The Mill Creek City Council unanimously adopted the 2021-2022 Biennium Budget at its December 1 meeting. Budgeted revenues, including beginning fund balances, total $63,307,940. Budgeted expenses match revenues for these same years. The City Council desires to retain the same service level in the next two years as it exists today. In line with current economic conditions, the Biennial Budget includes a plan to generate revenues without increasing property taxes.
City Manager Michael Ciaravino stated, "We plan to support the needs of the City while recovering from the effects that COVID-19 has had on our City and the economy. We have developed the Budget based on the Council's directives, and in anticipation of a long recovery period from the current economic downturn."
The Budget is organized into the two components: Operating Funds (including the General Fund) and Capital Improvement Funds. The General Fund revenues are projected at $29,724,323, with expenses projected slightly below at $29,437,804. The General Fund revenues include an annual increase in the EMS property tax. Additionally, the City may not fill open, non-essential staff positions until the COVID-19 pandemic dissipates and the economy shows pre-pandemic strength. The General Fund budget includes approximately $284,000 in one-time sales and use tax revenues from The Farm at Mill Creek construction project. The income from The Farm at Mill Creek is projected to end in late 2021.
The total Capital Facilities Program (CFP) for the 2021-2022 biennium is $7,002,051. The CFP includes buildings, land acquisition, park facilities, street projects, and sidewalk improvements. Much of the capital improvement activity within the CFP is funded through contributions from the General Fund, Real Estate Excise Tax (REET), acquisition of grants, issuance of bonds, and contributions of developer mitigation funds and improvements.
The economic impacts of COVID-19 are significant. The City projects a loss of $4.2 million of revenue due to its effects. "The City's families and businesses are affected, as is the fiscal capacity of the City of Mill Creek." said Finance Director Jeff Balentine. "As the pandemic resolves, our reserves must cover losses from sales and use tax, passport operations, central services, and real estate excise tax (REET)." At present, approximately 40% of the City's revenue is derived from these sources along with revenues from permits and recreational services. The projected 2021-2022 Budget will remain flat, with few increases as compared to 2019-2020. To mitigate the projected losses to several of its fund balances, the City is seeking to identify new revenue streams. Potential revenue sources include new recreation services, expanded passport services, and the creation of new governmental services. "The Budget assumes the COVID-19 pandemic ends soon, and that we may return to normal operations on January 1, 2021 and restart recreational services by July 1, 2021. Unfortunately, the overall impact of the pandemic will likely be significant, and the City must use its discretion to allocate resources and continuously project revenues and expenses five to six years into the future." says Balentine.
The City projects the Surface Water Reserve Fund to grow based on prior, preapproved billing increases. However, the City anticipates future budget amendments to address capital expense requirements for infrastructure improvements, especially with its aging pipes.
The budget document will be finalized in the next several weeks to reflect continuing discussions in Council and the presentation of revised financial projections. Details about specific departmental budgets and work plans are included in the Preliminary Budget Book of the proposed 2021-2022 Biennial Budget, which is available online at www.cityofmillcreek.com/finance.