HomeMy WebLinkAboutSECTION 3-BUDGET POLICIES
2004 Final Budaet
Section III: Budaet Policies
SECTION III: BUDGET POLICIES
This section of the budget sets forth the objectives of the budget as a policy document together with a
description of the basis of the policy.
Policy Context of the Budget
The City budget process is part of an overall policy framework that guides the services and functions of the
City. The budget serves a key role in that policy framework by allocating financial resources each year, to
the programs, which implement the City's overall policies. The budget also establishes financial policies to
influence the availability of future resources to carry out the City's policies.
The annual budget is a balanced budget with legal budgetary control at the fund level; i.e., expenditures
and other financing uses may not exceed budgeted appropriations at the fund level.
The City's basic policy document is its Comprehensive Plan. This Plan sets the basic vIsion for the
development of the City and establishes policies and programs intended to achieve that vision. The Plan is
further articulated by a series of planning elements, which include capital improvement elements (such as
utility plans), policy elements (such as housing plans, economic development programs, etc.) and
regulatory measures. According to state law the Comprehensive Plan is amended annually to incorporate
changes in policies or programs.
CITY POLICY FRAMEWORK
COMPREHENSIVE PLAN IMPLEMENTATION PROGRAM
COMPLETED ACTIONS (AS OF DECEMBER, 2003)
Capital Facilities Plan 2004-2009
SCHEDULED ACTIONS (2003-2004)
GMA Comprehensive Plan Update
Capital Facilities Plan Update
Comprehensive Transportation Plan Update including
non-Motorized plan
Community Development Block Grant Consolidated Plan
Update
ANNUAL FUNDING PROGRAM
Annual City Budget
Community Development Annual Consolidated Plan
Capital Facilities Plan
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Budget Policy Development
The budget process is linked to this policy framework by the annual development of Council Goals. They
relate the overall program to annual objectives funded by the budget, which govern the activities of
various departments in the implementation of the policy. The Capital Facilities Plan, which is derived from
the Comprehensive Plan, is funded annually in the budget process.
Budget policy development involves several distinct steps. This policy starts with an understanding of needs
and issues, describes explicit policies governing the development and management of financial resources,
identifies general goals, sets priorities with which to apply the available funding tools, and concludes with
specific funding proposals. In assessing issues and needs, this policy builds on actions taken in previous
budgets, thereby providing continuity with previous programs. This allows community needs to be
addressed on a multi-year basis, rather than attempting to satisfy all needs in one year. Explicit budget
policies are statements, which describe how financial resources of the City are obtained (various taxes,
fees, rates, etc.) together with how they are allocated, managed, and controlled. The goals are policy
statements that outline the significant program objectives of the City, which are to be funded. Budget
priorities are policy statements expressing how the limited available resources are allocated between
competing needs and programs. Budget initiatives are policy statements summarizing the actions that are
to be implemented in the budget.
These budget policies result from an ongoing process of economic and financial analysis by the Finance
Department. The periodic financial reports, which are routinely reviewed by the Mayor and the Council
Finance Committee, monitor progress against this analysis. The development of the Comprehensive
Annual Financial Report (CAFR) is also an important part of the analysis process. The financial
management policies result from combining the above analysis with Generally Accepted Accounting
Principles (GAAP).
Needs Assessment
The Auburn Community
The City of Auburn is located in southern King County and the northern Pierce County; the two most
populous counties in the State. It is strategically located in relation to the labor and consumer markets of
these two metropolitan counties. The City serves approximately 45,000 people within its incorporated limits,
and another 40,000 to 45,000 people who reside in the adjacent unincorporated area considered to be
within the Auburn community. The City of Auburn was incorporated in 1891 and operates as a non-charter
code city under the laws of the State. The city began as a small. rural community with an economy based
on agriculture and a railroad yard and center. During the 1960' sand 1970' s the city grew rapidly, both in
population and in area. This growth not only consisted of residential development, but also included
substantial industrial and commercial development. The largest employer in the City is the Boeing Co.,
employing an estimated 5,000 people in its Auburn plant. The City's total assessed valuation in 2003 was
$4.421,855.481.
In 2003, the City employed 447 people (on a full-time equivalency basis) providing a full-range of municipal
services. These services include: police and fire protection, municipal court services, parks, recreational
and cultural services, land use management and development regulation, street maintenance and
construction, water services, sanitary sewage collection, storm drainage management, solid waste
collection, a general aviation airport, a municipal cemetery, and a golf course. The City's water and
sewage utilities also serve large areas of the adjacent unincorporated area. The structure of the City is
described in Section V. City Operations.
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Other local governmental services are provided by other governmental entities serving the Auburn area,
and these services are not included in Auburn's budget. The Auburn School District provides public
educational services to the city. Green River Community College is located outside the City limits, but
within its water and sewer service area. King County provides solid waste disposal, public transportation,
regional sewage treatment, property assessment and tax collection, some judicial services, public health
services, and other county services to the City and its residents. The King County Housing Authority, for the
most part, provides housing services. Sound Transit began commuter rail service in 2000 in the Puget Sound
region, with a train/bus station located in the City of Auburn.
The City's economy reflects that of the surrounding region. One of King County's leading industries is the
Boeing Co., a worldwide supplier of commercial and military aircraft and related products. The Boeing
Company in the Seattle/Tacoma area employs close to 62,000 people, and several of Boeing's facilities
are located within easy commuting distance for City residents. The Auburn plant, where the company's
fabrication operations take place, supplies the commercial air fleet with spare parts. During the past 12
months, Boeing has reduced staff company wide in the wake of the terrorist attacks and the declining
demand for commercial airplanes. Approximately 28,000 jobs have been lost in the Puget Sound area
since 2000. Locally in Auburn, almost 5,000 jobs have been cut since 1998. Most of the City's
manufacturing jobs are at this plant. Boeing currently provides approximately 17% of the City's assessed
value, down from 24% in 2001, as the company sells of land and office space in Auburn.
Retailing has also become a significant factor in Auburn's economy. Auburn has been a center for
automotive sales for many years. In 2002, automotive sales represented 24% of total sales tax collection,
up from 23% in 2001. In previous years the City has experienced tremendous growth in the sale of
wholesale durable goods, which currently represents 14% of total sales tax collection, down from 19% in
2001. The SuperMall of the Great Northwest and the ancillary development contribute over 17% of total
sales tax collected. There are several building sites vacant but development around the SuperMall
continues.
Other enterprises that affect, or may affect, Auburn's economy include the Auburn Regional Medical
Center, which added 350,000 square feet to their facility, downtown redevelopment, Lakeland Town
Center, the sale and planned redevelopment of the Boeing property, and the Muckleshoot Indian Tribe's
gambling casino. The Muckleshoot reservation is adjacent to the City and has increased in size by over
one-third since 1999 as the tribe repurchases reservation land as it becomes available.
