Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts

Monday, December 12, 2022

UPDATED OPINION: City To Build a $110 Million "Maintenance & Operations Center"


ONE CITY BUDGET PRIORITY IS:  "VIBRANT & CONNECTED:"  

Under the "Vibrant and Connected" budget category, the city will spend over $110 million for the design and construction a "Maintenance & Operations Center."  This redevelopment will be over twice the price of the new "Senior & Community Center."  Vibrant and Connected?  Not quite. The Center will be located in the SE Redmond Industrial Zone unconnected with the neighborhoods and  downtown. Of course, the Center will be anything but vibrant: a forklift scooting by;  warehouse workers chatting over a sandwich; the bang of small shops.  I don't understand why our elected would classify Maintenance & Operations in the "Vibrant and Connected Priority."  It's misleading and disappointing.  

City Finance Planning Manager Narra wouldn't give:  1) the acreage of the parcel(s), its location in SE Redmond or 3) how it would be funded.

-- Opinion by Bob Yoder, 12/12/2022

Background on the proposed Maintenance & Operations Center. 
by Haritha Narra, Redmond Financial Planning Manager:

"The Maintenance & Operations Center campus encompasses fourteen major and minor building structures including administrative offices, crew support spaces, centralized warehousing and storage, fleet shop, small shops, covered fleet parking and storage, decant facility, fuel station used by all City departments, surface parking, and Parks maintenance office. The current estimated cost for phase 1 and 2 is $100 million over a 7-year period (2027-2033). The M&O Master Plan, which will be conducted in 2023-2024, will provide a finer scope and updated cost estimate for the project."

--Haritha Narra, C.O.R.


Friday, November 11, 2022

Budget Priority: "Vibrant & Connected"

 


Vibrant & Connected  Priority Total:  $249,361,974

Vibrant & Connected Priority: The Vibrant and Connected priority supports a well-planned community that provides a sense of place by funding programs and services, including:

Does a new $110 million "Maintenance and Operations Facility" provide a vibrant sense of place for the community?  It's going to cost over twice as much as the Senior Center!

• Fund Maintenance and Operations Center Master Plan ($500,000) to inform the future design and construction of facility replacement ($109,800,000) 

• Support 1.00 FTE Maintenance Technician for Redmond Senior & Community Center ($196,364)

 • Provide funding to further the City’s affordable housing goals ($10,000,000) 

• Invest additional dollars in human service programs, including the expanded senior lunch program ($2,000,000) 

• Support for small business grants ($800,000) through non-profit organizations helping small businesses, including small business advice, marketing, planning, and translation services 

• Invest in a facilities condition assessment ($200,000) and enhanced building security ($200,000) to protect the City’s infrastructure 

• Fund business technology enhancements for audio-visual infrastructure and homeless outreach case management system ($1,166,500) 

These investments will allow Redmond to continue its commitments to Diversity, Equity and Inclusion, environmental sustainability, infrastructure, housing choices, and public safety. 

Select Service Enhancements:  Development Services $17,815,678; Facilities Management $7,631,000; Capital Investment Delivery $7,439,000; Housing & Human Services $6,901,000; Community Economic Delivery $4,616,000; Microsoft Campus Refresh 4,505,000; Lite Rail $2,613,000; Arts & Community events $1,715,000, totaling $53,000,000.

-- Excerpt from Mayor Birney's 23-24 Preliminary Budget

Tuesday, June 28, 2022

Council Reviews "Senior & Community Centers" Expenses


At today's Committee of the Whole meeting Council reviewed Opsis Architecture’s "contract supplement for construction administration services." It totals $1,412,392.  Opsis is the primary architecture firm for the new Senior & Community Centers. 

Council also took note of the $5,211,638 "maximum amount" payable to Opsis Architecture upon completion..  

2023-2024 Funding sources for the new Senior & Community Centers are, as follows:

$17.116 million: Capital Improvement Program

$1.25 million State Capital Adopted Budget  

$1.648 million Surplus Park Impact Fees from 2019-2020

$2.486 million General Fund available cash from the 2019-2020 biennium and the 2021 fiscal year, 

$9.5 million Surplus REET and park impact fees from the 2021 fiscal year. 

