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%

5/9/07, Impact Fees, Can growth pay for growth?

The sketch above is of a "roundabout". They will be installed in No. Redmond in place of stop lights or 4-way stops.

Last night, the Redmond council had a joint meeting with the Sammamish council to discuss, in part, transportation funding. Though, some of the discussion points were hard to pick up on "webstreaming" TV, I 'll do my best.

For me, a take home message was that Sammamish is capturing 97% of the transportation costs of their growth projects with "impact fees" on developers. On the other hand, Redmond is capturing only 67% of our transportation costs of our growth projects with impact fees. Thus, one conjectures that 33% of the cost for developing the road infrastructure in Redmond's of new developments is distributed to the citizens. IS GROWTH TRULY PAYING FOR GROWTH? Council will look at this closer in a future study session (especially with attention to having to borrow to improve 116th St).

The mayor's rational for this larger burden on the citizens (and less burden on developers) was: 1) we want to get a good start launching this new city-wide impact fee structure with gradual updates and 2) the pending 2008 Overlake Plan will be a good first update point. Citizens will need to stay on top of the city to see these updates take place.

Projected transportation costs have gone up significantly in the last 3 years. In 2004 costs were $251,000,000. Costs have escalated to $345,000.000 in 2007. Of the 2007 costs: $204M are non-impact fees (borrowing and capital funds?) and $141M are funded from the new impact fees.

Council and Administration figured $141,000,000 in impact fees are needed to pay to balance the budget and for needed improvements, including:

NE 70th Street (by Whole Foods & the trailer park),
the NE 124th & Red-Wood Road intersection, and
the NE 124th & 162nd Place NE intersection.

Council was vague about long-needed NE 116th improvements and various "roundabouts" (see photo) planned for North Redmond. Several months ago, staff recommended borrowing to pay for this work. Council meets for another study session in the near future and hopefully will give clearer directions for fund sourcing.

Council very quickly reviewed the total impact fee of $12,550 a developer would pay for the average lot. The combined impact fees for schools, parks, fire, and transportation are ~ $12,550/lot, based on the proposed fees, below:

$2750 - school impact
$2500 - parks & rec. impact
$6900- transportation impact
$ 300- fire impact

Several councilmembers were thoughtful and considerate of the analysis & hard work the planning commission contributed to the deliberative process. Mr. Cole follwed by Mr. Marchione were most supportive and Mr. Robinson and others made note of commissioner's input. As I recollect, Mr Resha - Capital Program (CIP) lead and a transportation consultant -- was relatively quiet throughout the conversation.

The Principal Planners did the best job they could explaining the commissioner's point of view but it would have been faster, more effective and useful to have a commissioner present to voice their 3-1 majority FOR fees.

BACKGROUND: In 1996, seven Districts were structured to implement impact fees. 4 were commercial districts - all with the same fee. 3 were residential districts with Grasslawn and ViewPoint neighborhoods the lowest fees.

TODAY, staff is proposing one city-wide impact fee for all neighborhoods and commercial areas. All houses pay the same fee. One district is common in cities with 3-4 mile trip lengths, such as in Redmond.

12/18/06, Will Resha and McCormick lead on CIP?

6/14/07 - FINAL UPDATE - SEE BOTTOM - YES Mr. Resha did lead. Thank you, John.
Updated on 1/9/07 - see bottom
Updated on 4/27/07 - bottom of blog
My intent is to address with specifics the cheap, symbolic, budget cuts several councilmembers have dreamt up to try to fill a $2.8M gap left from the failed levie lid lift vote. Can you believe city officials would go so low as to cut "Derby Days" and "Redmond Lights" for a quick fix? It' appears it's their way of 1) "getting back" at the electorate for the levy defeat, 2) "proving their seriousness" for fire and police deficiencies, 3) distracting the public from scores of millions of dollars of idle long term unallocated cash reserves 4) last minute budget 'planning' and 5) dealing with their guilt of over-spending on City Hall.
The new City Hall will ultimately cost us $70M over 30 years. How could these officials (with the exception of Ms. Allen and Mr. Robinson) be so remiss in their planning to now call for $300,000 in cultural program cuts to fill their gap? It doesn't have to be this way.Mayor, Councilmembers Jim Robinson and Kim Allen say cuts aren't required this year or next if we re-work our long term capital allocations. Cole, Vasche, Resha, Marcione and McCormick think otherwise. Resha is re-working the CIP (Capital Improvemnent Plan) for a new proposal in January. Will Mr. Resha reassess and bring new perspective to the table? Will Council President McCormick adjust and lead?
Stay tuned.
1/15/07 update: In last week's review of the CIP, John led the discussion. With $32M in unallocated capital funds (that can be used for non-capital operations) John suggested the Admininstration (mayor) allocate unused 5% transfers to areas of more immediate needs, like parks. The Mayor side-stepped and the rest of council was mute. The failure of the city to negotiate for the Perrigo Heights forest was still too fresh for them. Thanks for trying, John and thanks for your public service. We will miss you on council.
1/9/07 update: In the Council Study Session tonight, Mr. Resha boldly demonstrated open-mindedness, flexibility and resolve to allow the council-at-large time to thoroughly study C.I.P. options. He formed a sub-committee with Ms. Allen and Mr. Marchione to study and and review C.I.P (capital budget) options. Stay tuned.
4/27/update: BIG BREAKTHROUGH on how council is starting to think about and utilize our CIP - capital fund program. Council President Nancy McCormick demonstrated her power at this week's study session on their proposed August, 2007 levy lid lift. She is recommending tapping into the wealthy CIP to fund maintenance & operations (M&O) for parks... This act alone would lower the proposed parks levy assessement from 10 cents to 5 cents !! At $121,000/penny assessement the levy would be reduced by $605,000, if I have my numbers right. Thank you, Nancy! Mr. Resha changed his mind and agreed with Robinson, Allen (the leader), Vache, and Marchione.