Budget projections so rosy that city of Lacey plans to hire

After years of little to no growth in sales tax revenue, the city of Lacey plans to add to its staff due to an improving financial outlook for 2017.

That was the message delivered by City Manager Scott Spence and Finance Director Troy Woo during a preliminary 2017 budget presentation to the City Council on Thursday. During the recession and the slow growth that followed, the city has hired only two people — an economic development coordinator and a utility design engineer — since 2009.

The result was some punishing work loads among staff, Spence said, including one full-time employee, along with a part-time employee, who had to handle maintenance for about a half-dozen city-owned buildings, including City Hall. In all, the city plans to budget for nine new hires next year, including an assistant to the city manager, he said.

The city currently employs 244 full-time equivalents, Woo said.

This is possible because the city expects sales tax revenue for 2017 to be roughly $656,000 higher than in 2016. Construction and construction-related sales tax revenue categories have been strong for the city, as well as restaurants, Woo said. Both are signs that the local economy is healthy.

Some other budget details for 2017:

▪ Property tax levy: Expected to fall to $1.16 per $1,000 of assessed value next year from $1.20 this year due to a 5 percent increase in property values.

▪ New spending: Includes $30,000 to rebrand the Woodland District; as much as $150,000 for the Transportation Benefit District special election on Feb. 14; $50,000 for a Depot District master plan; and $25,000 for a neighborhood grant program. The “depot district” is in an area of the city that used to be home to a train station on Lacey Boulevard.

▪ Police overtime for security: The owner of the Lacey Fred Meyer store is paying $30,000 a month for Lacey police to provide security due to a shoplifting problem at the store. There’s no cost to the city, but it still needs to be reflected in the budget, Woo said.

▪ Although the lion’s share of tax revenue generated by retail marijuana goes to the state, cities do receive a disbursement based on locally generated sales for law enforcement. For Lacey, it is set to receive $27,000 next year, which is up $10,000 from this year. However, Woo cautioned that if the state Legislature struggles to balance the next budget, disbursement money could be put to another use.

Woo also reminded the council about the onetime nature of construction-generated sales tax revenue, adding that a wave of construction undertaken by North Thurston Public Schools will come to an end next year. He also said he is keeping his eye on a recent dip in general merchandise sales tax revenue.

If you’re interested in the city’s budget process, keep these dates in mind: City Manager Spence will make a 2017 budget presentation on Oct. 27, followed by budget-related public hearings on Nov. 3, Nov. 10 and Dec. 1. The 2017 budget is expected to be adopted on Dec. 15.

All meetings are at 7 p.m. at Lacey City Hall, 420 College St. SE.

This story was originally published October 9, 2016 at 3:23 PM with the headline "Budget projections so rosy that city of Lacey plans to hire."