Although the city of Sunnyside expected to lose more than $11.3 million in revenues over the next couple of years, the failure of Initiative 1100 and 1105 will help the budget, according to Finance and Administrative Services Director Byron Olson.
Last night he told the city council during a budget workshop the failure of the initiatives means about $300,000 can be reintroduced into the biennial budget, which is projected at more than $56 million.
Olson provided the council with an overview of the overall budget revenues at the workshop, stating the high school construction project will provide the city with some sales taxes, but he expects sales tax revenues to be moderate in 2011. Some improvement in the economy is projected for 2012, which will also help boost general fund revenues.
"Sales taxes are still underperforming, but they are underperforming less than earlier this year...I'd like to say that instead of being underwater six inches, we're underwater by two inches," he said.
Olson said people are still spending less in the retail sector and gas prices remain fairly high. As a result, money that might be spent on retail is being spent to fuel vehicles.
There may be sales tax growth in the future because of construction projects, but he anticipates 2012 as a much better year.
After speaking with county officials, Olson told the council he has been advised to levy property taxes for 2011 at the same rate as 2010. He said the 1 percent property tax levy increase can be adopted at a later date.
In 2010 property taxes collected amounted to more than $1.8 million. Olson projects similar revenues for the next two years.
He said property tax values peeked in 2009 and he projects them to remain steady in 2011 and 2012.
Business utilities are being taxed at 6 percent, said Olson. He said that is the maximum allowable tax under law.
The business utility taxes are generated from electric, natural gas, cable television, telephone and water, sewer and garbage services. The only utility not assessed taxes at 6 percent is the cable television franchises.
"Utility taxes are the one tax source that has kept up with inflation," said Olson.
He projects the city of Sunnyside will collect more than $1.85 million in utility taxes in 2011 and more than $1.95 million in 2012.
The water, sewer and garbage (solid waste) fees were later discussed, and Olson said he is proposing a rate increase of 4.5 percent for 2011 and 2012.
A portion of the funds in the solid waste budget, he said, could be used for an enhanced recycle program and city-wide clean-up program.
Council members were concerned about the public's reception to a rate increase and advised Olson justification will be needed to garner support from the citizens.
Some council members have already received calls from citizens who have learned about the proposed rate increase.
Mayor Jim Restucci said last year's rate increase was the first in many years. He said previous council members did not raise utility rates for several years, but the citizens want to know why rates are being increased and how the funding will be used.
"We aren't raising rates because we are misusing the money," he said, sharing examples of services for which the funding is used.
Olson was told he could use the wastewater treatment plant as an example of wise spending because of the awards it has earned.
The water fund is expected to lose about 10 percent ($1 million) of its revenues, the sewer fund revenues are projected at a 16 percent increase and the solid waste fund is projected at a 3 percent increase.
The jail fund generated more than $2.4 million in 2009 and 2010, of which more than $1.5 million was from the U.S. Marshal Service. Because the jail fund revenues are from non-city sources (100 percent) Olson told the council members he would like the council to consider adding the funding source to the Enterprise Fund.
"As you can see the jail fund is a money-maker," he said.
Revenues projected from the jail fund for 2011 and 2012 are expected to be at a slight decrease.
Moving on through the budget, Olson provided the council with some proposed usage for Capital Improvement funds. There are two funds, the REET 1 and REET 2.
He told council he proposes using REET 1 monies to develop a design for a streetscape plan. For that, he proposed using $50,000. Also, he suggests council use another $150,000 for renovating city hall.
Olson suggested REET 2 funding be utilized for the renovation of the softball infields at Sunnyview Park. He projects about $10,000 in funding could be utilized for the project.
Another project Olson believes would benefit the city is a new playground structure at Sunnyside's Central Park. He said REET 2 funding could be used for the project.