Safeway, a large grocery food chain, purchased land in south Auburn from the Boeing Company to
construct a regional distribution center. Construction began in the fall of 2003. The center will consist of
two warehouses for dry goods and cold storage. The total square footage of both buildings is 1,275,000
square feet. The facility is estimated to create 200 new jobs and over 800 construction jobs. Boeing has
also leased out most of their professional office space and adjoining warehouse to Zones, a nation wide
business technology retailer.
General Fiscal Environment
Effective budget and financial policies should be developed gradually over a period of time in response to
long-term fiscal and social-economic conditions. Accordingly, although this document responds to the
2004 budget, the City's financial policy framework has been developed in response to multi-year fiscal
pressures.
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General Fund
Auburn's economy is generally cyclical following the economic cycles of the surrounding region.
However, the economic down periods in the cycles have generally been less severe for Auburn than for
other municipalities in the region due to the relatively stable nature of Auburn's economy. Auburn's
economy has grown much faster than the State of Washington as a whole over the past decade, and its
basic industries have been somewhat insulated from the economic downturns. Auburn's last severe down
cycle ended in 1986 when the City was forced to reduce expenditures, and Auburn's last significant tax
increase occurred at that time. At that point, adverse economic conditions coincided with the elimination
of a number of State and Federal programs.
Starting in 1987, an economic recovery together with sound financial practices allowed the City to
accumulate surpluses despite significantly increased services. Commencing in 1991, the economy again
flattened and continued in a limited growth mode through most of 1993. However, through careful control
of expenditures, the City continued its established level of services without significant erosion of reserves.
The economy began to strengthen in late 1993. The 1994 and 1995 budgets provided a few new programs
and the building of adequate reserves against future economic downturns.
Economic cycles are not the only determinants of revenues for municipal budgeting. Even with an up
sloping economy, laws that determine who pays taxes and how much they pay can also have a major
impact. In 1995 through 1997, the Washington State Legislature adopted several pieces of legislation,
which have exempted selected businesses from the state sales tax. Although Auburn's economy
remained strong during the 1997 fiscal period, these exemptions have impacted Auburn's sales tax
revenues substantially, because Auburn has several manufacturing industries, including Boeing facilities.
Although inflation is controlled and expenses are on or below budget, these altered revenue sources are
having and will continue to have a substantial impact on Auburn's budget. Then again in 1998, 1999, and
2000 there were measures approved by the voters of the State of Washington that limited the ability of
local governments to increase revenues and future taxing authority. Two of the measures were overturned
in court and the last one, 1-747, was passed which limits property tax increases to the lesser of 1 % or
inflation. The November 2002 ballot included Initiative 776 that will affect street construction revenue. The
initiative was overturned in court and was being appealed at the State Supreme Court. In October of 2003
the Supreme Court upheld this initiative. The City will lose $450,000 annually of revenue that is dedicated
for road improvements.
Other significant concerns for the future are the demand for services. In particular, public safety services
will increase dramatically with continued development. During the past several years, the City saw most of
its new development come from commercial construction. In 1997, there was a significant shift from
commercial to residential construction and that pattern still continues. Due to mandatory sentencing
guidelines required by the State, we have experienced over a 400% increase in the care and custody of
prisoners since 1998. Alternatives to incarceration are being used, such as increasing the Home Monitoring
Program and utilizing drug and alcohol rehabilitation programs.
The General Fund must be budgeted and monitored very carefully during this period. Passage of the voter
approved initiatives, other pending voter initiatives, and the recent slump in the economy have negatively
impacted the general fund. Due to strong fiscal management in the previous years, available reserves are
sufficient to maintain the current levels of service provided the down turn in the economy is neither deep
or long. The City put a hold on increased services in the 2004 budget in effort to match declining revenues
to costs increasing from inflation and long term labor contracts.
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Other Funds
The most significant issue for the proprietary funds (which account for the activities of the City utilities,
cemetery, golf course, and airport) over the past several years has been ensuring that these entities are
self-sufficient and needed capital projects are accomplished.
The Water Fund has been under some pressure in the last several years due to increasing costs as well as
increasing capital needs. A corrosion control program consisted of several major projects and was
completed in 2002. Wholesaling water to neighboring communities is an important part of the water utility.
The City fully supplies water to a neighboring city in addition to supplementing the supply of water for three
other jurisdictions. With the listing of salmon on the Endangered Species List, ensuring water resources for
the community has become a focus.
The Sanitary Sewer Fund has seen its working capital increase during the last few years and operating
income has also remained strong the last several years.
The Storm Drainage Fund has completed significant capital projects during the last several years, with cash
revenues generated from rates. Given the large construction cost of regional facilities, a bond issue of
over $2.0 million was issued in 1999. The utility adopted a Comprehensive Drainage Plan as an element of
the City's comprehensive plan in 2002.
The Golf Course Fund has provided facility improvements and upgrades over the past several years,
primarily related to storm drainage problems. Green fees were increased regularly over the last few years.
Also, the rounds of golf played each year continue to increase. The 2003 and 2004 budget provides for a
study to determine the financial feasibility to construct a new clubhouse and snack bar.
Budget Trends in Recent Years
The expanding economy of the late 1980's left the City in strong fiscal shape. From 1991 through 2001 the
City was in an economic upswing. The 1993 Budget avoided the addition of new programs and extended
only those initiated in the 1992 Budget. The budget also supported a wide range of activity in the
proprietary funds. The 1994 Budget emphasized basic services, growth management and maintaining
quality of life. Inflationary pressures remained low and development processes began on two large
projects as well as the thoroughbred racetrack.
In 1995 and 1996, revenues were again budgeted conservatively due to the City's preference for actually
receiving revenues before authorizing their use. Program improvements focused mainly on filling
SuperMall-related service needs for police and fire protection and upgrading aging technology related to
computers and telephones.
It was anticipated that 1997 revenues would again be constant, but we saw an increase in the economy,
which translated into increased revenues. Minor program additions were undertaken mid-year. During
1997, the voters approved a measure to annex to the King County Library System.
Once again in 1998 we saw another boom economy, which resulted in increased revenues. Building
permit activity exceeded 1997 levels by mid-summer of 1998. Sales tax revenue continued to be very
strong and exceeded preliminary estimates for the third year in a row. During 1999 actual building permit
activity was 40% less than the previous year, although the City saw significant increases in assessed
valuation for property taxes. New construction activity reached its highest level with property values in
excess of $100 million being added to the property tax roles. New construction activity and sales tax
revenue leveled off in 2001, while energy tax receipts soared. Revenue growth in 2002 was guarded for
sales tax and construction activity as the region slipped into a recession in late 2001. As expected, new
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construction activity, as well as growth and expansion in our community subsided late 2001 and through
2002. Revenues in 2002 declined from 2001 by 5.8%. 2003 revenue is expected to exceed 2002 by 5% and
2004 is budgeted at the 2003 estimated level, but could grow up to 3.5% over 2003. Revenue growth is
dependent on continued low interest rates and a recovering economy.
