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2009 Budget Message

To the Citizens of Renton and the Honorable members of the Renton City Council:

I appreciate this opportunity to present to you our balanced budget proposal for 2009.

This budget strives to sustain and advance all of the successes this city has achieved—even as we face financial challenges.

Though we are facing tough economic times I’m very optimistic about Renton and the future of our city.

In my ten months as Mayor, wandering through the offices at City Hall, our fire stations, libraries, maintenance facilities, and parks, I’ve met many city employees and I am honored to work with them.  They are the true ambassadors in our community, and I appreciate their hard work and dedication.

As you are well aware, our country is facing one of the worst economic slowdowns in the history of this nation—with the mortgage crisis, high fuel costs, large declines in revenues, and increasing fixed costs.  These factors are hitting home, and as we enter a new budget cycle for 2009, we must take actions necessary to ensure that our budget remains in balance. 

This budget recognizes the fiscal realities we face—increased labor and material costs, and shrinking revenues, especially in all sales tax categories, permit fees, and real estate excise tax.

Today, money is very tight for business owners, employees, families, and for city government.  Much of the revenue we use to help pay for police officers, fire fighters, parks, trails and recreation, comes from sales tax, development fees, and new permits. All of these categories are down, which, of course, is a reflection of our struggling economy.

And we know that our residents are having a difficult time. Many fear layoffs at a time when all of their costs of living are going up. Seniors on fixed incomes are especially hit hard. I recently received thank-you cards from several Renton residents on fixed incomes who were so grateful for the small utility rebate checks they received from the city. The message is clear. Many of our citizens are struggling.

With reduced revenues, the course we must take together is clear—set priorities, reduce our expenses, and take care of the basics.  We need to do a better job of managing tax dollars, managing programs, and managing our assets.

This is a time for focusing on the city's core responsibilities and doing those things well. This budget emphasizes core services, eliminates duplicate functions, and stresses efficiency.  Most importantly, it challenges the status quo and takes a fresh look at how our city provides its core services.  

As you know, we have already made significant reductions to our 2008 operations to address the revenue shortfall we’re currently experiencing. Our department administrators and their directors have done a great job in reducing overall expenditures.

Despite the economic downturn across the nation and our region, we have accomplished a lot since January.

  • The population of our city has grown by over 25 percent and Renton is now home to over 80,000 residents. We welcomed new residents from the Benson Hill area and other neighborhoods adjoining Renton that elected to join our city.  Renton is one of the fastest growing cities among the 20 largest cities in Washington.  Our population has approximately doubled over the last 18 years, from about 40,000 in 1990 to over 80,000 this year.  With the recent annexation of the Benson/Cascade communities, Renton is the 11th largest city in the State and the 5th largest city in King County.
  • We have reorganized parts of city government this year to make it more responsive and efficient.
  • We've delivered on our promise to keep our city beautiful, and we have significantly enhanced our code enforcement efforts.
  • We have emphasized public safety, and we’ve made measurable progress in preparing our citizens in the event of a major disaster.
  • We have continued our efforts to revitalize downtown Renton as well as our neighborhoods.

Even as the region’s economy declines, locally we continue to see positive change.  New stores are opening every month at The Landing, including last week’s grand opening celebrations at Regal Cinemas.

We participated in a number of significant ribbon-cuttings this year – from the Federal Reserve Bank of San Francisco’s new Seattle branch headquarters, to the amazing Seattle Seahawks’ Virginia Mason Athletic Center.

We have made progress on transportation projects and have several major improvements underway for our roads and other infrastructure that provide the basic foundation for our city.

To do our part in keeping our environment clean and healthy, we have reduced paper waste, purchased one of the region’s first hybrid boom trucks, and will soon launch a comprehensive effort to expand recycling and waste reduction.

Our department heads are working together to find more efficient ways of providing service to our citizens—with fewer dollars.  We are not letting budget problems get in the way of strengthening basic services, and we’re making progress. 

Communicating with our citizens is also a priority and we continue to find new ways to keep our residents well informed and engaged in city-related issues.

One of our goals is to meet the service demands that contribute to the livability of our community.

I mentioned our successful annexation of the Benson Hill area and the high quality services that we have been providing to the residents and businesses since March.  We sponsored a community celebration to welcome new Benson Hill residents and have conducted some successful outreach in the community.

We are working with the owner of the Cascade Shopping Center on redevelopment opportunities, and have facilitated several public events at the Center to encourage neighborhood involvement in helping to improve the community.

Under the leadership of our Police Chief, we created a new inter-departmental initiative to ensure measurable results in code enforcement.  We have achieved results, and we continue to make measurable progress.

After years of trying to find a solution for the boarded-up Don-a-Lisa motel in North Renton, we successfully collaborated with the Bryant family to demolish the building and make other improvements to the property, and we’re working with them on future redevelopment plans for the entire site.

