Dear Honorable Mayor, Members of the City Council, City Staff and the Residents of
Long Beach:
It is my privilege to submit for your consideration our recommended Annual Operating Budget for the City of Long Beach for Fiscal/Calendar 2009. In accordance with the City Charter and Washington Budget Law, this is the proposed financial plan to meet the needs of the residents of the City of
Long Beach and the goals of the Community as expressed by the Mayor and City Council. The budget, as recommended, is balanced as required by Washington Budget Law. Furthermore, it is presented in an accepted and understandable format as requested by the City Council. Finally, it is our intent to submit and manage the budget in the most open and straightforward manner possible which will allow consistent and careful management of all of our resources.
The Budget Process is the single most important task the City Council will do each year. It gives direction to our staff and community, not just for the coming year, but in many instances, for years to come. We should always take this responsibility seriously, devote the time needed to the process and establish guidelines to be used in the process. Always remember, our goal is to make our community a better place to live, a commitment that never ends and is always changing, thus we need to always look forward, plan, set goals and develop budgets that reach this basic and realistic goals.
BUDGET INTRODUCTION AND REVIEW
I am pleased to submit the 2009 Preliminary Annual Budget for the City of
Long Beach for your consideration.
Following are selected highlights from the 2009 preliminary budget:
PERSONNEL ADDITIONS/CHANGES
Staffing levels stay the same as last year save the addition of a Code Enforcement Officer for a limited number of hours each month.
Additions to staff proposed in this budget include:
ü None for the budget year of 2009.
Total FTE positions in the City are 27 which include an office staff position at .8 and the municipal judge at .2. There are 29 volunteer firefighters, 2 reserve police officers and 6 summer part-time staff.
MAJOR PROJECTS for 2009
Anticipated Street Improvements:
As the 2009 Budget is being developed we anticipate the Washington Department of Transportation will be doing a major maintenance project to the downtown portion of
Pacific Avenue. This involves the grinding off of the old asphalt road bed two inches and adding two inches of new asphalt to the road surface. In addition the handicapped crossings will all be brought up to the most recent Americans with Disabilities Act Standards.
We also hope to be able to do some additional work on some of the smaller side streets within our community. This work will consist of asphalt overlay work or chip-seal work, but we do not plan on scheduling this work until we are able to see if the prices of asphalt are low enough to make this work possible.
The State is suffering significant revenue shortfalls in gas tax and is looking at the possible delays in other road grant work until 2010 or 2011. Add to the revenue shortfall the rapidly increasing costs of asphalt and fuel, and you have what has been in the past basic road maintenance, becoming a major project in terms of cost, so now we have to just wait and see how much funding is available for road maintenance.
Water System Improvements:
We have begun the process of building a new membrane water plant which will take approximately two years to complete. The process started in the summer of 2008 with the collection of data which is followed by a pilot test which should last about four months.
The bulk of the design work and the bidding process should take place during the budget year of 2009. During this budget year we will be working on several grants and low interest loans so all of this will be in place by the time we go to bid on the project.
We are going to going to continue to add a number of valves in the distribution system in the Seaview area so we do not have to shut so much of the system down when we have to work on it or have a major leak.
Our meter replacement program will continue this year as in past years and we have to begin to work on developing a water conservation program mandated by the State of
Washington.
Finally, we hope to start to develop the Rickkla Creek raw water source by beginning the construction of an eight (8) inch line out to Rickkla Creek from our water impound area. All of this work will be done by City Staff and needs to be completed by 2014 in order to maintain our water rights to his raw water source.
Sewer Treatment Plant:
This year there is no major work in the plant.
Sewer Collection Line Renewal:
We are developing a program to review our sewer collection system to the north end of
Long Beach and develop a plan on the rebuilding of our lift stations that serve the northern half of our community. This will require an updating of our system engineering analysis and the development of a plan for replacement and the funding of these projects.
Park Additions and Improvements:
Repair and paint Train Depot – The exterior of the Train Depot has begun to show serious signs of dry rot and the siding needs to be replaced. We hope to be able to do this with similar siding made from Hardy Plank, but the siding standards need to be updated in order for us to do this project. The estimated cost is $21,000
Repair and paint south end of City Hall – The south end of City Hall is in need of a complete rehabilitation due to dry rot. Staff will do this project and we estimate it will cost $5,000.
Boardwalk repair and rehabilitation plan and start work - In the fall of 2008 we started a program to have an engineer review the condition of our 20 year old boardwalk. This work was completed and the basic condition is fairly good considering the age of the boardwalk. It now looks like we would spend an estimated $22,000 for materials and do the work by our staff in order to save the City money.
We anticipate the start of the new trail in
Dune
Park with interpretive signs for ship wrecks. We have budgeted $7,500 for the beginning of this project.
In anticipation of the need for new playground equipment we have established a replacement fund and plan on setting aside up to $10,000 for the next five years. These funds will be used to purchase new playground equipment to replace equipment that is not useable any more.
