1.3% annual property tax/levy increase approved in Council's budget

Council approved the 2009-2010 budget 7-0 this week. They approved the 1.3% property tax*/levy lid increase 5-2, with Council members Kimberly Allen and David Carson dissenting. (pictured here)

According to the "Budgeting by Priorities" manual General Fund revenues are expected to grow approximately 3% over the next two years to $142 M. The $142M does not include the Capital Budget which is expected to grow by 8% to $234M to pay for the massive infrastructure expenses we see around town. The city has a AAA bond rating and is taking advantage of their superior rating to borrow approximately $30M for the Bear Creek Road Extension.

The biggest bone of contention on the Budget was the 1.3% property tax/levy increase. Ms. Allen and Mr. Carson could not find a clear need in the budget to justify the tax increase. The increase averages about $15/year for an above-average priced home. Most council members felt they needed the money to manage inflation. The Mayor felt he needed the money to "steady the foundation, to keep from listing one way or the other." Mr. Mayor kept talking about "a hole" Redmond government would dig if the tax didn't go through. He referenced Kirkland's problem.

Mr. Carson and Ms. Allen where more concerned about the average citizen scraping by in this historically weak economy. Even though the tax was minor, historic, prolonged unemployment and precipitous housing prices are exceptional times for citizens. Ms. Allen felt the city had enough money for the next two years to justify cutting out the property/levy tax.

Council President McCormick justified the tax increase to the cost of inflation of the city supplies. Approximately 80% of the cost of Redmond Government is paying salary and benefits to city workers. Council passed a $538,000 Human Resource "compensation program" to manage salary reviews, improve efficiencies and be more proactive. Council member Vache, who has career experience in human resource contracting felt the program was expensive but went along with the Mayor.

Council member Myers was the only council member that made a concerted effort to find specific ways to cut the budget. He recommended cutting: 1) the $207,000 cost for a "road button reflector truck", 2) $20k travel and tuition for council, 3) $100k/year for a compensation analyst and 4) a review of pub/private $570,000 spent on community events (Holiday Lights, Derby Days, etc.)

Mayor Marchione has invaluable experience in financial administration and is building an reputable and effective finance team -- Micheal Bailey, Dir. of Finance and Melissa Files, Finance Manager. The AAA city bond rating is a tribute to their excellence. Mr. Marchione's team has a goal of saving $1.6M over two years through greater efficiencies.

Council Finance Chair Richard Cole efficiently ran the "Budgeting By Priorities" program. Mssrs. Margeson and Myers were on Mr. Cole's Finance Committee. Six "Results Teams" of six staff and one citizen each ranked the budget priorities. Mr. Mayor appointed the six citizens. If citizens want to have a direct influence on council and staff in shaping the budget next biennium you may want to notify the Administration. of your interest in a Results Team.

*Mr. Bailey, Dir. of Finance wrote a Letter of Clarification on 11/25/08. He described the 1% property tax. No mention was made of the parks & safety levy lid tax increase. (.3%)

The entire budget is online here.