Key Issues Affecting the 2004 Budget Process
The next several years will bring many challenges for the City. In November 1999, the voters of the State of
Washington passed Initiative 695. The State Legislature reacted to the initiative in the 2000 session by
repealing excise tax on motor vehicles. Another initiative went before the voters in November 2001, limiting
property taxes to the lesser of 1 % or inflation, and was successful. The City relies on property tax increases
annually to support basic service levels in the General Fund; any future increases in the total dollars
collected would have to go to a vote of the people. The General Fund has utilized reserves to balance
the 2002, 2003 and proposed 2004 General Fund budget due to decreases in sales tax revenue from the
struggling economy and the limits placed on property taxes.
As is the case with most cities, the other major issue is the funding of our streets transportation system. While
the City has enjoyed an increase in population growth and commercial and residential construction
projects, the ability to provide ongoing preservation and maintenance of our system becomes more
difficult, due to the sizable investment needed on an ongoing basis. Gridlocks exist along the major
arterials of the City due primarily to a failing state highway system that has inadequate capacity for
commuter traffic and forces traffic on to the City arterials. Phase I was completed on a rail system with a
transit station in the downtown area to help alleviate transportation gridlocks on our highways.
The tight labor market that had a dramatic impact on the City during the 1990's has eased tremendously
as unemployment rates raise. As of September 2003, the unemployment rate nation wide was 6.1 %, with
the regional rate at 6.4% and the State of Washington at 7.5%. All rates have increased over prior year.
The City's fiscal planning effort over the past years has included efforts to accumulate reserves necessary
for the City to weather a moderate recession. The increased revenues of the past few years should allow
the Cumulative Reserve Fund to be maintained at around $4.4 million dollar level in the near future to
hedge the City services against the continued revenue loss.
Governmental Funds
Over the last decade, the local economy has grown much faster than that of the state. The City's past
economic development efforts should continue to payoff as more industrial sites are developed. The
construction of the Auburn Market Place, which includes Lowe's Home Improvement Warehouse, the
Lakeland Town Center, and Zones will add to the retail sales tax base and further diversify the City's
economy. Additionally, the City has some of the remaining larger parcels of undeveloped land in the
South Puget Sound Region. Warehousing and commercial businesses view the area as a desirable place
to develop, because of the City's proximity to two major ports.
As has been the case in the past, the demand for services, especially public safety continues to increase
faster than available revenue. A wide range of factors, including growth and annexation of properties, in
the areas adjacent to the City and changing social conditions brings about this increase. Other funding
pressures include new legal requirements, labor relations and the shifting of the obligation for funding
services from the county, state and federal governments to local governments. Rather than lessening,
these pressures are expected to intensify in the coming decade.
Unlike police and other services, which can expand gradually in response to community growth, fire
services grow in steps as expensive new equipment or stations are brought on line. The City has continually
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made significant investments in fire services. From 1991 to 1996, significant investments of over $1 million
have gone towards replacing or refurbishing older equipment, and funding for additional fire equipment.
In 1996, the budget added staff to the interim fire facility. 1997 included $290,000 to the capital equipment
fund for fire equipment. A fire location study was completed in 1998 to guide the City in the siting of a third
permanent fire station. The 1998 through 2003 budgets provided $2,870,000 for fire replacement
equipment that partially funded the purchase of another fire truck and two aid cars.
The City is currently in negotiations with a developer to construct a 28,000 square foot police and court
facility. The proposed plan will restore a building on Main Street and meet the council vision and goal of a
new public safety building for police and court, which have outgrown their current facility.
The relocation of the police department and municipal court will free a prime building block north of city
hall that is primarily owned by the City. Preliminary plans call for redevelopment including a parking
garage and professional office space.
Resolution of the City's increasing traffic congestion on major arterials is a priority. In addition to local
funds, the aggressive pursuit of federal and state grant opportunities allowed several important street
projects to move to completion in 2002. Two projects that have extended over several years are the
construction for the C Street Southwest/State Route 18 westbound ramp realignment and the 277th
corridor. Both projects were completed in 2002. Together the projects were over $71 million and were
done in conjunction with other local governments. A neighboring jurisdiction took the lead on the 277th
corridor project while the City focused on the completion of the 3rd street overpass.
Another exciting project for the City was the completion of the Transit Center. This includes an area for a
parking garage with transit-oriented development and a pedestrian walkway. The garage was
completed in late 2001 and the pedestrian walkway and plaza were completed in early 2003.
Other Funds
Issues affecting the proprietary funds are changing. For the utilities, there is significant demand on
expansion for growth related needs. While the utilities continue with projects to catch up on renewal and
replacements, expansion activities such as construction of corrosion control facilities are also a high priority
to the City.
The storm drainage utility will continue retrofitting two public storm drainage facilities, responding to the
Endangered Species Act listing of Puget Sound Chinook salmon and update the Storm drainage model to
improve coordination with development applications.
As noted above, there has been a major issue impacting the water and storm utilities. The Puget Sound
region was faced with the listing of the Puget Sound Chinook salmon and the Bull Trout as "threatened" on
the Endangered Species Act. Auburn, situated between two basin areas, could be substantially
impacted, financially, by the listing of these rivers under ESA.
The working capital balance in the solid waste utility remains healthy. A new contract for refuse service
went into effect on January 1,2002. The contract provides curbside recycling, for the first time. Rates were
finalized in 2001 and are structured to encourage recycling. Rates are being reviewed in the fall of 2003 to
determine if increases will be required in 2004.
Golf Course revenues have been used to rebuild holes and improve the drainage system. In 2003 hole
number 12 was rebuilt and equipment was updated for maintenance purposes. The City has also hired a
consultant to do a clubhouse and parking feasibility study. The study began late 2003 and will continue
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into 2004. Hole number 13 will be rebuilt in 2004. Over the past 10 years the golf course fund has spent
most of its available capital improving drainage, rebuilding cart paths and reconstructing holes so the
course could be playable year round. With the completion of hole number 13 in 2004, there will be one
hole remaining to be rebuilt.
The Cemetery continues to operate on a firm self-supporting basis, although the fund is projected to have
operating losses in 2003 and 2004. Recently, a new cemetery opened up nearby, providing free burials to
veterans and spouses. This has had an impact on revenue, but as the region continues to grow, we
anticipate an increase in revenue. Management is also studying options to provide different services that
may be marketed.
The Airport is operating as a self-supporting fund and has two projects planned in 2004; runway pavement
rehabilitation and implementing the GPS/instrument approach system. The airport entered into several
long-term site leases in 2001, which has resulted in development of the available building pads. The City is
also working to hire private management to run the airport operations. A request for professional services
was solicited in 2003 and a contract should be completed late 2003 or early 2004.
The City Pension Services and Cemetery Endowed Care funds continue to grow in a manner that should
provide adequately for the purposes of those funds.
