not as dire as
MONROE — The city’s larger-than-predicted starting point* for the 2020 budget will contribute toward weathering this year’s economic shortfall caused by the pandemic.
The situation today isn’t as dire as a forecast developed in April, when a $1 million drop in revenue was anticipated because of COVID-19 lockdowns. Now a few months in, the deficit stands at $138,000, from figures presented Aug. 4 by city finance director Becky Hasart.
The city made almost $385,000 worth of expenditure adjustments big and small: Reductions for 2020 included a freeze by not hiring three seasonal parks workers, freezing two of the four vacant positions** in the police department (worth $223,000 in the budget) and not pursuing a $5,000 districting demographics study.
With better sales tax revenue, and by spending less, the $138,000 gap can be covered from a portion of the city's larger-than-expected beginning fund balance*. The difference for the larger-than-predicted starting point was the 2020 budget had a “windfall” of $600,000 entering 2020, Hasart said.
The city will not need to entertain layoffs or furloughs, Hasart said.
The council is scheduled to vote on these 2020 budget changes Aug. 25.
The 2021 budget is still being developed. Monroe’s preliminary 2021 budget is now scheduled to be released Tuesday, Oct. 13 with public hearings thereafter. The city updated the schedule this week.
Of note, the city’s land purchase debt on North Kelsey will soon be over with, as it makes a final, $2.95 million loan payment next month. Monroe bought the 23 acres north of U.S. 2 from Snohomish County in 2005, and conceptualized the area as a town center-style market with small shops; the Great Recession compelled the city to drop that plan.
City may fund parks projects with own resources
In related news, the city could pay for two key parks projects with cash using Real Estate Excise Taxes (REET) generated by in-city construction activity.
Transferring $3.75 million in REET funds could pay toward adding all-weather turf at Lake Tye Park and acquiring property for a future North Hill Neighborhood Park in the Trombley area near the cross streets of 191st Avenue SE and 134th Street. The transfer would help accomplish at least one pressing task at hand: The city has an active letter of intent to acquire the North Hill park site for about $1.3 million. The city has also applied for a $1 million grant to cover most of the park site purchase, parks director Mike Farrell said.
The banks which the city works with are not giving out loans at the moment because of the economy, Hasart said.
State law limits how REET can be spent for only certain types of capital improvements in a city, with parks being one of them.
Construction continued during this year, which continued to add tax money into this account.
The future park and Lake Tye fields were packaged in a public bond tax measure which city residents would have voted on a few months ago, but the city withdrew the measure in light of the COVID-19 pandemic. The two projects were among the items in the larger East County Parks District bond request last November that didn’t reach a minimum 60 percent voter approval threshold to pass.
* - Clarification: The city is not tapping into its previously accumulated reserves, but started with a larger-than-expected beginning fund balance for its budget starting point.
** -- Correction: In an Aug. 19 article on Monroe's budget situation, it was misreported that the budget amendments will remove two vacant police officer positions, implying they are eliminated. The budget amendment freezes two of its four vacant positions, which by doing so sets the positions aside as unfunded within 2020's budget to carve out a budget reduction. The Tribune regrets the error.
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