$16 million Councilmanic bonds:  (Councilmanic bonds do not require a vote of the people.  Council members praised Finance Director Chip Corder for managing the issue and locking in a very low rate.

Total:  $48,000,000

-- Bob Yoder,  6/28/2022


Sunday, March 20, 2022

UPDADED: Police Chief Lowe Presents Levy Costs

Redmond Police Chief Darrell Lowe

Adjusted 5% for inflation over six years.

Police Chief Darrell Lowe submitted his 2022 Public Safety "ask" to Council at a 3/15 Committee meeting, as follows:  

  • Mental Health Professional, *1 Full Time Employee (FTE,) $157,636 (includes services.)
  • Police Personnel, 13 FTE, $2,143,603
  • Police Support, 3FTE $369,047
  • Body-Worn & In-Car Cameras, $934,910 / year for labor and other ongoing expenses. The equipment and maintenance agreement is already purchased.
The Chief's final, approved "ask" added 5 mental health professionals.

TOTAL ANNUAL POLICE LEVY "ASK" IS $3,600,000/ YEAR (35% of the proposed total levy.) The Fire component is ~ 33% of the levy.  Continuation of the 2007 Levy is ~ 30% of the levy.)

After questioning by Councilmember David Carson, Chief Lowe told Council the Body Worn Camera $934,910 expense is primarily for additional staff, all with ongoing yearly salaries. 
  • Paralegal
  • Deputy prosecutor
  • Police Sergeant
  • Records person
  • IT / TIS person
The remnant is for licensing and storage.

Captain Brian Coats reported  the U.S. Department of Justice gave the City a $170,000 matching grant for body worn cameras. It's use is equipment, software and storage.

If passed, the total annual "Public Safety Levy" is: $10,392,872/year or ~ $28.33/month or ~ $340/year on a $1 million house.  Property taxes will be $0.34 per $1,000 assessed valuation.

-- Bob Yoder, 3/15/2022
    Source:  RCTV / Facebook Live / CCOW-Safety, 3/15/2022

Tuesday, March 15, 2022

Updated: Council Decides On Senior & Community Center Funding


The proposed $48 million Senior & Community Center adjacent to City Hall will be funded, in part, by $16,000,000 "council-manic" bonds.  These bonds don't require voter approval or increase taxes and will utilize future revenues to pay the bonds.  

Council voted 5-2 (Carson, Kahn) for "Option 3" bonding at their March 8th Study Session.  They chose a $16,814,039, 20-year council-manic bond bearing 3% interest. Total debt after 20 years is $21,000,000.  Interest after 20-years is $5,393,340.

"One-time money" ($16,814,039) from 2021 construction taxes will not be spent. Enormous construction activity in Redmond's urban centers generates one-time money. The City accumulated $11,066,344 one-time money in 2020, as well.  According to the Council President the funds must be used for capital expenditures, not operations. 

Councilmember David Carson prefered "Option 1."  He liked that $2 million in interest is saved up front over the life of the loan.  "Not knowing what could come, paying the price down as much as possible is a safe, conservative route," said Carson.

CM Kahn was present and quiet.  

-- Bob Yoder, 3/15/2022

Saturday, January 22, 2022

Construction Revenue Puts City Finances Over The Top

Monthly Finance Report through October 2021 

City councilmembers are usually stone-faced right after the financial report.

General Fund 

· Total revenues are 24.0%, or $17.9 million, above target.

· Sales tax is 89.0%, or $18.3 million, above target primarily due to the high level of development activity. Ongoing sales tax is 37.6%, or $6.7 million, above target. One-time sales tax, which primarily relates to construction, is $13.7 million through October 2021. 

· Utility taxes are 0.23%, or $22,000, below target. 

· License & permit fees are 29.2%, or $2.7 million, above target primarily due to the high level of development activity. 

· Intergovernmental revenues are 20.9%, or $2.4 million, above target primarily due to the American Rescue Act Plan (ARPA) allocation to the City. 

TOTAL REVENUE INCLUDING SALES TAXES:  $64,000,000 above target.  The City exceeds revenue and tax targets month-after-month from construction.  Do we really need Parks and Safety levies?

