The city of Sammamish’s adjusted 2015-2016 budget tops off at $212 million, an increase of $19 million from its original budget.
Finance Director Joe Guinasso presented a financial breakdown during a departmental update given to the Sammamish City Council during its regular meeting May 5.
The city had an unexpected $16.7 million come in last year, accounting for a little more than $14 million in savings and $1.55 million more in unexpected earnings collected through revenues like the real estate excise tax.
In total, Sammamish saw $19 million in savings, but nearly $5 million reserved for projects not completed in 2014 will carry forward to the current budget. For example, $2.26 million is earmarked for the Sammamish Community and Aquatic Center.
“It’s not that we’re really bad estimators,” Guinasso said Tuesday. “We try to budget very conservatively.”
He said these savings and the increase in revenue speaks to the conservative and prudent financial decisions the city council has made over the years. He also credits the city manager for creating a culture where staff continuously work to safeguard the citizens’ assets and spend the public’s money wisely, as well as former finance director Lyman Howard’s work in creating the systems and policies used today.
Quite often the city of Sammamish is praised for its financial responsibility. It has maintained its property tax rate for the last seven years, has a AAA bond rating and has essentially no debt, City Manager Ben Yazici said.
The actual ending fund 2014 balance was $78.14 million, roughly $33 million more than budgeted. The difference includes the $1.5 million in unbudgeted revenue, a $12 million increase adjustment to the 2015 beginning balance and the $19 million in savings, including the carry forward fees.
Accounting for the carry forward funds, the general fund retained about $6 million. Part of these savings went toward the $6.1 Mars Hill Church purchase the council authorized in March.
Other savings included $2 million earmarked to create the city’s own fire department, in the event the city discontinued its interlocal agreement with Eastside Fire & Rescue. In 2013, the city had been in contract negotiations with Eastside, seeking a revised pay structure, which eventually won out.
There was also $3 million in contingency funds retained through the general government capital improvement project fund.
“Sammamish is lucky,” Guinasso said. “We’re in really good financial shape that we can set aside $3 million or $2 million.”
For the 2015-2016 biennium, $10.4 million has been budgeted within the catch-all contingency fund. This fund rolls over and sits in case of emergencies.
The city saved about half, $12 million, of the allotted capital improvement project funds; the $3.6 million retained in the general government CIP fund is available in 2015 for infrastructure improvements related to the development of the Town Center.
Sales and use taxes garnered 20 percent more income than expected in 2014, adding to the city’s increase in revenues.
“We’ve had a real robust construction year,” Guinasso said. “That’s really the big chunk there.”
About 30 percent of the city’s sales tax revenues are derived from construction projects.
The largest revenue increase seen in 2014 was an overflow of $1.2 million from the real estate excise tax, collected when a property owner sells land.
While Guinasso said real estate transactions have relatively leveled out, revenues have leveled out at a high number, usually in the neighborhood of $3.5 to $4 million.
These revenues, he said, are reflective of the property development occurring throughout the city.
“You notice that when you drive through here,” he said. “Every year there seems to be a big commercial property or real estate property that pops up.”
The city expects this trend to continue and has budgeted $3.5 million for the real estate excise tax in 2015.
By the end of 2016, the city expects a $35.94 million ending fund balance.
