|State of the City? Not so bad, not so good|
|Written by Don Mann|
|Monday, 22 February 2010 11:47|
Woodinville City Manager delivered his requisite "State of the City" speech at the annual Chamber of Commerce-sponsored luncheon last Thursday at Redhook Brewery and the message was mixed: some good, some not so good, some old and some new.
Perhaps four dozen representatives from Chamber-member companies were in attendance, along with a handful of the city’s heavier hitters — City Councilmembers Jeff Glickman and Scott Hageman, new Police Chief Sydney Jackson, new Fire Chief David Daniels and Director of Finance Jim Katica — as Chamber chair Gaylen Suave made the introductions and worked the room while burgers were consumed before Leahy took the podium with his PowerPoint presentation.
The city manager began by talking about the local economy, noting that new private development has been relatively stagnant for the past two years, particularly after the boom of 2007 where building permit activity set all-time city highs.
The problem, he said — and he was preaching to the Chamber choir — was that people just can’t find lending today. He did note two of the city’s current development projects — the Woodinville Auto Center on Woodinville-Duvall Road and the Medical Office Building at 140th South and 171st — were in various stages of construction and saw it as a positive sign in terms of growth, and adding property tax to the city’s lagging coffers.
"The advantages for a developer — if you can get someone to loan you money — is that prices are good for land and construction," he said.
"That’s one of the dilemmas we’re facing."
Leahy also touched upon the city’s new sign regulations, adopted by council and designed to aid small businesses.
First, Central Business District owners are now allowed one portable sign, 3 feet by 2 feet, in the public right-of-way — with a permit that costs between $75 and $125, he said.
Second, a "master signage plan" has been designed for multi-tenant properties in all commercial zones, which means only one initial approval is required for all signs, and future signs that comply with the plan will be expedited and have lower permit fees.
He spoke about the city’s "downtown master plan vision," which hopes to achieve a denser, mixed-use (commercial on the ground floor, residential on top) downtown area, noting the proposal to allow 15 more feet than is presently allowed.
Given the present state of the economy, it is a long-term vision.
Leahy then addressed city finances, and the ex-college baseball pitcher put a positive spin into his pitch: The city is still in strong financial shape, he said, with 2009 numbers ending better than expected despite declining overall conditions.
However, 2010 revenues are expected to be "flat," he said, noting that in the past Woodinville has enjoyed an approximate 10 percent annual increase in revenues.
For three years in a row, he said, Woodinville citizens had no tax increase, and this year the council even enacted an 0.85 property tax cut.
Help from above, in terms of the state budget and federal stimulus, however, has yet to be realized.
"We’ve been applying for federal stimulus funds but so far have not been successful," he said. As far as state aid, he said the following: "We won’t know for sure until the legislature is done."
He said the city will be operating this year on a $10. 6 million budget, $8.8 million of which falls under the umbrella of the General Fund. The other $1.8, he explained, falls under "restricted operations," which means those revenues are legally required to return to their respective sources, i.e., building permit operations or water surface operations and the like.
The engines that drive the General Fund, he said, are sales tax and property tax, which contribute a combined 88 percent of this year’s fiscal pie for city operations.
"We’ve had dramatic declines in sales tax revenues," he said, "but we’re making do with what we have."
Sales tax revenues in 2010 are projected to be $4.8 million — same as last year — but the lowest in the last five years.
A large part of that, Leahy said, is because of a change in state law that now recognizes a "streamlined sales tax," or where the sales tax is collected.
"It used to be collected at the point of sale, now it’s the point of destination," he said.
"For instance, if somebody buys a couch in Woodinville but it’s delivered to their home in another city, the sales tax is collected there. And that’s hurt us, because we have a number of businesses that operate with that type of delivery process."
To make ends meet, city staff has been reduced to the cutting edge, eliminating seven full-time jobs since last year, and eight the previous year.
"For us that’s a pretty big hit," Leahy said. "We’re trying to do more with less."
But, like any other outfit, it’s a zero-sum game.
Since 2006, Leahy said, Woodinville’s population has risen 5 percent, but city employees have been reduced by 27 percent, which represents a burdensome incongruity.
"It creates an additional demand on our services," he said. "We’re not doing some of the things we did before, or we’re taking longer to do them."
In addition, he mentioned the half-million dollars per year debt payment the city already owes — for the next 10 years — for past projects.
"We’ve got to come up with that payment every year out of our operating budget," he said. "We’ve got to pay that first."
But then ... the good news: Crime rates are down significantly.
"We’ve had a dramatic decrease in crime since ’06, even though we have more population and more traffic coming through our city," Leahy said.
In fact, the ’09 numbers point to the second-lowest local crime rate in the last 10 years.
"While we were cutting in other areas, we maintained our level in law enforcement," he said.
The presentation then proceeded to the ’09/’10 list of the city’s capital projects — 22 of them, seven of which are complete. Four remain under construction, six are in design phase, and five have yet to begin — with funding non-existent at this time.
The CIP was originally budgeted at $31 million out of the General Fund, Leahy said, but has come in at $28 million.
"We realized some savings because of the market," he said. "We were fortunate to get some bids that we’re substantially lower than we anticipated."
He then spoke about the sports fields, which remain on target for an April ribbon-cutting, and he spoke about the roundabouts, while awaiting additional amenities.
"Within a couple weeks the public will see some decorative elements go up, including a wooden trellis, some additional landscaping and some hanging flower baskets," he said. "It should be completely done by the end of March. Trying to keep access to the local businesses while it was under construction was a bit of a challenge. But you know the old saying, and it certainly applies in construction: If you want to make an omelette, you have to break a few eggs."