[Monthly revenues and sales tax have exceeded their target almost every month for the past year.]00,000/

Total expenditures are 14.5%, or $17.5 million, below target due to position vacancies, the timing of one-time expenditures, and the budget adjustments adopted by ordinance on August 17, 2021 that impact 2022 and beyond. Regarding the budget adjustments, staff will fix the planned spend rate in 2021-2022 for the November 2021 financial report. Other Funds 

Thursday, November 4, 2021

City Council Approves 5% COLA


Redmond City Council approved a 5% Cost of Living salary increase for union employees Effective January 1, 2022,   (Staff quoted 6.5% as the true rate of inflation.)  Many thanks to Mayor Birney and Council for their transparency on this topic!  The Council took time to ask some very good questions. In the past, union salary plans were buried in the Consent Agenda and never pulled for discussion.  

Per employee visibility, the following are a few maximum salaries:  

  • Planner, $104,232
  • Principal Planner, $131,076
  • Senior Planner, $118,614
  • Communications & Marketing Project Administrator, $109,164
  • Senior Engineer, $141,660
  • Administrative Assistant, $71,360
  • Communications & Marketing Specialist, $97,824
  • Environmental Sustainability Program Manager, $101,736
  • Senior Building Inspector, $107,376
  • Senior Accountant, $99,636
  • Senior Purchasing Agent, $109,044
  • Recreation Program Administrator, $104,408
Several neighbors and LWSD employees informed me they are very unhappy with LWSD salaries and  benefits. So, I'm in the process of  looking into District salaries. The work is not easy because the only way to find District salary information is by Public Record Request.  Sadly, their Public Records site is lacking in transparency.  I've been working to change this for quite some time. 

-- Bob Yoder, 11/4/2021

Tuesday, September 28, 2021

Monthly Financial Report / Annual Impact Fee Report

 


Key highlights from the Monthly Financial Report through August 2021 include: General Fund

 · Total revenues are 28.5%, or $17.1 million, above target. 

· Sales tax is 80.2%, or $12.9 million, above target primarily due to the high level of development activity, which has generated $10.5 million in one-time construction sales tax through August 2021. · Utility taxes are 0.3%, or $23,000, below target. 

· License & permit fees are 28.3%, or $2.3 million, above target primarily due to the high level of development activity.

· Intergovernmental revenues are 25.0%, or $2.6 million, above target primarily due to the American Rescue Act. 

 · Total expenditures are 16.3%, or $16.9 million, below target primarily due to position vacancies, the timing of one-time expenditures, and the budget adjustments adopted by ordinance on August 17, 2021 that impact 2022 or beyond (e.g., $5.0 million in ARPA funding won’t be spent until 2022, and most of the Police body-worn camera program funding is reserved for 2023-2025). 

Other Funds

Saturday, April 17, 2021

$600 Million Emergency Supplemental COVID Budget For King County!

King County Executive Dow Constantine 


Coming up at King County Council, April 19-23

 Next week is packed with action at council, including committee action on the next emergency COVID budget ($600M), a proposal to ban the use of facial recognition software countywide, and the Strategic Climate Action Plan, while full council will take up sending the renewal of the Best Starts for Kids levy to voters.

Here’s what’s coming up at King County Council:


  • The $600 million emergency supplemental COVID budget is the seventh supplemental since the pandemic began, and will spend money across a variety of services, including vaccination efforts, community supports, public health response, economic recovery and more. This represents the largest appropriation by far and is likely to warrant a robust discussion at the Budget and Fiscal Management Committee. Once approved by committee, the measure will go to full council by May 11. The committee meets at 9:30 a.m. on Tuesday, April 20.

  • Full council is set to vote on legislation to renew the Best Starts for Kids levy for another six years. The new proposal would set a first-year levy rate of $0.19 per $1,000 of assessed property value with annual growth capped at 3%. If approved, the proposal will appear on the August 3 primary ballot. Council meets at 1 p.m. on Tuesday, April 20.

Wednesday, April 7, 2021

Mayor Birney Presses to Create "Deputy Director" Positions


During Council's business meeting last night a "non-union non represented  pay plan" amendment sparked significant deliberations.

