POULSBO — Poulsbo’s budget discussions have yet to come to a close, but as the process continues to fit each piece of the financial puzzle together, city officials say it’s looking to turn out all right.
Wednesday night saw the final budget workshop with presentations from several of the city’s departments, as well as the go-ahead nods of baseline adjustment and new programs requests.
Poulsbo Mayor Kathryn Quade said while most discretionary funding will have to wait for carry-over allocation in January — as the city makes “have-to” expenditures its first priority for next year’s $8.6 million general fund — she is pleased with how the process has come together.
“It’s a question of balancing your wants against your abilities,” she said, adding the city is “pretty conservative” in its approach. “It’s been a priority for us to maintain a higher level of service… My priorities have always been what are the staff’s needs to be able to do their jobs?”
One necessary addition to keep service levels elevated was a part-time courts position. Quade said training, and the necessary travel that often accompanies it, are also of importance.
“We try to make money go as far as possible,” she said. “Coping with lid caps it becomes harder and harder to allocate funds.”
Quade referred to the city’s 1 percent annual cap on property tax increases as a challenge that didn’t throw the budget off course this year, but could force difficult decisions in the future, possibly affecting offered services or taxes, as matching revenues with costs continually proves arduous.
She said Poulsbo has fared better than other cities, however, and is now benefitting from careful planning and financial stability.
City finance director Debbie Booher agreed.
“It’s a trend felt by everyone and we’re a little luckier than a lot,” she said of the commonly-felt budget crunch. “Every year we do struggle. We struggle a little bit because we do a good job of reserving our dollars. Where we run into the shortfalls is because we’re transferring money to cover reserves.”
Booher said the city’s largest source of income comes from sales tax, which should continue to grow with the developing community, though it may not be enough to cover a widening cost-revenue gap. Sales and use taxes make up 50 percent of the city’s general fund tax revenue, property taxes account for 23 percent and business and utility for 26 percent.
“It’s hard to balance your budget when your revenue is going up 1 percent and your expenses are going up 10-15 percent,” she said.
Councilman and city finance committee member Dale Rudolph said the city is making a vigilant effort not to let future revenue shortfalls come as a shock.
“Our other sources of revenue have helped us not feel the pinch as hard as soon,” he said. “We’re trying not to get surprised.”
Rudolph said expenses, including health care for employees, continue to rise, and problems stemming from costs outweighing revenues are inevitable.
“We still feel solid,” he said. “The artificially low limit on property taxes is a concern. You can feel the tightening.”
Despite warning signs the future may see bumps in the budget road, councilman Ed Stern said Wednesday night the city is still, in comparison, doing well.
“We’re by far the healthiest operating jurisdiction in the county and we want to keep it that way,” he said.
The finalized budget will be up for approval at the Dec. 12 city council meeting, and if passed, will officially be adopted Dec. 19. Copies of the city’s preliminary budget are available for pick-up and review at Poulsbo’s City Hall on Jensen Way.