We are resolving code compliance issues within 14 days, with a majority being resolved through voluntary compliance.

Our efforts to recruit new employers and high-quality development to Renton continues to be a priority.

We merged the Economic Development, Neighborhoods, and Strategic Planning Department with Development Services to form the Department of Community and Economic Development.  This has helped us enhance our efficiency and meet our goal of streamlined land use regulations, sound urban planning, and economic development.

Earlier I mentioned the new Regal Cinemas at The Landing.  Not only is it a spectacular complex with 14 screens and more than 2,300 seats, Regal is known to invest in the local community.  Their generous contributions to Newspapers in Education, Communities In Schools of Renton, and the Renton Community Foundation with proceeds from their recent grand opening events, are greatly appreciated. 

We continue to see new retail stores and restaurants opening at The Landing, and the residential components are expected to continue to change the dynamics of South Lake Washington.
We have begun working with developers and The Boeing Company on the second phase of development there, which may include high-quality office buildings and a hotel.

We are continuing to revitalize our parks and neighborhoods, which in turn strengthens our community.  We’ve made several improvements to our parks, trails, and open spaces, including Burnett Linear Park, Cedar River Park and Springbrook Trail.

City-sponsored special events continue to play a big role in improving the quality of life in our community. We enjoyed record attendance at IKEA Renton River Days and at the 4th of July Celebration and Fireworks at Gene Coulon Memorial Beach Park.

We also embarked on some significant road projects.  Our work on Duvall Avenue is going well.  Once completed, we will have widened the lanes; added a center two-way left-turn lane, curbs, gutters, sidewalks, and bicycle lanes on both sides of Duvall; and relocated the overhead power lines underground. The City Council and our staff have worked very hard to help mitigate the impacts this closure has caused to some of the local neighborhoods. 

Public safety is the cornerstone of a civil society and is critical to the health and vitality of our community.  Making our neighborhoods and community feel safe, and creating a better environment for people to raise their families, is vital to the economic health and future prosperity of our city, and continues to be my top priority. 

We emphasized the need for people to feel safe when they are in their homes and when they are out in the community.  We launched a comprehensive plan to reduce criminal activity and enhance overall safety throughout Renton, including additional security, increased patrols, security cameras, enhanced code enforcement efforts, and significant emphasis on traffic safety.

We have created an interdepartmental anti-graffiti and vandalism task force, which we will roll out to you in a few weeks. A state grant to develop and implement a comprehensive plan to remove and prevent graffiti and vandalism in the city has been awarded to the task force, which will help further the success of the program.

We launched an effective photo enforcement program and installed six red light cameras at four major intersections and three speed zone cameras in our school zones.  Since the installation of the photo enforcement cameras in June, we have issued more than 4,500 citations.

And our continued emphasis on Renton Heart Month, to help educate our employees and the public on best ways to respond to heart-attack warnings, resulted in saving the life of one of our residents.  I want to offer special thanks to Shawn Daly, Senior Services Coordinator at the Renton Senior Center, who responded quickly when a man suffered a heart attack at the Center, and was able to bring him back to life.

We took some important steps to meet our goal to manage growth through sound urban planning.

We ascertained our community’s needs for library services, evaluated the current level of services that we offer through the Renton Public Library system, and have provided you with future library options to explore.

We are finalizing the Trails and Bicycle Master Plan Study and the Urban Forestry Development Plan. We continued our efforts to update the Shoreline Master Program, and continue to work with the Highlands Task Force. We are also working with the Renton Housing Authority and private property owners to promote re-investment, redevelopment, and other improvements in the Highlands Sub-area.

We completed the Airport Layout Plan and airport leasing policies, and updated the Airport Master Plan.  We successfully extended our lease of Apron B at the airport with Boeing, furthering our strong relationship with The Boeing Co. and their long history in our community.

FINANCIAL SUMMARY

The total 2009 proposed expenditure budget is $252 million, of which $171 million is for city operations, $57 million is for debt service and proposed capital projects, and $24 million represents internal transfers that are offset by revenues.  This represents a 2% increase over the 2008 adopted budget.  The total revenues equal $245 million.  The difference between revenues and expenditures of about $7 million will be covered by prior year fund balances for capital equipment and projects.

Of the $171 million operating budget, $101 million is for General Government Operations.  These are activities primarily supported by tax revenues.  With the slowing economy and a high rate of inflation, our preliminary projections indicate that maintaining current services in General Government Operations will result in a deficit of over $5 million in 2009.

In order to make up this budget gap, I asked each department to carefully scrutinize all expenditures, focus on maintaining core services, and provide options that reduce their budget by 7%.  It is also our goal to achieve efficiencies and become as lean and highly functional as possible without making any reductions to our current staffing levels.