Reclassifying staff members to create three executive positions was at stake: 

1) Council voted 6-0 to hire a "diversity, equity and inclusion program manager."  LWSD has a Director working under Assoc. Superintendent Matt Cunningham doing similar work.     

2) I think the vote was 4-2 against "hiring" a Deputy Executive Department Director.  COO Malisa Files argued she needed all the help she could get.   

3) The vote for a Deputy Director of Technology and Information Services was tied. Mayor Birney broke the tie to approve the position. CM Carson voiced a strong need for the position.

Mayor Birney said she wanted to complete the organizational chart so every Director would have a Deputy.  Her reasons:  succession, "span of control," and it's not part of the budget. 

-- reported by Yoder, 4/7/2021

Friday, October 30, 2020

OPINION: City Of Redmond Should Lighten Up

Dear Mayor and Council - 

Strongsville, Ohio is a vibrant suburban city of 45,000, a short distance from Cleveland.  https//www.strongsville.org. They've taken the following measures to firm up their finances in response to COVID pressures.  The following is an excerpt from the Strongsville, OH website:

"To help combat the impact the COVID-19 pandemic has had on the City of Strongsville’s tax revenues, all full-time city employees not covered under a collective bargaining agreement – as well as the mayor, department heads, service department workers and building inspectors -- will be placed on a 32-hour work week starting ___, resulting in an eight-hour weekly furlough (a 20 percent pay reduction).

The furlough will not affect police, firefighters or dispatchers. All three operations will remain ready to respond. 

Service Department personnel will be scheduled so that workers are available to respond to any potential emergencies.

The furloughs will stay in effect until at least ___. when the city’s finances will be evaluated and a decision made about returning to normal hours. We apologize for any inconvenience."

City Council, this is budget season - please take similar actions to steady our tax revenues. 

--Thank you, Bob
   10/30/2020

Thursday, October 8, 2020

UPDATE: The City Of Redmond Budget

Mayor Angela Birney presented the proposed 2021-2022 biennial budget on Oct. 6. In a letter to the Redmond City Council and city community, she stated the recommendations in the budget were produced through Civics Result team of 30 Redmond volunteers, questionnaires, focus groups and **public hearings. 

The city forecasts that revenues from taxes and fees will decline by *$6.3 million in 2020, with expenses outpacing revenues starting in 2021, depleting the fund balance each year through 2026. In light of the economic hardships anticipated in the city, the budget cuts 26 full time positions from the 2020 staffing, including almost 10 Parks Department positions, eight capital investment, utilities and development services staff positions, and four vacant police or fire services staff positions. Some of those positions were also removed due this year as they were unnecessary during the shut downs during the COVID-19 pandemic.

Excerpts from the Redmond Reporter. Halely Ausbun, 10/8/2020

Thank you Mayor for your courage and smarts to trim FTE's. Keep it up.

*CARES funding providing $2M this year will lighten the load.

** two public hearings remain

Friday, January 24, 2020

City In Excellent Financial Shape

The City of Redmond's Director of Finance, Ms. Files, gave a very encouraging monthly finance report to council on January 24th.

1.  All city departments are under budget.
2.  Revenues are up 13% owing to one-time revenue from taxes on construction projects.
3.  Expenditures are lower owing to:
        - $3M economic contingency fund adjustment.
        - $6M salary and benefit savings owing to turnover pay.
        - $2M adjustment of one-time project monies in the general fund.

-- Source:  Council Committee of the Whole meeting, 1/24.


Thursday, December 5, 2019

2020 City Pay Plans Approved

The following Pay Plans were approved by Council on their 12/3/19 Consent Agenda.