Grants and state gas tax revenues primarily fund the activity in the Arterial and City Street Funds. Other
special revenue funds are supported by other taxes or grants that are for special purposes or activities.
Capital project funds will continue to support street projects, the sound transit garage and retail space,
long term funding of fire apparatus and down town revitalization.
Reserves in the Insurance Fund are adequate to meet the intent of the fund. Significant long-term liability
exists for health care of LEOFF 1 firefighters and police officers, but based upon actuarial valuation of the
Fire Pension Fund and supplemental insurance policies; there should be sufficient reserves to cover the
anticipated obligations.
Financial Management Policies
The following policies guide the manner in which the budget develops, allocates, manages and controls
financial resources available to the City. These policies are fiscal principles or goals that the City seeks to
achieve in its decision-making. However, since fiscal conditions and circumstances continually shift and
change in response to operating needs, it may not be practical or always desirable to continually achieve
these policies. Therefore, these policies are intended to guide, not govern, financial decision making and
may not be fully achieved within any given budget year.
Operating Policies
1. The City should accept ongoing service obligations in new areas of programming only when adequate
funding is available.
2. Indirect administrative costs associated with the operations of funds should be identified and charged
against the operation of those funds.
3. The City's role in social service funding shall continue to be supplemental (addressing special or unique
local needs) to the basic responsibilities of regional agencies.
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4. The City shall continue to advocate that the responsibility for funding basic social service needs rests
with regional (or broader) agencies that have access to a broader basis of funding and can more
appropriately address needs on a regional basis.
Accounting, Auditing and Financial Reporting
1. In accordance with the Governmental Accounting Standards Board (GASB) the financial structure of
the City shall be divided into tax-supported governmental funds (including a General Fund to support
the governmental services of the City), and self-supporting proprietary funds established for non-
governmental purposes. Proprietary funds shall include a series of enterprise funds, which shall be
managed as business enterprises, completely supported by revenues derived by that enterprise.
2. The accounts of the City and its operating budget shall be maintained in accordance with the State
Budgeting, Accounting, and Reporting System (BARS) code and shall provide current financial data on
request.
3. The State Auditor will annually perform a financial and compliance audit of the City's financial
statements. Their opinions will be contained in the City's Comprehensive Annual Financial Report
(CAFR), and the State Auditor's Report.
4. As an additional independent confirmation of the quality of the City's financial reporting, the City will
annually seek to obtain the Government Finance Officers Association Certificate of Achievement for
Excellence in Financial Reporting. The CAFR will be presented in a way designed to communicate with
citizens about the financial affairs of the City.
5. Enterprise funds shall be budgeted on a flexible basis, which allows activities to expand and contract in
accordance with increased or decreased revenue earning activity.
6. The City should adjust utility and other enterprise fund rates in increments adequate to offset inflation
and to maintain adequate working capital balance and equities.
7. Depreciation shall be accounted for, and should be used, as a measure of capital development needs
in the utilities. As such the first priority for the use of such funds should be in maintaining existing
services. Costs incurred as a result of growth should be borne by new users, and extension of services
to new users should be on the basis of an investment decision by which the capital expenses will be
recouped by rate income from new users.
Revenues
1. The City will seek to avoid dependence on temporary or unstable revenues to fund mainstream
municipal services.
2. The City should avoid dependence on federal revenues to fund ongoing mainstream municipal
services.
3. General Fund services should be supported by user fees to the extent appropriate for the character of
the service and its user.
4. Grant funds or similar contractual revenue of a temporary nature are budgeted only if they are
committed at the time of the preliminary budget. Otherwise, separate appropriations will be made
during the year as grants are awarded or contracts made.
5. Revenue estimates for annual budget purposes should be conservative yet realistic.
Reserves
1. The City will maintain a Cumulative Reserve Fund to provide counter-cyclical balance, to protect the
City from unforeseen contingencies and to allow an accumulation of resources to finance foreseeable
general governmental capital projects.
2. Each enterprise fund and the General Fund should maintain adequate fund balances or working
capital to meet unexpected contingencies. The General Fund balance is to be maintained at a level
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sufficient to meet the cash flow needs of the fund without borrowing. The current level for the General
Fund is $3,722,900, or 8% of General Fund expenditures. The working capital balances of the water,
sewer, and storm drainage funds should be maintained at over $1,000,000 each. Other Enterprise
funds should maintain working capital balances of 20% of their operating and capital expenses.
Cash Management and Investment Policies
1. The City investment practices shall be in accordance with administrative policies developed in
accordance with Municipal Treasurer's Association standards.
2. Ongoing operations of City government shall be funded from ongoing revenues. An appropriate Tax
Anticipation Note or Revenue Anticipation Note may support funds experiencing temporary cash
deficits due to cash flow. Interfund loans may be provided at interest rates determined by current
outside investments. Such loans should be paid back during the fiscal year.
Capital Budget Policies
1. The burden for financing capital should be borne by the primary beneficiaries of the facility.
2. Long term borrowing for capital facilities should be considered an appropriate method of financing
large facilities that benefit more than one generation of users.
3. The City will develop a multi-year plan for capital improvements as required by the Growth
Management Act of Washington State. The Capital Facilities Plan will be updated annually and be
financially constrained.
4. The City will maintain its physical assets at a level adequate to protect the City's capital investment
and minimize future maintenance and replacement costs. The budget will provide for the adequate
maintenance and the orderly replacement of the capital plan and equipment from current revenues
where possible.
5. The City will continue to strive to rely on a strong local improvement district program for certain street,
water, sewer, and storm drainage improvements. They will be funded with no protest covenants
obtained from property owners whenever possible.
6. Enterprise fund working capital in excess of that needed for operations may be used for capital needs,
in order to conserve the debt capacity of those funds for major facility expansions to meet future
needs.
Debt Policy
1. GO debt should be scheduled for repayment on the basis of the entire outstanding debt not just the
individual issue; in a manner which seeks to reduce fluctuation in the total tax rate.
2. The City will strive to improve its bond ratings by improving its financial stability.
3. The City shall employ competent financial advisors and bond attorneys for all large bond issues.
4. The City shall employ a financial advisor for any bond issue over $1 00,000. Such financial advisor should
be independent of any potential underwriter who may be associated with the issue.
2004 City of Auburn Vision for the Future
City goals set the overall direction for the City, and as such, focus on priorities of program support and
development. The 2004 Budget allocates the City's resources to implement these goals through a citywide
work program. This work program is coordinated by this budget and administered by the Mayor. The
direction of activities for various departments throughout the year is guided by the adopted goals. Each
city department contributes towards the achievement of the goals. Specific objectives are then identified
to facilitate accomplishment of each goal and form the foundation for development of departmental
work program goals.
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The City Council and Mayor set a new direction for the City by establishing a long term "Vision of the
Future" in late 2002 and early 2003 to look ahead and vision what the City should look like in 15-20 years.
