6/20/07, The city's unallocated $32M capital funds

$32M in Unallocated, "Residual" capital funds! -- The city's capital fund is loaded! I received the following, alarming budget information from a neighbor this week:

"Direct from the new budget--hot off the presses on p. 240:
The Capital fund (CIP) for 2007 - 2012 is: $216.6 Million. $15% of this Capital fund is NOT ALLOCATED to any functional area!

At the end of 2012, the CIP has $32.4 million of (capital) funds unallocated which are not restricted by state law for capital and could be used for general city services.

Also noted on the same page is the fact that the Council decided to retain $17.9 million, which represents the 5% transfer from the general fund for 2007-2012, in its contingency pending a further review of the CIP."
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UPDATE, 8/3/07 - The Mayor recognized $32M of unallocated Capital funds didn't look too good to the public (us) and played "the shell game" to move $18M from the unallocated funds into various & sundry "reserve" funds. $13M in unallocated funds now "looks better" to us.
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The obvious question is, with all these millions of dollars ($50 Million) siting around without any direction why couldn't our elected afford to negotiate in earnest to acquire Perrigo Woods? We have $32M in idle cash! CAMWEST was willing to sell their land.

On another note, one now begins to wonder if a "levy-lid-lift" (raising taxes on assessed property values) is necessary?
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BUDGET 101
CIP = Capital Improvement Plan or capital fund (for fire trucks, city hall, roads, park acquisition. Council is actively considering adding maintenance (M&O) expenses to the Capital budget.

The 300+ page 2007 budget document is available from the City Clerk's office for $6.75 a copy. It will also be posted on the city web page http://www.redmond.gov/ - if you can find it. I'm picking my copy up on Monday.

At the last council meeting, Councilman John Resha led and excellent discussion on the state of our Capital Improvement Plan (CIP). We will certainly miss John's public service, as he has decided not to run for office this year. Council makes the whole budget process much more complicated than it is, probably to keep us guessing; and because they keep creating and rearranging their "buckets of money". I'll take a stab at it.

In general, the Council has two primary buckets -- "The General Fund" and "The Capital Improvement Fund". Most of our tax dollars go into The General Fund to be used for general services like police, fire, planning, and maintenance of City Hall, and on. City Hall maintenance costs $600,000/year!

The Capital Improvement Plan (CIP) is mostly used for making capital improvements. For instance, the city plans to tap the capital fund for $30 million into sewer and stormwater treatment for our "new downtown". [5,000 will reside the downtown in the next 15 years]. And, the CIP will fund a $20+ million "Bear Creek Parkway". Council is still trying to figure out if they should borrow to build this parkway -- and NE 116th St. -- or use the Capital Improvement Fund.

An additional bucket is being considered to fund "Maintenance and Operating" (M&O) expenses for our parks maintenance, city hall, stormwater vault maintenance, and others.

Up until this last meeting, the $71 million City Hall capital bill was paid out of the General Fund. But, why pay a capital expense out of an operating budget? That's what "Citizen Vicky" asked at a recent council meeting. Vicky also requested a state audit.

At this week's meeting, the Mayor re-juggled the "buckets" allowing council to rationalize how City Hall actually qualifies for Capital Funding! Oh, good, now we will pass the State audit test.
Enough said for BUDGET 101
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BUDGET 102
All tax dollars (minus utilities, hotel & lodging, etc.) go into the GENERAL FUND. Five percent of these General Fund dollars are moved in the Capital Program (CIP) once a year.

The following functional areas of the General Fund receive a designated allocation decided upon by the Mayor, Dir. Finance, and Council:

Functional areas of the $216.6 million CIP (capital reserve) and their allocations -
1. council contingency 5% ($17+ Million)
2. parks 19%
3. arts 1%
3. fire 15%
4. general fund 5%
5. transportation 45%
6. police 10%