10/31/2007: "County Budget Message: Not So Good"

The Draft Budget has been presented to the County Council, and while it is balanced, and will maintain the current level of services, County Administrator Pete Rose cautioned that “It is doubtful that the service level can hold for an additional year.” Which is to say, it will not get any better next year.

The proposed budget total is $59.6 million, and Rose said that the actual “moving parts” of the budget amounts to about $38 million dollars in capital and current expenditures after subtracting for double-counted transfers and reserves.

the capital budget, Rose said, has “Hit ‘the Wall’,” and he encouraged the council to consider levying the optional second 1/4 percent Real Estate Excise Tax (REET) to cover urgent facilities needs.

Rose sent the proposed 2008 budget document to the County Council late Friday, along with a budget message entitled: 2008 Budget Message -“Beginning to Look Ahead.” The draft 2008 general operating budget (“County current”) increases 5.4% over last year’s to almost $14 million. Much of the increase is attributable to payroll costs: larger state-mandated contributions to retirement funds, higher medical insurance costs and contractual salary increases for county employees.

Other proposed increases are sparse. The Assessor’s office will be able to hire an additional appraiser to reduce the backlog of annual property appraisals and new construction appraisals, and money is set aside to deal with the Assessor’s changeover in the cartography position and in new mapping software.

The Parks department will receive an additional $70,000 to deal with maintenance and capital needs at the four additional parks it takes over this year. Rose noted that the increase, “still keeps this valuable service on the edge of adequate funding.” The additional parks are located at Eagle Cove (San Juan), Pear Point (San Juan), Lopez Village and Lopez Hill.

The third area receiving new funds is Information Systems, where a $150,000 budget increase will allow the County to begin updating its computer systems every five years, rather than every 6-1/2 years as well as paying to support some technology systems and applications where the county has been running with too little or no support. The County’s Information Technology Committee has warned that some internal systems in the older machines are no longer supported by the manufacturer. Rose commented, “Technology is essential in keeping us efficient at our jobs and is probably the only way we are able to keep up with service demands as well as we do.”

The County Administrator said he was pleased to advance one of the County’s priorities: affordable housing. He proposed that funds from a recording fee that state law earmarks for affordable housing and homeless programs, be used to hire an affordable housing coordinator for up to two years. During that time the coordinator would seek independent funding and develop a more comprehensive strategy for affordable housing (workforce, senior, low-income) in the County. “Bricks and mortar” grants in these programs will also remain available.

In looking to the future, the County Administrator urged the Council to “Worry less about finding efficiencies than finding effectiveness.” He wrote, “We get the government we pay for, and government on the cheap may not be worth paying for.” The cautionary note about the General Fund was described to the Council on Tuesday as a “controlled descent”. Rose recommended that the Council and staff spend the first several months of 2008 analyzing budget sustainability and planning how to adjust it in the future.

Turning to the capital budget, expenditures will be highlighted by two projects: Design work for the repair of a wall at the courthouse which has been leaking since the 1980s and the restoration of the historic court house. The County won a $330,000 state grant to do the restoration, but it must match the grant dollar for dollar. The proposed budget sets aside 2/3rds of the match in 2008.

Among the capital projects postponed or left unscheduled for lack of funding:
• Actual repair of the water damaged courthouse wall.
• Construction of a fireproof vault for records at the legislative building.
• Repair and upgrade of fairground facilities.
• Lighting, repaving and striping for the courthouse parking lot.
• Relocation of the San Juan County Equipment shops
• Agate Beach Park toilet replacement.

Rose said that many of these and other capital items should not be postponed. “The public entrusts us with these facilities,” he said, “we must take care of what we have.

“We cannot let a masonry wall leak for over two decades and expect it to be OK. The south portico is separating from the Courthouse. We cannot let good facilities plans started in the past to languish while we wait for a financial miracle.”

Rose recommended that the Council look to update its capital facilities plan, conduct a public process to explain the need and then, “It is my strong recommendation that the Council immediately consider implementing the second 1/4 percent Real Estate Excise Tax allowed by the Growth Management Act,” said Rose.

He estimated that the tax, which is paid by the seller, would produce more than $700,000 per year in revenue and could be enacted either by an act of the Council or by a vote of the public.

Now the budgeting process continues with the Council reviewing presentations from individual departments. Then on December 4th, the Council will hold a hearing on the proposed budget and tax levies. The final budget and levies must be adopted before December 31st.