The 2004 budget contains the beginning of the vision that the City Council and Mayor developed. Some
of the visions and the strategies are as follows:
I. Retain and Preserve Community Identity
.:. Promote continuous community outreach by involving citizens and business in their City government.
Lead Responsibility: Planning.
.:. Continue efforts to partner, fund and enhance human services for families in need. Lead
Responsibility: Planning.
.:. Promote stability in both neighborhoods and the downtown. Lead Responsibility: Planning.
.:. Ensure Auburn is a safe and secure place to live or have a business. Lead Responsibility: Police, Fire,
Planning and Public Works.
.:. Utilize code enforcement to maintain neighborhood quality. Lead Responsibility: Planning
.:. Enhance neighborhoods through capital investment and maintenance. Lead Responsibility:
Planning, Public Works and Finance.
.:. Promote community identification and economic development by implementing a gateway and
marketing program to attract new business. Lead Responsibility: Planning.
.:. Continue to cooperate with groups and organizations to facilitate efforts to revitalize neighborhoods.
Lead Responsibility: Planning, Parks and Public Works.
II. Downtown Vision
.:. Secure Urban Center designation from King County and Puget Sound Regional Council. Lead
Responsibility: Planning
.:. Complete the A street connection from the transit station to 15th Street SW to improve downtown
access. Lead Responsibility: Planning and Public Works
.:. Complete the connections from downtown to the Interurban and White River trails. Lead
Responsibility: Parks and Public Works
.:. Provide a permanent solution for water quality and quantity flowing from the downtown area. Lead
Responsibility: Public Works and Planning.
.:. Continue downtown revitalization efforts and research options for additional parking, lighting,
drainage, and more pedestrian friendly atmosphere. Lead Responsibility: Planning and public works.
.:. Encourage multi family development in the downtown area. Lead Responsibility: Planning
III. Economic Development
.:. Develop an economic marketing plan that focuses on bringing desired economic development to
the community, and includes attracting small business. Lead Responsibility: Planning
.:. Continue to pursue partnering opportunities with the Muckleshoot Tribe, school districts, railroads,
service organizations, private enterprise, and the religious community to plan, develop and improve
the auburn area for the benefit of all concerned. Lead Responsibility: Planning
IV. Customer Service
.:. Create a "One Stop Service" for most permits and promote uniform application requirements with
the goal of promoting efficiency and higher levels of customer service. Lead Responsibility: Planning
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V. Invest in Trails, Parks and Park Programs, Open Space, and Trees
.:. Expand participation in youth activities, services, and opportunities for healthy, youth-adult
involvement, including consideration of development of a citywide youth activity calendar.
Lead Responsibility: Parks
.:. Collaborate with other entities: schools, service clubs, and King County in their efforts to develop
more opportunities for community youth. Lead Responsibility: Parks
.:. Complete the Loops connecting the Green and White river Trails to the Interurban. Lead
Responsibility: Parks.
.:. Create a conservation and passive recreation corridor along Mill Creek. Lead Responsibility: Parks.
.:. Pursue Tree City USA designation and undertake activities to improve the treescape. Lead
Responsibility: Parks.
.:. Restore White Lake. Lead Responsibility: Parks, Planning, Public Works.
VI. Resolve Transportation Issues
.:. Continue efforts to secure the necessary financing for the design of the Black Diamond bypass and
"M" Street grade separation. Lead Responsibility: Public Works.
.:. Continue efforts on corridor improvements: SR 164 link road; establish SR 167/1-405 as major regional
route for capacity improvements; SR 18 hill climb lane and complete SR 167 interchange. Lead
Responsibility: Public Works.
.:. Complete I Street, B Street, and C Street corridors to 277th Street. Lead Responsibility: Public Works.
.:. Develop a plan for local street preservation. Lead Responsibility: Public Works.
Capital Facilities Planning
In addition to specific projects discussed in the capital component of this budget, the Mayor and City
Council identified capital projects/facilities in a 2003 workshop.
Depending on the type of project, various departments are researching available options; working with
consultants in optional locations/settings or compiling cost estimates.
The identified projects in 2003 were:
1 . Public Safety Building
2. Community Center
3. Highway 164 Improvements (SR 164/SR 18 Bypass)
4. Land Acquisition for Future Needs
5. Non-Motorized Plan
6. Fire Stations, North and South
7. Gateway Improvements
Additional Projects were identified in the 2004 budget planning session:
1. Park Development Plan (including Olsen Canyon and Jacobson Tree Farm parks)
2. Revitalize Neighborhoods (Terminal Park)
3. Develop New Neighborhoods (White Lake North East Auburn by I Street)
4. Develop Lake between Hwy 18 and 15th Street NW
5. Downtown Lighting Initiative
6. Auburn Way South Corridor Study for pedestrian friendly crossing
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PROGRESS ON 2003 GOALS
1. Retain and Preserve Community Identity
.:. Identify significant "community gateways" and develop a program for enhancing or implementing
them that introduces the City to visitors in an attractive, meaningful presentation.
Lead Responsibility: Planning
Activities: Working committee has been formed. Gateway design is nearing
completion and the site selections are underway.
.:. Enhance neighborhoods with capital investment and work with groups within those areas to
facilitate ongoing revitalization efforts. Lead Responsibility: Planning, Public Works, Police
Department.
Activities: Staff has met with the Terminal Park neighborhood and developed a revitalization
plan. Parks is in the process of rehabilitating the neighborhood park and Public Works is designing
walking paths and lighting for the neighborhood. Staff is scheduled for LID training course in the fall
in preparation for possible LID improvements to streets or public facilities beyond City's ability to
finance projects desired by neighborhoods in this revitalization project.
Activities: Community Development Block Grant money has been secured to redevelop the
wading pool into a water spray feature at Les Gove Park.
Activities: Traffic staff implemented a test of traffic cushions in vicinity of the Auburn Library to
determine the efficiency of such devices for traffic calming without impacting emergency vehicle
access. Staff met with the community on H Street NE to review measures for reducing speeds.
Follow up installation of new lane striping and rezoning for school zone designation with additional
Police enforcement would appear to be making a difference.
Activities: Staff has met with a selected neighborhood to develop a revitalization plan. Parks is
in the process of rehabilitating the neighborhood park and Public Works is designing walking paths
and lighting for the neighborhood.
.:. Promote citizen and business involvement in City government with community outreach.
Activities: City Council meetings have been held out in various locations of the City to encourage
citizen involvement.
.:. Ensure Auburn is a safe and secure place to own or have a business. Lead Responsibility: Planning,
Public Works and Police Department
Activities: City staff is working with a private developer to design and construct a new police station
and courthouse in the downtown area. The plan is to renovate an existing building and provide
28,000 square feet for police and court services. The existing facility is less than half the proposed
site.
