its 2012 budget conservatively, things have started off on a positive note.
While giving a presentation at the Maple Valley City Council Nov. 7 meeting, Finance Director Tony McCarthy revealed that the city will underspend $1 million due to a combination of conservative budgeting and unexpected revenue.
But don’t expect the city to spend it anytime soon.
City Manager David Johnston called the $1 million savings a “blip,” stating the city should not take it as an excuse to spend more liberally.
“It doesn’t mean we don’t remain cautious and conservative because…it is a very difficult environment to predict,” he said. “You used to be able to under-project and expand your services, and you’d still get a boon of excess revenue, but now we’re not having it.”
Yet, he said it will benefit the city if its revenue sources are affected.
“It gave us a lot more breathing room,” he said. “But we also should be thankful for that because we don’t know what is going to come out of the legislature.”
Originally, the city planned for only 50 single family permits (SFP) in 2011. So far, there have been 140, and they expect to have 150 by the end of the year. This has brought in an additional $634,000.
The city also was able to save $479,000 in spending due to position vacancies.
Maple Valley staff had to use $100,000 of it in subsidies for the Lake Wilderness Golf Course.
For 2012, they expect to only have 70 SFP, which is why the city plans to budget less for 2012 than it actually collected in revenue in 2011.
“We were surprised to see 140 single family permits this year, so that’s why we are being cautious planning this year,” Johnston said.
Johnston explained the $1 million will aid the city at a moment when there is a significant degree of uncertainty coming from both the state and national level.
Two weeks ago, Gov. Christine Gregoire unveiled a proposal which would hold back various intergovernmental transfer payments and instead keep the revenue entirely for the state, in an effort to close the $2 billion gap in the state budget.
The proposal has met with strong criticism from the Association of Washington Cities (AWC), which sent a letter dated Nov. 2 signed by 115 mayors, including Maple Valley Mayor Noel Gerken.
According to Johnston, Maple Valley would lose $367,000 in revenue as a result of Gregoire’s proposal if it were implemented.
“It surprised all municipal governments,” he said. “She (Gregoire) told us she wasn’t going to look at shared revenue with local governments as a way to stop the financial bleeding, and then it (the proposal) comes out of nowhere.”
Unexpected actions such as this, Johnston said, is why the city needs to budget conservatively.
“I view budget as a guide, not a mandate to spend,” he said. “That ($1 million) helps, but it doesn’t mean we won’t get off the conservative stage. I froze $400,000 (in spending) my first year because we didn’t have the money. Last year we had to fill a $1.3 million hole by dipping into our reserves. We’ve felt the pain.”
