City goes easy on budget cutting


The Mirror

The Federal Way City Council has a new city budget with no admissions tax –– a nod to Enchanted Parks and the city's movie theater –– a smaller-than-recommended shift in the utility tax, and fewer job and program cuts than expected.

"It's not perfect, but it probably has the least impact we could have come up with," Mayor Dean McColgan said.

Still, unless the economy improves –– and many observers predict it will –– the city will be in the same position of having to make cuts to stay afloat during the next biennial budget cycle in 2007.

"We're not out of the woods yet," McColgan said.

Final approval of the budget is scheduled for the Dec. 2 council meeting.

The council saved municipal jobs, programs and services by:

• Shifting some of the utility tax from the capital budget to the operating budget.

• Using some of the city manager's contingency fund (typically used to cover unexpected costs and fees).

• Increasing business license fees.

• And shifting real estate excise tax revenue to pay, among other things, the mortgage on the new City Hall.

While the budget restores the majority of the cuts recommended to meet a $3.2 million annual deficit, it only provides one-time funding, without long-term solutions to keep many of the city's programs and services going.

Many of the cuts restored in the council's budget ––  membership in the National League of Cities, $1,000 for the Diversity Commission, event coordination and the volunteer dinner, a Korean liaison position and banners, flower baskets and holiday lights in the city center –– are only funded through 2006. Several others, like the council retreat, some intern positions and some parks operations items, have been funded only through 2005. Those items will come up during mid-biennial budget adjustments next year.

City manager David Moseley initially recommended $1.1 million in cuts and shifting $2.1 million from various revenue sources into the operating budget to fill the $3.2 million gap. Instead, the council ended up making $1.6 million in cuts and transferring $1.6 million in revenue.

The council shifted .575 percent of the utility tax, rather than the 1 percent proposed by Moseley, of which .5 percent and some of the city manager's contingency fund were dedicated entirely to restoring 11 police support officers and their three vehicles. Three existing police support vacancies were left vacant.

The remaining .075 percent of the utility tax provides Arts Commission funding and preserves the city's Red, White and Blues Indepence Day festival.

The council approved the property tax rate, which will drop about 3 cents to $1.27 per $1,000 of assessed property value, increased business license fees by $25 and approved using about $537,000 of the city manager's contingency fund over 2005 and 2006 to fund services. Almost $500,000 will remain in the contingency fund.

The higher business license fees and real estate excise tax money will restore security at Municipal Court, several programs in the community development department, a domestic violence victims advocate in the law department, and several services in the public works and parks departments, including Recreation Inc., which provides activities for developmentally disabled adults.

At the same time, the council deferred collection of the admissions tax until 2007 "to allow some leeway for the new theater at (The Commons at Federal Way) and to help out Enchanted Parks," Councilwoman Linda Kochmar said. A California company plans to build a 16-screen theater at the former SeaTac Mall.

Councilman Jack Dovey said delaying the admissions tax "at least two years is wise. This is a tax that only would be paid by certain industries. I'm against taxing one entity and not another."

Enchanted Village, which includes the Wild Waves water park, is a major attraction that would be assessed the admissions tax.

Though the budget is done, the city's Finance, Economic Development and Regional Affairs Committee will continue exploring ways to boost economic development and increase sales tax revenue.

The latter, which makes up about a third of the city's operating budget, has performed poorly the past couple years. According to the city's latest quarterly financial report, sales tax came in slightly higher as of September this year than it had during the same period last year, but was down 2.5 percent in the 2004 year-to-date budget and down .1 percent for the month of September.

City officials who track spending habits have said the poor economy led to less shopping generally, but when city residents did go shopping, more than half left the city to shop somewhere else.

To combat that, the finance committee plans to launch a market study to see if the city could support a University Village-style shopping center, and which retailers might locate here.

Staff writer Erica Hall: 925-5565,

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