The City Council Monday got an overview of the work, and financial challenges, which lie ahead in putting together the general fund and the capital budgets, which will set priorities and guide spending in the coming years.
In a special study session at the Mercer Slough Environmental Education Center, the council heard that tax revenue is expected to grow slowly over the next two years as the economy recovers, but will be offset by the rising costs for health care and other personnel benefits.
Uncertainties abound, however. Bellevue, and other cities, could face lower revenue due to decisions by lawmakers in Olympia trying to balance the state budget, as well as inflation impacts from rising oil prices and falling real estate prices.
The big-picture information was part of briefing on how development of the 2013-2014 operating budget and capital budget will be handled. Challenges facing the seven-year, 2013-2019 capital budget are even more formidable than the operating funds because the city has a growing list of needed projects.
The general fund, which is the city's primary operating budget, pays for the day-to-day services provided by city government, and consists mostly of personnel costs. The capital budget mostly pays for the acquisition or construction of infrastructure such as roads, parks, buildings and land.
For the second time the city will use an "outcomes" approach to assemble the 2013-2014 budget; the first time was two years ago when the process was used for the current 2011-2012 budget.
In this process, city services and programs are evaluated based on community priorities, or outcomes, rather than city departments. The seven outcomes are safe community; improved mobility; healthy and sustainable environment; innovative, vibrant and caring community; quality neighborhoods; economic growth and competitiveness; and responsive government.
After making reductions to balance the budget, the 2011-2012 general fund revenue is $297 million. Revenue for the 2013-2014 budget currently is forecast at $319 million.
The briefing also included an early look at the capital budget. Along with a lengthy list of basic projects, the capital budget includes the Mobility and Infrastructure Initiative. The initiative consists of key roadway projects in the Wilburton and Bel-Red areas designed to improve traffic flow and meet future growth needs downtown and east of Interstate 405.
Revenue for the Mobility Initiative is lagging what would be needed to complete the entire package, originally estimated at $299 million over 10 years. The initiative relies on a variety of revenue sources, including grants, right of way dedications, incentive zoning, local improvement districts, impact fees and property taxes.
Councilmembers also discussed the relationship between the Mobility Initiative and the East Link light rail project. In November 2011, the council unanimously approved an agreement with Sound Transit under which the city would contribute approximately half the cost of a downtown tunnel for the light rail project.
The agreement calls for Bellevue to make $100 million worth of "up-front" contributions. Monday's briefing included an early look at how many of the city's contributions to the East Link project could also serve needs identified in the Mobility Initiative.
Following feedback and guidance from the council, the city manager will present preliminary budgets in the fall; council will make adjustments before adopting the budgets in December.
For more information on the council's discussion about the capital budget process, and the process that will be used to determine the general fund budget, see the full study session agenda at http://www.bellevuewa.gov/Agendas/CityCouncilAgendaCityCouncilBudgetWorkshop4-2-12(1).pdf
Feedback: Toni Rezab (general fund budget), Budget Manager, 425-452-7863 or firstname.lastname@example.org; or Dan Stroh (capital budget), Planning Director, 425-452-5255 or email@example.com
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