SEQUIM — City Manager Steve Burkett has proposed a 2 percent sewer rate increase and a 2 percent hike in the utility tax.
The sewer rate increase would help pay off Sequim’s debt for an $11 million water reclamation plant expansion.
“In the sewer fund, as you know, we’ve just completed a huge project,” Burkett told the City Council on Monday night as he presented his 2011 budget proposal.
The 2 percent utility tax increase would help cover higher costs of water, sewer and garbage service, he said.
The rate and utility tax increases, should they win council approval, would generate about $185,000 in new revenues, city Finance Director Karen Goschen estimated.
Burkett told the council he would not propose a water rate increase or seek to increase the city property tax levy by 1 percent, allowed by state law.
Difficult conditions
“The proposed budget is a financial plan that will move our community towards its achievement of goals within the constraints of available resources brought on by very difficult economic conditions that began in 2008 and will continue for the foreseeable future,” Burkett wrote in his budget message to the council.
The budget, which does not propose furloughs or layoffs of city staff, is balanced and planned to avoid spending down reserves and the fund balance, the city manager said.
It is intended to minimize the impact of any tax and fee increases on residents and ratepayers, especially low-income residents, he said.
During the past three years, the city’s assessed value has leveled off, Burkett said.
The property tax rate is $8.42 per $1,000 of assessed valuation, Burkett said.
Budget session Nov. 15
Council members will conduct a city budget work session at 5 p.m. Monday, Nov. 15, in their chambers at the Sequim Transit Center, 190 W. Cedar St.
Council budget adoption is scheduled for Monday, Nov. 22.
Proposed is an $18.6 million 2011 city budget in total, compared with $17.3 million in 2010.
Because it is a relatively small city, with an estimated population of 5,800 and a growing big-box store and retail economy, Sequim now has the highest per capita property, sales and utility tax revenue on the North Olympic Peninsula.
The amount per person in Sequim is $788 compared with $622 in Port Angeles and $730 in Port Townsend, Burkett said.
Capital projects
Major 2011 capital projects in the budget are:
• $500,000 for extension of the city’s water line east to Sequim Marine Sciences Lab, commonly called Battelle, on Sequim Bay.
• $200,000 for sewer line extension east to the Sequim Marine Sciences Lab.
• $275,000 in water mainline replacements.
• $150,000 for asphalt overlays on damaged streets.
• $150,000 for an overlay to repair roads in the sewer line project.
• $150,000 for a generator at the north end of the sewage lift station.
• $60,0000 for a truck for a sewer inspection camera.
• $60,000 for water meter replacements.
• $75,000 for a reservoir generator.
• $540,000 for the second phase of the reclaimed water project.
Also budgeted are $100,000 in transportation benefit district road projects, $72,000 for Rhodefer Road chip-sealing resurfacing and $50,000 for Olympic Discovery Trail repairs near a slide area near John Wayne Marina.
Burkett said $1 million would be set aside for future City Hall land acquisition.
The proposed general fund expenditures are $7.9 million and are balanced by projected revenues of $7.9 million.
Burkett said 2011 expenditures are projected to increase by $190,778, or 2 percent, over the 2010 budget.
Proposed revenues are projected to increase by $821,983, or 12 percent.
The major elements of the nearly $822,000 increase in revenues are:
• $180,000 increase in sales tax, based upon a projected 3 percent increase over the 2010 forecast, an 8 percent increase over the 2010 budget.
• $185,000 increase in utility taxes, based upon increased utility service rates, growth and the proposed increase.
• $376,000 increase in services to the general fund for cost allocation to other city operations.
• $95,000 in development-related plans in checking and building permit fees based on the knowledge of building activity and 2 percent growth.
The major elements of the $190,000 increase in expenses include a $317,000 increase in salaries and benefits, a $106,000 increase for contractual services and a $100,000 increase for supplies.
These increases were offset by about $300,000 in decreased expenses for the general fund.
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Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at jeff.chew@peninsuladailynews.com.