Finance Department

2010 Budget Overview

For the 2010 budget year, the departmental budgets remain status quo. There are only two major capital projects scheduled for 2010; 1) Completion of the Water Improvement Project and 2) a project known as the Whitman Drive – College Avenue Improvements Project. The two projects will cost $1,766,910 and $1,912,078 respectively for a total of $3,678,988. These two projects equal 25% of all the expenditures planned for 2010. Actual appropriated expenditures for the year are $14,523,216. It is hoped that the city will have an ending balance of $4,902,336 which will assist the city through the low revenue months of January through April of the next budget year. The city does not receive its first major revenue until mid May of each year when the first property tax payment is made by the county. Over 78% of the city’s general fund (Current Expense Fund) is derived from tax collections. 40% of those collections are from property tax payments collected and distributed by Walla Walla County. Since 80% of the city’s departments operate out of the general fund, these revenues are extremely important. Of these moneys, 61% are spent on police and fire services, whose combined budget for 2010 is $2,256,161.

With the ongoing Water Improvement Project expenditures, the city has planned a base fee increase of $3.00 per month per unit. This is necessary in order to make the required debt service payments for the project. Almost 57% of the base fee is dedicated to debt service. $13.00 goes for debt service while $9.85 is used for general operation and maintenance (O&M) of the utility. There has not been an increase of the O&M portion of the rate for several years. Debt service payments for this project will last through 2028.

Over the past couple of years the city has seen a substantial reduction in revenues from such sources as interest earnings, real estate taxes and building permits. Other reductions, but not as drastic have been noted in property tax collections, sales tax receipts, state assistance programs and grant programs. Though this area has been somewhat insulated from the problems that have plagued the national economy, it seems that we are now beginning to see the influence of the recession within our local economies. This has delayed commercial development within the city which we had hoped would be near completion at this time. Commercial development of the Whitman Drive and Commercial Drive corridors are ever so important to our community. Costs to operate the city continue to go up, but the current revenue sources are either stagnant or are declining. Without new revenues from commercial development it will be difficult to complete important capital repair and maintenance of areas such as streets, storm water and parks which do not have a revenues source other than from the general fund. Remember, the bulk of the city departments (other than police and fire) operate on the remaining 40% of the general fund revenues ($2,262,157) that are available. Included in this available funding is $806,765 in interfund transfers that are used for support of the Street Fund, Fire Station, Southend and Commercial Drive bond funds as well as the aforementioned capital projects. That leaves only $1,455,392 for the general operation and maintenance of the city (this excludes the water and wastewater utilities).

It goes without saying that the city must operate guardedly throughout the year in order to maintain financial stability. The city departments continue to do well in conserving the city’s ending balances as we await further commercial development which will help meet the ever increasing needs of our community.