The recession continues to have an impact on Fife’s financial situation but, all in all, the city fared well in 2009 according to Assistant City Manager Steve Marcotte. He delivered a preliminary year-end financial report to Fife City Council during its Feb. 16 study session.
Actual General Fund revenue of $13.3 million was significantly below the original budget projection of $14.4 million. This is largely due to sales tax revenue being originally projected at $6.8 million, then later revised to an expected amount of $5.2 million. The actual amount, including mitigation revenue, was $5.14 million. The city collected $8.02 million in 2006 and $7.95 million in 2007. Marcotte said that represents two years of considerable construction activity and high car sales, which caused a bubble when the recession hit.
The city expected to collect $192,000 in permit fees and ended up with $150,000.
“This revenue source is so variable, projecting it is a crap shoot,” Marcotte remarked.
Carl Durham, director of the city’s Community Development Department, said indications from developers is that construction should improve in 2010.
“It is looking like it will be a little better than last year,” Durham remarked.
Fife ended the year with $2.44 million in its Public Safety Fund, up from $352,000 at the end of 2008.
Lodging tax revenue dropped from $665,000 in 2008 to $545,000 last year. Marcotte expressed optimism that more visitors will stay in Fife hotels this year.
“People can’t stay home forever.”
Real estate excise taxes took a nosedive, with only $288,000 collected in 2009.
Water sales revenue was up slightly to $2.02 million. Sewer service revenue increased by $119,000 to $3.39 million.
The city collected $2.47 million in property taxes, up from $2.18 million in 2008.
Marcotte noted there was a greater degree of delinquency in payments than normal.
Expenditures were budgeted at $14.8 million but ended up at $12.8 million. Marcotte noted staff and council implemented a plan to reduce spending by $1.5 million.
“We met our target and more than offset the drop in revenue with reductions in savings,” Marcotte said.
Fife has a higher percentage of reserve funds than many cities, Marcotte noted, a good sign during uncertain economic times.
“It was a real difficult year, but we came through it good.”
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