Image result for government pay images2020 Redmond City Hall Employees Association (RCHEA) Bargaining Unit Pay Plan Approved By Council:

Midpoint, some RCHEA examples:

Planner $84,708; Senior Planner $96,420 [Highpoint $110,772];  Principal Planner $106,524; Cultural Arts Administrator $89,232; Environmental Scientist $102,373; Engineer SR $115,128; Transportation Strategic Advisor $118,608; Programmer Analyst SR $113,436; Communications & Marketing Administrator $88,704; Building Inspector $80,625; Senior Accountant $80,976

###

Meter Reader $58,440; Maintenance Aid $50,388

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Non-Represented Employees(Midpoint) Some examples:

Administrative Assistant $57,996  [$66,636 Highpoint]
Parks, Planning & Cultural Arts Manager $113,268
Police Captain $154,608
Deputy Fire Chief $153,048
Deputy Director Public Works Director/City Engineer $147,695
Deputy Finance Director $133,416
Deputy Parks Director $127,884
Recreation Division Manager $112,344
Security Compliance Manager $139,992
Communications and Marketing Manager $118,360
Emergency Preparedness Manager $118,152
IS Manager $136,272
City Clerk $136,908

Directors are paid significantly more...with bonuses.  

Wednesday, December 4, 2019

Updated: It's Estimated The Senior Center Will Re-Open In 2.5 - 3 Years

Image result for Redmond senior center image

The estimated cost to demolish and rebuild is about $21 million; estimated cost to renovate is $20 million. Owing to the Critical Areas Ordinance, the new building will move 20-30 feet away from the river with possible impacts to the green house.

The Parks and Recreation Director Carrie Hite and Project engineer Eric Dawson updated Council on the status of the Senior Center during their December 3rd Regular meeting. In August, two stucco panels near the loading dock fell off (fortunately no one was hurt) and serious dry rot was found throughout the plywood of the exterior walls. Though the roof is about 30 years old it was in satisfactory condition. Owing to dangerous conditions, the Center was immediately closed on September 9th. Ms. Hite said many of the Center's activities were re-located to 1) City Hall (Bytes Cafe and the conference rooms, 2) Marymoor Village, Old Redmond School House, 3) Grasslawn Arts Center and other places. 

In response to Councilmember Jeralee Andrson's timeline question, Hite said it's estimated the Center will re-open in 2.5 years if renovated and 3 years if demolished and rebuilt. For sustainability Jaralee recommended the waste be recycled.

Ms. Hite suggested an opportunity to expand to 4-stories was possible -- for work force housing, affordable housing, an urban school, etc.  Councilmember Hank Myers said he was by no means in  favor of an expansion. He insisted on rebuilding ASAP; the audience clapped. It seemed a salute, with parting thanks.  (Hank lost to Varisha Khan in the general election by 66 votes; this was one of his last council meetings.)  Hank asked the City to do preventative maintenance on all their buildings on a regular basis, just as people do with their cars.

Councilmember Steve Fields agreed with Hank.  He noted black mold was regularly bleached out of the green house.and had anecdotal evidence someone pushed their hand through one of the walls. He recommended anecdotal feedback be a part of the preventative maintenance program. Councilmember Tanika Padhye asked if the public engagement process would be thorough and fast-tracked.  Ms. Hite suggested a few Public meetings would probably be sufficient.

Council President and Mayor-elect Angela Birney was "encouraged that to rebuild or to fix is about the same, so at least that doesn't seem to be a big task to go one way or the other."  She said over the years she learned a lot about what improvements Seniors wanted in their Center. Angela looked forward to establishing partnerships.  She was "a little sad about the 2-3 years."

Vice President Councilmember David Carson said it was "a chance for amenities to be added."  He was not for renovating or remodeling.   

Hank Myers calculated the city already had the funds to re-build saying $15 million was authorized for Senior Center improvements in November of 2018.  (Unfortunately, the improvements weren't done until it was too late.)  Hank also noted the city was sitting on $6 million of one-time money from the 2017 -2018 budget. Thus, with the $15 million, there's money in the budget to re-build. Hank received another clap.  He was one of my favorite Councilmembers.

Reported by Bob Yoder
12/4/2019

Monday, July 22, 2019

Average Cost/Student At LWSD Is $18,432


How much did Lake Washington School District taxpayers pay per student in the 2017 - 2018 school year?

$18,432 cost per student at LWSD

This number was derived from the district's: 

2017 -2018 operational budget of $355,527,166 
+ their capital budget of $192,896,229 = a total 2017 - 2018 budget of $548, 423, 395

$548,433,395 / 29,754 students
= $18,432.