Departments worked hard to comply with this request with the primary goal of serving Renton’s residents.  As a result, the proposed budget leaves 36 authorized positions unfilled and includes reductions in various services.  I would like to thank our administrators for their outstanding efforts in helping us formulate this budget.

The proposed budget also reflects cost increases for specific purposes.  These include the cost of the Fire District 40 contract, an increase in equipment costs in the police operating budget, a full year’s cost for annexation-related personnel, and a proposed transfer of $1 million to fund capital projects.  Funding for these increases will come from the Fire District 40 service contract, a full year of revenues from Annexation Sales Tax Credit, and continued growth in the share of our property taxes that comes from new construction. 

With these adjustments, we will be able to balance our operating budget with current operating revenues, and use prior year fund balances only for one-time capital purposes.

CAPITAL FUNDING

Of the $57 million in proposed capital projects, over $37 million is for transportation and utility projects, $5 million will be used to meet debt service requirements and about $13.5 million for other projects. 

The single largest capital project is the council-authorized acquisition of the parking garage at The Landing for $12.5 million.  As previously discussed, we have very limited new resources for general capital projects in 2009.  Rather than incur more public debt for this garage, I am recommending that we delay the construction of the new park maintenance facility and transfer the $7.5 million we have in reserve for this project.  In addition, we recommend that we transfer $2 million from the anti-recession reserve fund and $3 million from the undesignated fund balance in the Risk Management Fund to fully fund the garage acquisition. 

In addition to the garage, we are making progress with several south county cities in a joint venture to build a new regional jail, which is required since King County will no longer provide us with needed jail space after 2012.

The remaining $3 1/2 million includes the extension of the current maintenance facility lease and performance of major maintenance needed for various city facilities and parks.

As I mentioned earlier, these hard economic times challenged us to set priorities, take care of the basics, emphasize core services, and focus on efficiency.  We challenged ourselves to accomplish more with fewer dollars—the same challenge facing family budgets and local businesses.

As you know, state law caps our revenue growth in property taxes to 1%.  This means that the actual amount collected from the same properties the previous year may not exceed 1% in total collected dollars. However, we recognize the fact that many taxpayers actually incur a much higher increase than the 1%.  This is due to county assessments that have tended to increase residential assessments while reducing the assessed valuation on commercial properties. This has placed an extra burden on the average homeowner.

Other factors contributing to increased property taxes are voter-improved increases for special purposes like Medic One and school levies and bonds.

The portion of the property taxes that go to the city represents 30% of our General Operating revenue base, which pays for police, fire service, parks, roads and other city services. Other revenues that contribute to the cost of these services come from retail sales, new home construction, permit fees and commercial development, which are all currently down. This is why the state of the economy has such a significant impact on the ability of cities to maintain historical levels of service.

Our state has one of the most complex property tax systems in the country and we need to continue to find creative ways to give our taxpayers the best value for their investment. Renton residents and businesses have enjoyed a high level of service.  While we will continue to try and preserve these service levels, it is inevitable that there will be some impacts when revenues decline.
I would like to share with you some of the cost-reduction and efficiency measures that the departments have proposed.  A more detailed explanation is available in the budget highlights section, which will also be available on our website.

