The city of Spokane Valley pocketed a $3 million surplus at the end of 2012 even as other cities and counties across the state continue to trim budgets, cut costs and lay off staff.
The unexpected bonus happened because of higher than projected tax revenue and lower than expected costs, said Finance Director Mark Calhoun. Even with the surplus, not all revenues were up. Property tax collections were down slightly and revenue passed on from Spokane County for items such as traffic fines was down $630,359, or 33 percent.
Sales tax collections surged, up $1.2 million, or 8.57 percent. Permit and plan review fees were also greater than expected. After the gains were factored into the revenue losses, the city collected $1 million more in revenue than it expected.
Revenue projections are always difficult when the economy is dipping into a recession or recovering from one, Calhoun said. “Projections on revenue tend to trail what is actually taking place,” he said.
The city’s expenses also dropped $2 million, though it was a combination of a lot of small savings rather than one large one, he said. “I can’t really point at any particular thing,” he said. “It’s across the board. Really, every department under spent. There’s been a push for every department to come in under budget.”
Calhoun has already adjusted his 2013 sales tax revenue projections upward by $150,000 but he is still being cautious about predicting how much money will come in the door. “If you’re going to be off, you want your revenue projections to be conservative,” he said.
No decisions have been made on what to do with the extra $3 million. Calhoun said the City Council will likely discuss it during the 2014 budget workshop scheduled for June 18.
There are plenty of contenders for the cash. The city is $4 million short in the needed funding for the west Sullivan Bridge and has so far been unsuccessful in getting the project included in the state’s transportation budget. The money could also be used for street preservation projects, development of the Balfour Park expansion or a new city hall, Calhoun said. “There are a host of projects that would have advocates,” he said.
Calhoun is glad to see the unexpected surplus but said he doesn’t expect it to be repeated this year, particularly the large amount of savings from each city department. There simply isn’t that much more savings to be had, he said. “The city has been slowly wringing out any fat that may remain in the budget,” he said.