Source: Shannon Parthemer, Director of Communications and Community Engagement

City Revenues Up, Expenditures Down -- Long Term Trend Continues

Each month the Finance Department reviews the prior month’s financial performance. Some highlights from the end of June include:

General Fund revenues continue to trend over projections by approximately 12% due to one-time collections of sales tax on construction.

 The one-time collections appear in the sales tax category which is over expected collections by approximately $7 million.

Property taxes the second largest revenue source in the General Fund are on budget.

Utility taxes are trending lower by approximately $1 million.

Expenditures are approximately 12% below budget. Under expenditures are primarily due to vacancies and one-time projects that have not begun.

-- Council Committee Meeting Agenda, 7/23/19

NOTE:  The monthly pattern of high revenues and tax collections and expenditures below budget continues to improve, long term.  These favorable financial outcomes will help us address the most significant priority needs in the city's budget:  Infrastructure and Safety.  In my opinion, there is no need for a Safety levy with these financial trends. - Bob Yoder

Thursday, February 28, 2019

Letter to the Editor of the "Redmond Reporter"

Looming taxes continue to burden property owners | Letter




Looming taxes continue to burden property owners
In the City Council’s committee meeting on Oct. 23 Melisa Files, director of finance, reported:
1) Revenues were up by 5 percent of target and
2) Expenditures were 4 percent below target
So “we are in a nice place to be” says Ms. Files.
Yes we are, many thanks to the “surge in permitting fees” from development and a “one-time construction tax,” according to Files.
Historically, the city has assessed property owners the state’s maximum allowable 1 percent property tax. But times have changed and the city is swimming in revenue like never before from the massive development of our downtown and Overlake urban centers.
Owing to this unprecedented growth the city of Redmond should change their practices and forgo the 1 percent property tax this year. Residents are already burdened by looming school district taxes and an April King County Public Hospital District 2 tax initiative, among other taxes.
It’s time the city tightens their belt.
Bob Yoder

[The City went ahead and implemented the 1% tax. A $125M school district "Capital Projects Levy" measure will be on the April ballot.  King County Public Hospital District 2 is EvergreenHealth.  Evergreen's April $325M bond measure is for seismic retrofits.]

Thursday, January 24, 2019

UPDATED: Favorable City revenue / expense trend

Melissa Files, Director of City Finance reported this Tuesday that similar to the prior month, "revenue spiked 6% over target while expenditures were 3% under target.  Ms. Files indicated the reasons for this favorable report were similar to earlier monthly reports, as follows:

She stated: "Sales tax on construction took a big jump to $5 million in December. Usually it's in the $2.3 million range.  Everything that has to do with development review - taxes, licensing, and permits - contributed to the favorable outcome." 

Council member Steve Fields said "It looked like there were 4 months similar to what you described.  Does this begin to present a trend?"  Files answered, "Yes," that she was anticipating this in her forecast for 2019 but didn't expect it this soon.  Mr. Fields said "I appreciate this vigilance because I think it's important to our decision-making to know where we're at on our revenue projections." 

Files said her December report was subject to change.  Presiding Officer Hank Hank Margeson he looks forward to Ms. Files formal report in February.   

Image result for steve fields photo redmond
Council member Steve Fields 
Source:  "Finance, Public Administration, and Communication" Council meeting of 1/22/2019.

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Steve Fields has lived in Redmond for over 30 years. He worked across all functions of government in his positions at King County and the City of Seattle in the Executive offices. Fields guided elected officials on policy, budget, and operational improvements. He advised department heads and their staff to help the government perform better. He currently represents the City of Redmond as a member of the Eastside Transportation Partnership (ETP). Fields is also a Redmond small business owner with his wife.

Saturday, December 15, 2012

OPINION: We can do better on the city budget, By Councilmembers Myers and Carson

WE CAN DO BETTER
On Tuesday, December 4, the Redmond City Council passed a budget for 2013 through 2014. The administration says the budget “is reduced to take into account the continued lack of service demand in development review [and other items]” is a 4% increase over the current budget. The budget includes a 1% property tax increase even though we will have a $10 million surplus at the end of 2012 (the 1% increase is worth about $450,000 over the next two years). As the two dissenting votes on the budget, we want the residents of Redmond to know that the city can do better.