Activities: In addition to basic law enforcement services, the Auburn Police Department
provides a wide variety of programs that encourage partnerships with the community. These
programs include, DARE, Community Block Watch Meetings, Landlord Tenant Training, Citizens
Academy, Crime Prevention, and our Volunteer Program. Feedback from these meetings provides
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information that assists the Police Department in directed patrols to apprehend and deter criminal
behavior, i.e. racer emphasis, DUI emphasis, and commercial burglary emphasis.
.:. Cooperate with groups and organizations to facilitate efforts to stabilize neighborhoods in transition
and support alternatives for those areas in need of revitalization. Lead Responsibility: Planning
Activities: Staff developed a work program to commence neighborhood planning and
revitalization in the Terminal Park neighborhood. Several meetings have been held and a plan
developed. Funding is included in the 2003 and 2004 budget to improve the local park lighting and
walking paths. Meetings will be ongoing with neighborhood groups and organizations to continue
with the efforts the City has started.
II. Downtown Vision
.:. Secure Urban Center designation from King County and Puget Sound Regional Council.
Activities: The designation is to be acted upon by the Growth Management Planning
Committee (GMPC) in the fall of 2003 with King County ratifying in early 2004.
.:. Complete the A street connection from the transit station to 15th Street NW to improve downtown
access. Lead responsibility: Planning and Public Works
Activities: Efforts to secure right of way (ROW) and construction cooperation from two adjoining
landowners and to secure grant funding to leverage the project are on going.
.:. Continue to be actively involved with Sound Transit in the design and construction of a transit hub
located in the downtown area. Lead Responsibility: All Departments
Activities: The transit station is substantially completed. The small lot referred to as the" Kiss and
Ride" is scheduled for completion in 2004 with funds contributed by Sound Transit and the City doing
the work. The city holds a 99-year lease on 14,000 square feet of retail space in the garage. A
majority of the space is leased. The remaining space is being actively marketed.
.:. Encourage multi family housing in the downtown area. Lead responsibility: Planning
Activities: Staff prepared and Council approved an ordinance that allows multi family housing
in the downtown area that will have certain property tax exemptions for 10 years.
Activities: Staff worked with Low Income housing Institute (LlHI) to renovate the former JC
Penny building into affordable housing.
.:. Cooperate with the Chamber of Commerce, Auburn Downtown Association, individuals, businesses
and citizen groups to develop a plan that will attract desirable business to the downtown area.
Lead Responsibility: Planning & Public Works
Activities: Staff continues to work closely with the various interest groups and associations in the
city. Staff participates on local boards and volunteers their time to the enhancement of the
downtown area. The City is participating in the support of the Small Business Center through Green
River Community College. The center provides assistance to ensure the success of small businesses
in the community. Monthly coordination meetings with ADA staff were initiated this year to improve
coordination of routine event support needs by the City Street department.
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.:. Improve crosswalks, lighting, parking and drainage in the downtown area and make it a more
pedestrian friendly atmosphere. Lead responsibility: Public Works and Planning
Activities: Parking improvements and expansions are being planned in conjunction with the
relocation of the current police station and court. Completion of the Sound Transit" Kiss and Ride"
lot is planned for 2004.
Activities: Transportation staff has installed crosswalks at stop controlled intersections and is in
the process of re-evaluating traffic flow in the downtown area to make improvement
recommendations. Further study of the existing illumination infrastructure in the downtown is under
way and will lead to an estimate of cost and scope for needed capital improvements.
III. Economic Development
.:. Commit resources necessary to develop a focused economic development program. Lead
Responsibility: Planning
Activities: Staffing resources have been allocated and a plan is being developed using in-
house resources. A Mayor's community task force completed an exhaustive study to support and
provide guidelines to facilitate continuing economic development within the city.
IV. Customer Service
.:. Create a "One Stop Service" for most permits and promote uniform application requirements with
the goal of promoting efficiency and higher levels of customer service. Lead Responsibility:
Planning
Activities: The building department was merged into the planning department and now shares
the same work area. A Permit Advisory Task Force consisting of current customers of the building
department was created. Their work was completed in the summer of 2003 and final
recommendations were made in the winter.
Activities: Continued refinement of the Permit Trak software includes online access to permits in
the system that will provide users with a quick and easy way to check on the status of permits.
V. Investment in Trails, Parks and Park Programs, Open Space and Trees.
.:. Expand youth activities, services, and opportunities for healthy, youth-adult involvement.
Lead Responsibility: Parks
Activities: Teens served on the Auburn Youth council program and along side adults in
community events such as Clean Sweep, KidsDay and Good 01' Days. Through the Cities and
Schools forum, the City worked with the Auburn School District, the cities of Algona and Pacific, and
other youth service organizations on the "Reaching Out Fair" that recognizes the special
relationships that exist between youth and adults. The City offers a wide variety of athletic, cultural
enrichment and skill building opportunities for youth with volunteer assistance from adults.
.:. Collaborate with other entities: schools, service clubs, and King County in their efforts to develop
more opportunities for community youth. Lead Responsibility: Parks
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Activities: The City is continuing to work closely with other organizations serving youths, such as
YMCA, Auburn Junior Football. Auburn Youth Soccer, Auburn League and the Auburn School
District. The Schools Forum, made up of elected officials and management from surrounding cities
and schools have met on a regular basis to gain a better understanding of the overall needs of
youths. The City recently received a $50,000 grant from King County to construct an additional
baseball field at GSA Park. The City regularly collaborates with the Auburn School District, the
YMCA, and City for facility use to offer Late Night programs for teens and family swims for citizens.
.:. Plan trail to interconnect key community areas to the downtown and the existing trail network.
Lead responsibility: Parks and Public Works.
Activities: Joined with other departments on trail plans to be included in the update of the six
year Transportation Improvement Plan (TIP). Involvement with schools, King County Metro, service
clubs, property owners and the Muckelshoot Tribe will enhance efforts and opportunities for
improving the community trail system.
VI. Resolve Transportation Issues
.:. Plan for implementation of the next phase of the Green River Trail. Lead Responsibility: Parks
.:. Improve highway safety and ease congestion on major traffic corridors. Lead responsibility: Public
Works.
Activities: The City worked with the Adventist Academy, Muckelshoot Tribe, WSDOT, and the
FAA that led to a resolution to continue a State study for alternatives to improve safety and
capacity improvements for Highway 164 between Auburn & Enumclaw. The City obtained funding
from the MIT, King County, and is awaiting the federal budget approval to complete the funding
for a citywide Intelligent Transportation System (ITS) that will improve the traffic flow through the
city's signal intersections. The City and Tribe will be seeking funding in the 2004 Legislative session to
complete the State study. Staff and Mayor have been working with City of Kent to promote the
need for further legislative support for freight mobility financing in future state budgets. Related to
this project the city has conducted several neighborhood meetings with Green Valley residents and
the residential area on the plateau.
