Skatepark Presentation

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Lake Forest Park City Financial
Issues Presentation provided for the Community
Workshop Council Task Force on the Citys
Financial Future April 7, 2009
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• Lake Forest Park City Financial Issues
• (April 7, 2009)
• How does Lake Forest Park compare to other
  cities?
• Structural Impacts of statewide initiatives
• City Budget Where comes from and where goes
• Historical structural financial problems
• Additional impacts of the economic downturn (Nov.
  2007-ongoing)
• Where should the City be in 2011 and beyond?
• Revenue options, service reductions, City
  reserves?

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How does Lake Forest Park compare to other cities?
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Comparable Cities Demographics (2000 US Census)
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• There are many variations in how municipal
  services are provided
• Contract services versus City directly provided
  (staffed)?
• Police, court, jails, public works, etc.
• Typically, directly provided services are more
  quick to react and more directly reflective of
  the community
• Directly provided services require more City
  employees and thus more support.
• City provided utilities versus separate districts
• Fire, water, sewer, electric, garbage, natural
  gas, etc.
• Varies greatly by size and historic growth of a
  city

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Structural impacts of statewide initiatives

• City Budget Where comes from
• and where goes
• Historical structural financial problems

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• Historical Structural Problems
• General Fund - Property tax limitations (I-722
  I-747)
• Structural 1 property tax limitation since 2002
• 1 annual revenue increase is less than 7
  average salary and benefit increase over past
  five-years
• City adjustments
• Passport Program, three-year avg. of 175,000 per
  year (2005)
• Interest earnings from City Reserves, 115,000
  per year (2006)
• Use Capital dollars for City Hall debt, 200,000
  per year (2006)
• Street Fund Loss of and Decreasing Revenue
  Sources
• I-695 - loss of Motor Vehicle Excise Tax and 15
  per vehicle County license fee (loss of 115,000
  per year or 30 of annual revenue)
• Ongoing decrease in per capita gas tax revenues
• City adjustments
• Move street sweeping/shoulder work to Surface
  Water Fund (2005)
• Move annual street overlays to Transportation
  Capital Fund (2005)
• Establish 20 per vehicle license fee as
  Transportation Benefit District (2009)

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Additional impacts of the economic downturn
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• Economic Downturn Problems
• Exacerbates structural problems of General and
  Street Funds
• Creates new financial problems for the Capital
  and Transportation Capital Funds
• General Fund Impacts
• Some property tax (40 of budget) are now not
  being paid
• Sales and business taxes (17 of budget) are
  decreasing
• Construction and land use permits (3 of budget)
  are decreasing
• Passport program (2 of budget) revenue is
  decreasing
• Investment interest (4 of budget) is decreasing

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General Fund Adjustments Made for 2009-2010
Budget
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Street Fund Impacts and Adjustments

• Financial Impacts
• The gas tax revenue continues to decrease due to
  drivers
• driving less (tax is on gallons sold, not
  price)
• Cost of maintaining and repairing the roads
  continues to
• increase
• Thus, General Fund needs to subsidize the Street
  Fund
• more each year
• Adjustments made to Street Fund
• City implemented 6 franchise fee on water
  districts
• operating in the City and using Citys
  rights-of-way (2004-
• 2009)
• City implemented an annual 20 per vehicle
  license fee
• (2009)

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Capital and Transportation Capital Fund
Adjustments

• Due to the dramatic decline in capital revenue,
  the budget for capital projects have been reduced
  from the Six-Year Capital Improvement Program.
• The highest priority will be repayment of City
  Hall and Unsewered Areas project debt and
  continuation of the street overlay program.

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Where should the City be in 2011 and beyond?
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Where is the City today and where should we be in
2011 and beyond?

• The 2009-2010 budget was re-balanced with the
• February budget amendment. Any needed
• adjustments due to the economic downturn will
  be
• made by the Administration and City Council.
• The current forecasted 2011 General Fund
• shortfall is (500,000) without the use of
  City
• reserves.
• The solution is likely to be a combination of
• Revenue options (property or utility tax
  increase,
• long-term economic development)
• Service reductions (eliminate or reduce service
  levels)
• Use of more City Reserves (1.6 million in
  reserves)

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