BUDGETTING BY PRIORITIES
In 2008, we adopted a process called Budgeting by Priorities, a technique designed to fund the highest priority services first, with input from the public. It was proposed by the authors of the book “The Price of Government” as a method to counter unsustainable growth in government taxes and fees. Essentially we establish a revenue prediction, and go through the various services in priority order until we run out of money. This is not a stand-alone process, however. Central to the premise of the book is that there is an acceptable price for each level of government that citizens are willing to support. Get above that level and taxpayers react negatively by rejecting tax levies, supporting restrictions on raising taxes (58% of Redmond voters supported I-1185), and even electing candidates who promise to be more fiscally responsible.

HOW DOES REDMOND STACK UP?
On the one hand, the price of government as a percentage of the total income base in Redmond is going down. One the other hand, the reason is because we have increased the population density in Redmond so that the total income base has gone up faster than the cost of government services. This is true for all eastside cities. Redmond even has a policy of encouraging this by creating high density development in downtown and Overlake. This is why high income density communities such as Clyde Hill, Hunts Point, Medina and Yarrow Point have costs of government half of Redmond levels.
On the third hand (economists always need at least three hands), how do we compare to similar cities in our area? As a group, the cities of Redmond, Bellevue, Kirkland and Issaquah spend about 4.7% of residents’ total income for all services including water, sewer and storm water utilities. For Redmond, the cost of these services is 6% higher at 4.98%. Woodinville and Sammamish don’t provide the same utility services, but we can compare the cost of basic government services for these cities as well. For the six largest eastside cities, the population weighted price of basic municipal government is 2.83%. For Redmond, it is 14.5% higher at 3.27%.

Mayor Marchione has said that it is an improper use of the Price of Government tool to compare relative costs of neighboring cities. That is like saying that it is improper to compare new car prices in Bellevue with car prices at Kirkland dealers, or wrong to compare grocery prices at QFC in Redmond to those at QFC in Sammamish. All six neighboring cities share the same labor pool, cost of living, topography and service expectations. All six cities provide high levels of basic municipal services and enjoy similarly high satisfaction ratings by residents. Probably the most directly comparable city to Redmond is Kirkland, yet our cost of municipal government including utilities is 31% higher than Kirkland and the price of basic government excluding utilities is 16% higher in Redmond. All cost data come from the Washington State Auditor for the same categories of costs, while population and income data are from the U.S. Census Bureau for 2011.

RHETORIC VS DATA
Two arguments were raised to support raising property taxes to the legal maximum. First, it costs something to maintain any new capital project we build. We all understand this. Whether it is a house or a car or a lawn mower, anything we buy will generate ongoing maintenance costs. When we look at the data provided by the administration, it is amazing how little it will cost to maintain our proposed projects. The Mayor’s projected ongoing costs related to the proposed new capital projects is 0.65% per year. For every $100 we spend on capital, it will cost us 65 cents a year in ongoing costs. Anyone who has ever owned an Audi or a Fiat can tell you what a bargain that is. This argument also overlooks that the purpose of these capital projects is to encourage and accommodate new development, which in turn generates new taxes at an even higher rate than the current tax base. We won’t be paying those new ongoing costs from the current tax base, but from a significantly larger one.

The second argument for raising taxes is concern about possible shortfalls in future years. This argument has been used every budget for the last three budget cycles, and yet each biennium our surpluses have increased. If we had not taken any property tax increases in the last six years, our current budget surplus would be “only” $8.5 million, or over 5% of the current basic budget. These rhetorical arguments are contradicted by any data analysis of possible effects.

WE CAN DO MUCH BETTER
Proponents of higher taxes argue that the increase isn’t really very much. We ask, are they even necessary? As a government, we should not be taking any more money from our residents than we need in order to operate our services honestly and efficiently. We know any money that’s collected will be spent because Governments don’t do profit sharing or pay dividends. In addition to being more diligent about our cost of government, we need to have a higher threshold for raising taxes than simple anxiety or rhetoric. Raising taxes should be the last option, not the first.

David Carson
Hank Myers