  • In our police department, we carefully scrutinized all the proposed cuts to ensure that we did not compromise our ability to keep our community safe.  Still, the proposed budget reduction for the police department will leave nearly eight positions unfilled, half civilian positions and four police officers.  The loss of four police officers means that we have to eliminate the School Resource Officer program after the current school year.  If the economy does not improve and we are forced to extend the freeze on these positions, we will work closely with the school district to find ways to ensure safety and a police presence in our schools, or identify other funding sources for these officers as has been done by most other school districts. 
  • While there is uncertainty regarding the outcome of Initiative 985, it’s been our plan to continue the traffic emphasis patrol using any excess revenue from the photo enforcement program.  However, passage of I-985 will likely result in the discontinuation of this program.
  • With the addition of the two substations and increased police presence at the Transit Center, we expect improved security in this area and throughout our downtown.
  • We propose adding funds for new wireless aircards since Valley Communication’s technology is changing, and we need to ensure vehicle radio modems stay current.  We also propose adding an officer for the regional auto theft task force.  There will be no budget impact for this since it is funded through state money.
  • Our police cadet program has been very successful and, while this is not part of the proposed budget, we would like to use salary savings from police officers who will be deployed overseas, to continue a limited funding of this program.
  • The Fire and Emergency Services Department has filled 12 vacant positions in 2008 and these firefighters will join Response Operations by the end of this year. In 2009 the department will hold nine retired firefighter positions vacant and reduce capital equipment to achieve the budget reduction target of over $1 million.  The department will also reduce the need for overtime. There will be no impact on response times
  • The Department of Community and Economic Development (CED) has not filled a number of vacant positions authorized this year, which helped the city manage its 2008 revenue shortfall and balance the 2009 budget.  Overall, this division is holding about five positions vacant, with limited service impacts since development activity is currently slow.
  • This department does propose adding $25,000 to start the community Arts and Cultural Master Plan process in 2009 and complete it by 2010. A community with a strong arts and cultural environment enhances quality of life, generates jobs, adds to economic vitality, enhances tourism, and ultimately increases business for restaurants and hotels.  We are also proposing that we join eastside cities and participate in mybuildingpermits.com to offer online permitting that increases efficiency and makes it easier for the public.
  • In 2009, we will launch the Community Planning Initiative—a  process that engages the community and enables residents, businesses, and others to help define the future of their neighborhoods.  This program will help us identify, prioritize, and deliver what is important to our neighborhoods and community by encouraging broad-based involvement in the review, development, and integration of our comprehensive plan and supporting policies.
  • In the Community Services Department, we will reorganize our staffing, and hold vacant the recreation manager position and a custodian position.  It’s necessary that we reduce the funding for our community events, community centers, and recreation facilities.  We are also proposing reductions on contracted geese control; tree removal; new flower pots, including flower baskets in downtown; and park maintenance supplies.  Free concerts at Coulon will be reduced from eight to six per year, and we will reduce part-time and seasonal employees, supplies, and publications.
  • We propose adding a limited-term outreach librarian for greater service to annexed areas, using funding from the King County Library System.
  • In the Parks division, we will add funding for some additional equipment, which will provide greater efficiency, more cost effective maintenance, and reduced staff labor costs.
  • The Public Works Department will be holding five positions vacant, including two street maintenance positions.  The department will also reduce minor equipment purchase and repairs.  Leaving two maintenance positions vacant will affect the city’s ability to maintain existing levels of service, particularly given the increased area of the city.  To offset some of the lost productivity, we are recommending the acquisition of two backhoes and a dump truck to allow separate crews to operate in different parts of the city at the same time.
  • The Finance and Information Services Department (FIS) will reduce its baseline budget by 7% and will leave three positions vacant.  A majority of the reduction will be accomplished by delaying various information technology projects.
  • As you know, we are proposing to convert the City Attorney service from an outside contract to in-house staff for greater efficiency.  This will add nearly 12 FTE’s to our workforce without increasing current costs to our taxpayers. 
  • The proposed budget will reduce the legislative professional services account by 66% and Council travel budget by 45%.
  • The Administrative, Judicial, & Legal Services Department, which includes the Mayor’s office, will hold 2 1/2 positions vacant, bringing the department’s staffing level to a pre-annexation level.  The City Clerk’s office will add $20,000 to cover anticipated increased voter registration costs due to annexation, and $12,500 for an electronic records/agenda packet processing software, to increase efficiency.

UTILITY FUNDS

The water, wastewater, and surface water utility funds are accounted for and budgeted for separately, but are managed as a system in accordance with the city’s financial management policies. 
We worked very hard to keep our rate increases as low as possible, and the proposed rate increases for 2009 are lower than what was set forth in 2007. Currently the city is proposing the following rate increase:

  • Water & Wastewater will increase 4%, with no increase for Surface Water.
  • King County Metro Wastewater Treatment will increase their fees by 15%, along with a $1.16 per month fee to offset the impact of Metro service on the city’s wastewater utility. The county charges appear on our utility bills.

These proposed rates would provide the resources needed to add one FTE in Surface Water for NPDES permit requirements—another one of those federal, unfunded mandates.

Garbage service for our citizens is provided through a contract with Waste Management. We recently negotiated a new contract with Waste Management to provide garbage collection and recycling services.  In 2009 Waste Management will institute a rate increase—their first in eight years.  This increase is primarily a result of new solid waste/recycling collection practices and higher operating costs.  We have worked hard to minimize this rate increase and provide additional choices for our residents to reduce waste and recycle.

In conclusion, we have found many ways to reduce our costs while minimizing the impacts to our citizens.  This budget makes some necessary adjustments but preserves core services.

This is a budget that faces some uncomfortable facts. Like you, I wish we were still in good times.  But tough times pose a special challenge that we need to meet. I appreciate the hard work of our department heads and employees who have helped us meet these challenges. I also want to thank our Council members for their guidance and input as we worked on this budget.

We will set priorities and continue to build a sound foundation for our city.  We will continue to make progress on our Business Plan and the goals that we established together with Council. Our budget will ensure our city remains committed to public safety, economic opportunity, core city services, and maintaining the quality of life that we are known for. 

We will be presenting you with more specific details on this budget proposal and welcome your feedback, concerns, and questions.
Thank you.

Denis Law
Mayor