Sammamish cash coffers will decline by 73% during the next two years, from $62m to $17m, as expenditures exceed revenues in the 2017-18 budget.
With major road projects being considered, and even without them, new taxes and/or debt seems to be inevitable.
The City Council last year approved the budget without any new taxes or debt, going into this year’s Council elections in November.
But forgoing new revenue means a burst of new taxes seems likely to stave off the so-called cross-over point when the City looks at a cash deficit. The current projection is that the crossover point will occur in 2020, according to the finance section in the Council packet, which may be found here.
Finances will be a part of the Council’s annual retreat, which begins Thursday night and continues through noon Saturday at the Murano Hotel in Tacoma. Finances are slated for discussion Saturday morning.
Revenue vs Expenses
Sammamish projects $154m in revenues during the next two years and $199m in expenditures. Sixteen million dollars in revenues come from building permits and fees, 10% of the budget. Impact fees from development will be $14m, 9% of the revenues, according to projections.
Property taxes represent 37% of revenues, or $56m.
The general fund will have just $5.7m by the end of 2018, the projections indicate. The street fund declines to a mere $6.5m.
The parks capital fund is depleted to just $300,000. The General Government Capital fund declines to $600,000. The Surface Water Operating Fund and Surface Water Capital Fund decline to $600,000 and $300,000 respectively.
Surface water management is a critical issue for the Tamarack subdivision, where uphill development has caused downhill storm water flooding and erosion. The Council already set aside $750,000 to address this, and the amount may not be enough.
Potential new taxes
Sammamish is a property tax-dependent city, but in the name of holding the line on taxes, officials haven’t taken the 1% tax hike allowable per year for several years.
Under state law, a city can “bank” foregone tax hikes for implementation at a later date. Sammamish has $1.7m in banked property taxes.
The biggie is the prospect of imposing a utility tax on electric, gas, telephone, cell phones and cable television. A 1% tax would yield $1.1m annually. Up to a 6% tax may be imposed.
Business and Occupation, car tabs and a Transportation Benefit District are also options. The combined benefit could be about three quarters of a million dollars a year.
In the past, some officials suggested assuming the Northeast Sammamish Plateau Water and Sewer District and the Sammamish Plateau Water district. The latter has big revenue streams and more than $50m in cash.
Each district vowed to fight a hostile takeover.