Blaine can anticipate several reductions to public services as the 2011 budget is projected to fall short of expenditures.
In a special work session Monday, Blaine city staff unveiled a $4.4 million prelimary general fund budget – about 3 percent less than the 2010 budget – with a total of $4.8 million in projected expenditures.
Blaine finance director Jeff Lazenby said the decline in revenue is largely attributable to a slow construction industry, a decrease in total collected property taxes and revenue from building permits. Sales tax from constuction projects constitutes nearly 25 percent of all general fund revenue.
During Monday’s meeting, staff also noted that almost 50 percent of expenditures in 2010 stemmed from legal costs ranging from the city’s appeal of Whatcom County’s urban growth area cuts, to lawsuits by former airport lease holders, to appeals by environmental groups over the city’s critical areas ordinance and Fire District 21’s appeal of a 48-unit development on Bell Road.
Lazenby also said if state initiatives 1100 and 1105 are approved by voters in November, it would cost the city about $130,000 in forgone liquor excise tax revenues.
“The bottom line is we’re projecting less revenue in 2011 than in 2010 but if you look at this from a state and national level, it’s not out of line,” Lazenby said. “We’ve not seen anything increase, unemployment is still high and the housing market is still in a slump. The good news is we’ve still been able to meet many of our priorities.”
To cut costs, city staff will be considering an approximate 20 percent cut to the city’s street improvement fund, a 17 percent cut to funding of the Blaine senior center, a 14 percent reduction in funding to the Boys & Girls Club and the elimination of the city’s teen court and domestic violence commission funding.
Staff also looked into the possibility of increasing utility taxes and user fees as well as decreasing travel and training for employees, deferring the purchase of new equipment and decreasing the city cashier hours by two days.
They also considered introducing a 1 to 3 percent hike in the amount of property tax revenue they can collect.
Washington state law allows cities and municipalities property tax revenue by 1 percent per year but because the city of Blaine hasn’t increased that during the past two years, they have accummulated “banked capacity” or the ability to add the equivalent of three years of tax increases.
The council will host another budget review hearing November 8 and 22. It is scheduled for adoption by council on December 13.