COLLEGE PLACE -- The City Council unanimously approved the city's 2012 budget, but looming cutbacks in state funding could eat into city finances next year.
In a memo to Council members, city Finance Director Robert Zielfelder said the $18.9 million budget will continue city operations at current levels with a number of capital improvement projects slated for completion.
But "this could be a challenging year to continue to provide the same levels of service," Zeilfelder said in his memo.
A big worry is cuts in state revenue sharing proposed to help close a $2 billion shortfall in the state budget. The Legislature will consider cuts in an end-of-the-year special session.
The city passed the budget in November, and also approved a 1 percent increase in its property tax rate.
The increase will add $7.25 to the annual property tax bill for the owner of a $100,000 home -- at a rate of about $2.63 per $1,000 of assessed valuation -- according to City Administrator Pat Reay.
The increase will bring an additional $11,368 per year into the city coffers, according to a calculations presented to the Council. The total property tax collection for 2012, which includes both the general property tax and long-term debt, is projected to be $1,410,406.
If state cuts are implemented, according to Zeilfelder's memo, "the city has the potential of losing up to $150,034 in annual revenues.
One bright spot is that passage of Initiative 1183 to privatize liquor sales will not allow the state to reduce the alcohol excise and profits tax local jurisdictions receive for two years, Zielfelder wrote. Under the 2012 budget, the city expects to receive a total of $106,250 in shared revenue from liquor sales.
The city's budget has major projects slated for this year for a total expenditure of about $3.7 million:
The Fourth Street and Larch Avenue pavement overlay.
Engineering services for the College Avenue-Rose Street Project.
Completion of the Whitman Central Corridor Project.
Completion of the final phase of Eastside Water Improvement Project.
An energy efficiency project at the city wastewater treatment plant.