U.P. City Council reviewed its third quarter financial health Monday night, Nov. 16, which largely showed expenses were lower than budgeted, and revenues were higher than projected. Hosting the U.S. Open this summer added to the trend.
After expenses for police overtime and added traffic duties were deducted from the mix, University Place added almost $1 million to its general fund thanks to the golf tournament that brought more than 200,000 spectators to Chambers Bay during the week-long tournament. The revenue was generated from the city’s 5 percent tax on ticket sales, additional retail sales and permiting fees. The added dollars represent a 10-percent boost to the city’s general fund.
For comparision, Pierce County, which owns and operates the Chambers Bay golf course, saw about $1.1 million in net revenue from the tournament, after stating the event would likely just break even. Nearby Lakewood netted about $16,000 from retail sales, hotel traffic and lease agreements to use Fort Steilacoom Park as a parking lot for the event.
The details about the U.S. Open revenue was good news in a financial review that was largely filled with other good news. General fund revenues are up 3.31 percent over budget forecasts. Expenditures were down 20.6 percent, although much of that is because technological improvements to UPTV have been budgeted but not purchased.
“The continued effort by staff to monitor spending in all areas has also contributed to the savings,” according to the staff report. “Overall, the city’s on-going operating revenues are 3.31 percent above third-quarter budget estimates.”
The city operates on a two-year budget cycle for the financial news, which comes at a time when the council does more tweaking and forecasting of future budget talks next fall. But the city’s dollars will drive much of the city’s discusssions between now and then, particularly when it comes to public safety and parks. The council has already opted to cut parks funding to maintanance only starting in 2017 in an effort to save about $400,000. That decision earlier this year, gave rise to the signature gathering drive to form a Metropolitan Parks District to fund parks through property taxes and an independent parks board, rather than through the city’s general fund, which is facing a $400,000 shortfall if projections become reality. A vote on the formation of a parks district could come this spring, once signatures are gathered and verified.
A driver of the budget talks will be public safety, which consumes almost all of the city’s property tax revenue and is growing at a rate faster than property tax revenue, which is capped at 1 percent, plus new construction. Cost for police services through a $3.5 million contract with the Pierce County Sheriff’s Department is growing at about 3 percent a year.
“It doesn’t take a lot of math to see that this is a losing proposition,” councilmember Steve Worthington said.
The city cut two police positions last year, and it will likely have to cut one or two more during the coming year.
“We, as a community, are going to have to make some dramatic changes and find ways to fund the police that we currently have, or look at a highly reduced rate,” councilmember Caroline Belleci said.
The city had floated a levy package last fall that would have collected 3.5 percent on utility earnings to fund police services. Proposition No. 1 failed at the ballot box with 54 percent of UP residents opposing the idea.
“Anytime that happens, that is a clear message that the public doesn’t want what you are selling,” councilmember and Finance Committee Chairman Kent Keel said, noting that he would like to see the council talk about the budget at community meetings and less-formal gatherings, rather than just at council meetings, which are often lightly attended. “I think we need to go to their doorsteps.”