Activities: The City participated in Regional efforts for the RTID has resulted in SR 167 Corridor
Improvements being added to the regional list of key projects for voter consideration in the Fall
2004 ballot measure
.:. Develop a plan for local street preservation. Lead Responsibility: Public Works
Activities: A chip seal program to preserve local streets was initiated in 2002. A contract to
chip seal street segments in multiple locations of the City was let in the fall of 2002 for spring 2003
construction. This work has been completed and received positive community responses. The
Street crew has given priority efforts in 2003 to preparation for the 2004 Chip Seal and crack sealing
work program. The Auburn City Council adopted an ordinance to direct the interest earned in the
Capital Improvement Fund to be used to implement a street preservation program.
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.:. Construction of the White River Trail Phase 1. Lead Responsibility: Parks
Activities: The project was completed and dedicated September 2000. This multi-use trail
provides non-motorized access between Roegner Park and Game Farm Wilderness Park, as well as
Riverside High School and IIlako Elementary. Additional property acquisition is being explored at this
time to expand the trail.
.:. Continue efforts to secure the necessary financing for the design of the Black Diamond bypass and
"M" Street Grade Separation. Lead Responsibility: Public Works
Activities: A pre-design report was completed in 2002 to define design issues and property
impacts, evaluate alternatives, and establish preliminary project costs. A groundwater monitoring
well has been installed to determine groundwater impacts. Grant applications for design funding
remain pending. Staff continues to represent out freight mobility needs on this project to the Freight
Mobility Committee and the Mayor, working with Mayor of Kent, has conducted several on site tours
with key legislators to inform them of our continuing needs for financing this project as well as others.
VII. Miscellaneous
.:. Develop policies and strategies that make annexations affordable to both the existing and
annexed properties. Lead Responsibility: Planning
.:. Activities: Completed several small island annexations. Currently working on the possibility and
feasibility of annexing the Kent watershed property. The land exchange with Pacific continues and
the continued study of the Lea Hill area annexation.
.:. Continue to pursue efforts to ensure adequate water supply necessary to accommodate growth.
Lead Responsibility: Public Works
Activities: The City withdrew its application for primary groundwater rights for wells 6 and 7. This
decision was compelled by the City's inability to address the technical complexities of the project
within Washington State Department of Ecology-imposed time lines, and given the constantly
changing array of legal. regulatory, policy, and biological conditions affecting both the White River
and the state's water rights process. The water rights were being sought to assist the City, King
County Water District # 111, and Covington Water District in meeting current and future water
demands. All parties are continuing to pursue other opportunities for firm water supply.
2004 Budget Strategy
The 2004 Budget will be implemented by a series of objectives regarding development of resources and
their allocation to various competing demands.
1. A voiding the addition of permanent staff positions and reviewing replacement staff for essential
need. Limiting new programs until economic conditions or revenue streams capable of supporting
them are in place, particularly in the light of Initiative 747 and the downturn in the economy.
2. Conserving the fiscal capacity of the City to meet potential future needs.
3. Using reserve funds to finance capital equipment that maintains or enhances productivity.
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4. Controlling discretionary expenses, such as travel.
5. Providing adequate training, and increasing technology and tools to enhance productivity.
6. Maintaining a baseline of funding which continues to deliver high quality municipal services with
special attention to:
a. Continuing support of growth management.
b. Maintaining effective law and justice services.
c. Supporting a diversity of recreational and cultural programs.
7. Providing staff support and funding for street maintenance repair and improvements to meet
planning requirements and benefit from available funding opportunities.
8. Enhancing the capacity of the infrastructure where funding opportunities exist by giving priority to
providing necessary matching funds.
9. Continuing operation of the City's enterprise functions on a business basis.
10. Exploring all opportunities for economic development that will provide a return to the City of
Auburn.
Use of Budget Tools
This budget uses a variety of tools to implement these objectives:
Financial Measures
Each budget of the City of Auburn places a high priority on maintaining the fiscal integrity of the City by
managing reserves to counterbalance economic cycles while responding to emerging needs. During the
long period of economic growth, revenue increases allowed both the opportunity to fund additional
programs and to set aside reserves. When new programs are added, each is closely evaluated to ensure
that it can be supported over the long run after the growth cycle ends. Temporary "growth period"
revenues can also be used for capital needs of a non-continuing nature. Enhanced revenue also can
build reserves to provide counter-cyclical balance (e.g., a rainy day fund). The main purpose of such a
reserve is to allow the City to respond to funding needs in an economic recession without having to resort
to new taxes. The City has established a Cumulative Reserve Fund for both building revenues for major
capital needs and to provide a counter-cyclical balance.
The growth cycle subsided quickly as companies froze or reduced staff levels. Interest rates are at the
lowest level in over 30 years. However, it is anticipated that the development of residential construction
will continue due to low interest rates, but at a much slower rate. The need for services has and will
continue to be substantial, particularly Police and Fire services. Some of these services are required before
revenue is actually received from the developments. The challenge becomes to judiciously expand
services at a rate, which provides reasonable coverage and protection to the public within the constraints
of available revenue. New long-term funding commitments need to be avoided as much as possible until
new revenue capacity develops. Consequently, the priority is on completing existing funding
commitments and baseline needs, while carefully expanding services and protecting reserves. The 2004
budget does not expand any existing general government programs due to a declining revenue base.
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Late 2003 the City put a freeze on filling vacant positions funded by the General Fund in an effort to
stabilize and reduce expenses.
The City also maintains an insurance reserve to supplement its on-going insurance program, to provide for
the City's obligation for lifetime health care for LEOFF 1 police and fire personnel, and to maintain
independence in the insurance market. The Insurance fund reserve is approximately $2.7 million, and no
additional contributions were budgeted for 2004.
Baseline Budget
The baseline budget funds the City's ongoing operations. As such, it is an essential tool for implementing
goals and elements of the strategy directed at continuing the existing array of services at a high-level of
quality and efficiency.
The budget strategy places a high priority on continuing to fund programs that will protect the City's ability
to maintain and enhance quality of life and on programs that meet the continuing public safety needs of
our neighborhoods. In 2004, these needs will be funded by the appropriate use of the existing capacity of
City programs.
Capital Improvement Fund
The Capital Improvement Fund, established in 1993, is used to accumulate funds to finance large projects
that could not otherwise be done in one year from General Fund revenues. Projects include major
improvements to park facilities, acquisition of fire equipment and upgrades/acquisition of software and
hardware systems. The fund is budgeted for $3.1 million of expenditures with an ending fund balance over
$8 million for future projects identified in the Capital Facilities Plan.
General Fund Priorities
City General Fund revenues are forecasted conservatively, because of anticipated voter approved
initiatives. Baseline expenditures were not increased for 2004 unless there was substantial need. Increases
in salary and benefits and in contractual services were increased in accordance with union contracts.