OTHER CAPITAL ADDITIONS/PURCHASES
Information Technology:
We will be looking to upgrade our server in the IT system. In addition we will start to upgrade our accounting software. The upgrade to the accounting software and this will be a two to three year process. We will be looking at the purchase server to replace our old unit which is now about seven years old. In addition, we will be purchasing a new recorder unit to replace the unit we now use which belongs to the county. We will also be looking at the purchase of new equipment for our camera monitoring system. We are looking for a Homeland Security Grant to purchase mobile data terminals (MDT’s) for the police cars.
New Vehicle/Equipment Purchases:
We will be looking at starting to set aside money for the purchase of a new street sweeper. We will try to develop this fund on a five year basis setting aside about $20,000 a year to have at least $100,000 for the purchase.
Miscellaneous Capital Items:
We are looking to purchase a backup generator for the storm sewer system. This unit is estimated to cost $47,000 for a generator for
11th Streetstorm water pump station.
FINANCIAL CONDITION OF MAJOR FUNDS
Current Expense Fund:
In this past budget year, 2008, we once again very conservative in our revenue estimates but we have been fortunate in having another good year. Thus we are placing more money in our Current Expense Sinking Fund to continue to protect us in the future. This will leave us with about $700,000 in reserve, just five years ago the only reserve we had was what we had in the carry-over from one year to the next.
Our sales tax revenue in 2009 will likely return to the levels prior to the construction boom we have experienced the past two years. If we do have another major project we will see more revenue, but as of this time we should continue to be conservative in our estimates.
Property tax will be one percent plus the new construction, plus in 2009 we will see the addition of TrendWest to our property tax roles. Our estimates for property tax thus reflect this addition along with the one percent normal addition as allowed by State law.
Building permits fees will most likely decrease in 2009 given the very uncertain times our economy now faces. Building has also been a significant contributor to our sales tax revenues and the decrease has already been accounted for with very conservative projections for our sales tax revenues in 2009.
We believe all of the other revenue sources will remain flat or stable in the coming year so we have taken this into consideration in making all of our revenue projections.
On the expenditure side we see most of the areas of the Current Expense Fund remaining stable with only slight increases. We will see the addition of a $20,000 multi-year commitment to the fire station and $25,000 commitment to the development of the
Dunes
Park, which will also be a multi-year project requiring annual funding.
Street Fund:
The Street Fund revenue will remain stable, but we have moved the real estate excise tax to its own fund, Capital Projects Fund, per state law. This money will be spent on paving and street upgrade work.
Utility Funds:
Our three utilities are all in fairly good shape financially. In the water utility we have been studying our rates to determine what we need to do to cover the cost of our new water plant. A rate increase will be needed no matter how we do in obtaining grants for the construction of a new water plant, but if we are able to obtain at least $1 million in grants we should be able to keep the water rate increase within 5% for the coming years.
One special note, the base rates within the water utility are cost reflections of primarily capital costs, and the water unit sales costs are a basically the reflection of the costs of water production.
In the sewer utility we need to look at a small rate increase to begin to build a reserve to start working on the upgrade in our collection system.
The storm sewer utility is in fairly good financial shape and we will have the new system comprehensive plan update to look for future development in the storm sewer system.
CONCLUSION
2008 is like the previous year in that growth has impacted the budget. We have seen a significant increase in sales tax due to major construction during the past two years but we can expect that building boom to come to a stand still as the economy becomes worse.
Overall the City remains in good financial condition for current operations, but we must be conservative in our estimates for 2009 and the future, as the economic condition of the entire country is now in a precarious position. In a normal economic downturn we could plan on an increase in visitor activity to our community, but this downturn is so significant we are going to have to just “wait and see” what this coming year brings.
The current economic downturn may prove to be like others in the past, but with soaring gas prices, the loss of jobs and the overall general drop in consumer confidence, we may see some difficult times. So we can be both optimistic, but at the same time cautious as we move forward in to the new fiscal year.
A Giant Thank You for all of the Hard Work
I want to thank our Finance Director,
David Glasson, for all of his hard work in developing this budget. It is a giant task to make sure the draft budget arrives with all of the funds balanced and all of the transfers, salaries and the many budget items that are split between two or more funds, are all in balance and match. It is a major piece of work, and David did an outstanding job of putting this together again this year. In addition we are making many changes in our financial process and he has done an outstanding job of dealing with all of these changes. Please remember he gets this work done while continuing to get the rest of his regular monthly work load completed.
I also want to thank each one of the department heads, and their staff who worked very hard to help develop their budgets. A special thanks to
Don Zuern, our Water and Sewer Supervisor, Mike Kitzman, our Streets and Parks Supervisor, our Police Chief,
Flint Wright, for all of the hard work they have done in preparing our budget. Finally, thanks to Everyone….A job well done everyone.
Respectfully submitted,
Gene Miles
City Administrator