The Puyallup City Council is set to consider a 2012 budget today that doesn’t use utility tax or rate increases to help pay for street and utility projects.
Instead, the budget dips into utility and general fund reserves to help make those projects happen.
City staff members said it’s not something the city could do every year, but it will work for 2012.
“I am very pleased with where we are and what we can present (the City Council),” said City Manager Ralph Dannenberg.
Dannenberg originally proposed a budget for next year that included a 0.7 percent increase in the tax on private utilities, such as cable and natural gas, to help pay for street projects, and an increase in utility rates – ranging from 2.1 to 4.1 percent – to help pay for utility system work. The council balked at those increases.
Councilman John Knutsen said in an interview that the city’s utilities are its “biggest income.”
“They can replenish themselves,” he said. “I’m not prepared to tax anybody, especially with what the county has done with the (South Sound) 911 tax, and the governor is talking about another tax.”
Instead, the budget now on the table uses $675,000 in reserves from general fund accounts – including $100,000 from the operations reserve – to help with street projects such as repairs and rebuilds.
And it uses about $3 million in reserves from the water and sewer funds to help with projects such as water main replacements and wastewater treatment plant work.
City officials said there still will be about $3 million in the general fund operations reserves, meeting the council’s goal. There also will be enough “rainy day” money in the utility funds, city officials said.
The council could revisit utility tax and rate increases next year. There will be several new faces on the dais then.
Four new council members were elected last month; three of them will take office in January.
The fourth, John Hopkins, recently took over his District 1, Position 2 post. He replaced Nicole Martineau, who was appointed and therefore only served until the Nov. 8 election was certified.
Hopkins said the proposed budget relies too much on reserves and isn’t sustainable.
“You can’t continue to do that. It won’t work,” he said. He added that he intends to vote against it today.
The total proposed 2012 budget is $100.3 million, including a roughly $37.1 million general fund, which pays for services such as police and the library.
The budget reflects cost-of-living pay increases included in already approved labor contracts – some dating back a couple of years – for many workers. It doesn’t include COLAs for nonrepresented employees and those in two labor groups – custodians, and corrections and parking enforcement officers – with contracts up for negotiation this year.
Dannenberg recommended giving those increases, but some council members said a decision on whether to grant them should be delayed.
Mayor Kathy Turner said she’s troubled by the uncertain state budget. “It’s not the right time,” she said.
The COLA money will be set aside so the new council can revisit the increases, if it chooses.
Sara Schilling: 253-552-7058 sara.schilling@thenewstribune.com
budget approval
The Puyallup City Council is set to adopt the 2012 budget at a 6 p.m. meeting today at City Hall, 333 S. Meridian.
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