Revenue estimates are conservative and based on the 2003 revenue stream that is 5.6% more than the
prior year. Economists in the region are predicting growth in late 2003 and into 2004. Costs may need to
be reduced if revenues decrease from estimated amounts. The General Fund budget was developed
under the following policy priorities:
1. No new programs until new revenue sources to support them are identified.
2. Protecting the City's long-term fiscal integrity and Moody's bond rating.
3. Maintaining productivity.
4. Enhancing efficiency and effectiveness.
5. Ensuring adequate and ongoing support for City programs and activities.
6. Providing training, adequate technology and tools to enhance productivity.
7. Funding priority planning needs to enhance or promote economic development within the City
and enforce code compliance.
8. Maintaining programs directed at protecting the quality of life in the community and its
neighborhoods.
9. Providing required matching funds for street improvements.
10. Seek out additional sources of revenue for street improvement and construction.
11. Funding continuing public safety needs; especially increases in prisoner custody.
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Over the last five years there have been statewide measures that have limited local government ability to
increase revenues. Many of these priorities are implemented in the development and review of the
baseline budget proposals of the various departments.
Proprietary Fund Priorities
The budget priorities in the Proprietary Funds are a continuation of past budget priorities, which have
generally placed these funds on a sound, self-supporting basis. Although the Water Fund has been under
financial pressure, rate studies have provided equitable recommendations to resolve this problem.
1. Continuing operation of the funds on a self-supporting basis.
2. Maintaining the fiscal capacity of the utilities with appropriate measures.
3. Implementing programs and rates to encourage resource conservation, particularly in water
usage.
4. Maintaining orderly development of capital facilities to meet needs.
5. Continuing measures to enhance productivity and maintain new facilities as they come on line.
6. Continuing programs that encourage greater recycling of our waste materials.
7. Focusing on capital projects that deal effectively with the City's growth.
Other Funds Budget Priorities
Fiduciary funds will be managed in a manner that continues to provide for their long-tem obligations. The
Insurance Fund will provide for insurance independence if needed. Debt service funds will continue to
retire debt as appropriate. No additional funds will be added to the LID Guarantee Fund in 2004, as the
fund is considered adequate.
2004 Budget Initiatives
Within these priorities and consistent with constricting revenues, the budget includes limited initiatives to
further the development of City programs to meet the needs of this growing community.
Program Development Initiatives by Baseline Adjustments
1. Improve efficiency by continuing to upgrade the City computer system including additions to the
Home Page as resources permit.
2. Continue incarceration services and explore options that may reduce costs in the future.
3. Provide funds necessary to purchase additional fire equipment.
4. Continue to regularly evaluate, maintain and improve streets via chip seal and overlay projects.
5. Continue expansion of the community policing program including business watch.
6. Continue efforts to expedite permit processing actions.
7. Continue emphasis on construction of the storm drainage improvements.
8. Provide the matching funds for qualifying street improvements.
9. Continue enhancement of emergency preparedness programs.
10. Continue efforts to replace outdated park amenities.
Additional Budget Issues For Study
Continued attention will be focused on revenues associated with the sales tax exemption for selected
industries. Federal and State Legislation that imposed additional requirements on the city without the
associated funding commonly referred to as "unfunded mandates." During the 2003 legislative session,
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cities requested relief for unfunded mandates related to criminal justice, Endangered Species Act and
planning mandates, such as the Critical Area Ordinances.
Another significant area of concern to the city is the desire to permanently bar sales and use tax on
domestic and foreign goods purchased over the Internet. If this passes, we will see a reduction in sales and
use tax as more and more retail sales migrate to the Internet. Auburn will be vigilant in ensuring that the
state and federal government continue to hear of the effects of their actions upon local revenues.
Lastly, we will evaluate our basic service levels of governmental operations to determine if any of them
need to be eliminated, modified, or reduced in order to deal with the long-term potential impacts of 1-747
and the slow down in the economy. The evaluation process will be initiated at the division level up to the
Mayor and then onto the City Council.
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General Fund Budget Summary
The General Fund budget is a particularly important part of the budget, since it allocates financial
resources derived from the City's taxing powers. As such, the content of this budget is a major policy
decision itself. The following table summarizes the proposed General Fund baseline budget. Baseline
expenses are those expenses that are necessary to maintain existing programs. The top part of the table
summarizes the revenues that are anticipated to be available next year. These revenues are those
expected to be provided within the existing revenue authority as established by current City ordinances.
All revenue growth illustrated will be due to increased growth or activity and includes both modest factors
for new construction activity occurring in 2004 and the anticipated effects of the sales tax exemptions
discussed elsewhere in this budget. The Financial Plan, section IV, of the budget describes the revenues
and expenditures of the General Fund in more detail, along with various other funds of the budget.
Revenue & Expense Summary: General Fund
2001 2002 2003 2003 2004
Actual Actual Adj Budget Est Actual Budget
Revenues:
Beginning Balance $ 15,288,352 $ 17,279,327 $ 15,676,552 $15,676,552 $13,913,300
Tax Revenue 32,812,677 31,295,717 31,082,020 32,077,900 32,638,000
Licenses & Permits 1,120,433 973,410 914,100 1,053,300 940,000
state/County Shared 2,059,441 2,046,809 1,566,100 1,937,867 1,798,400
Charges For Services 1 ,502,199 1 ,409,783 1,597,500 1,890,600 1,673,000
Fines & Forteits 623,427 763,839 652,800 828,900 760,800
Miscellaneous 1,1 01,953 682,470 688,400 679,750 760,000
Other Financing Sources 847,313 852,511 2,920,400 1,135,000 760,000
Total Revenues $ 55,355,795 $ 55,303,866 $ 55,097,872 $ 55,279,869 $ 53,243,500
$
Change
$ (1,763,252)
1,555,980
25,900
232,300
75,500
108,000
71,600
(2,160,400)
$ (1,854,372)
Expenditures:
Salaries & Wages $ 18,739,440 $ 20,309,384 $ 22,602,190 $20,904,482 $ 23,404,800 $ 802,61 0
Benefits 4,183,366 4,668,887 6,287,373 5,878,970 6,552,600 265,227
Supplies 1,364,978 1,245,080 1,624,130 1,519,730 1,544,800 (79,330)
Other Charges 5,457,295 5,986,021 8,703,577 8,324,577 8,155,100 (548,477)
Inter-Governmental 6,269,114 5,166,758 4,128,205 2,263,805 3,345,700 (782,505)
Capital Outlays 941,694 1,212,790 1,775,820 1,134,120 1,773,200 (2,620)
Debt Service: Principal 134,000 134,000 139,000 5,000
Debt Service: Interest 117,000 117,000 111,1 00 (5,900)
Intertund Services 1,120,581 1,038,394 1,089,885 1 ,089,885 1 ,509,800 419,915
Total Expenditures 38,076,468 39,627,314 46,462,180 41 ,366,569 46,536,100 73,920
Ending Fund Balance 17,279,327 15,676,552 8,635,692 13,913,300 6,707,400 (1,928,292)
Total $ 55,355,795 $ 55,303,866 $ 55,097,872 $ 55,279,869 $ 53,243,500 $ (1,854,372)
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