City Deficit

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A reasonable solution to help understand the City's financial condition would be to have Finance Director Manuel prepare a six-year financial forecast.

This tool is the standard for a city to determine its projected expenses and revenue/income over the period. In my opinion, Mr. Manuel should create this before he retires in December. His institutional knowledge should be used.

I believe the City's current level of service is not sustainable and this forecast will settle this discussion.
Additionally, the forecast should stimulate the City Manager and Council to begin deliberations on how to fix the most pressing matter the city faces. It's time for some financial data to start the conversation.

Spending reserves for day-to-day expenses is a dangerous financial practice. This practice will negatively affect the City's bond rating, something it might need in the future.

Lynn D. Sordel
Mill Creek
Candidate for City Council Position #5

City Deficit

Why did Mr. Sordel not ask all of these questions when he was on the city council.

Mill Creek has never issued any bonds and therefore would be eligible for a top rating.

Mill Creek maintains a very high level of cash reserves, much higher than most cities.

As one who assisted in the writing Lynnwood's newest budget how does Mr. Sordel explain Lynnwood's use of reserve funds vs. Mill Creek's methodology.

Mr. Sordel is the head of the Lynnwood of the parks and rec. department and worked on their current budget. So how does he explain how Lynnwood which is twice the size of Mill Creek, has about 50% more population can not get by on a budget that is almost 4 times as large as that of Mill Creek's. Their sales tax collections are amazing and now they have new Costco!

With so much revenue why do they need to increase their utility taxes?

City budget deficit

Any comparison between the City of Mill Creek and the City of Lynnwood is an exercise in futility. The City of Lynnwood has its own public utilities, including a wastewater treatment plant, a municipal court, a jail, an economic development department, and a full service fire organization. Mill Creek does not have any of these services.

Lynnwood enacted a series of utility taxes during the recession. Prior to the recession, Lynnwood relied heavily on sales and property tax revenues (like Mill Creek is doing now). The recession seriously impacted sales tax revenues, and even property taxes became problematic due to reductions in assessed property values. The city had to diversify its revenue sources to provide essential services the citizens said were still important. In 2009, over 35 full time employees lost their jobs. I personally had to let go of 10 dedicated employees.

The lessons I learned from the recession have prepared me for Mill Creek's financial issues. I learned that when times are good, sales tax and property tax revenues are strong, but when the economy dips, these sources are not reliable. This is exactly what the 15 Mill Creek residents who messaged to the City Council in their September, 2014, Economic Development Committee report to the City Council. They called for the Council to consider other revenue sources, but to date, the Council hasn't gotten serious about any of their ideas.

Mr. Nelson also referenced the City of Lynnwood's sales tax revenues and implied the new Costco is going to add more to the coffers. Yes, Costco will add sales tax revenue, but Lynnwood got smart and developed a financial plan with the developers to build the new "ring" road around the perimeter to lessen traffic issues. Costco's sales taxes will eventually reimburse the city for this road's construction. Those new revenues were not added to the general fund where they would be spent for operations.

Mr. Nelson should remember in 2013, when I was on the Council, there was absolutely no discussion by the Council about it's financial condition. 2013 was not a budget preparation year. In 2014 expenses again have started to climb higher than revenues creating another need to use reserves. I believe Mill Creek is entering a financial period much like Lynnwood faced in 2008-09. Why do I believe that?

1. Using Real Estate Excise Tax (REET) revenues for daily operations-$640,000 now, in 2017, this will not be allowed. A major "hole" to fill.

2. According to Finance Director Manuel Mill Creek’s projected current budget deficit to pay for existing services is $1.7 million.

3. A new fire contract is currently estimated at $7.3 million. This is an expense that could seriously cripple the city beginning in 2017. District 7 will want more $$$$.

4. No real "big box" or auto sales that generate substantial sales taxes and no economic strategy to market the city.

5. Additions of Dollar Store and Auto Zone type stores won't pay the bills.

Finance Director Manuel has been warning the Council for years that the city is not on solid financial ground. Expenses continue to climb faster than revenues. This matter will get worse if the economy has another downturn.

Mill Creek is not prepared for that bad moment. It's time for the City's leaders to have some honest discussions about the most critical problem the city faces.

Lynn D. Sordel
Mill Creek
Candidate for City Council Position #5

City Budget Deficit

So you're going to implement Utility Taxes if elected.

Yet when you helped write the new Lynnwood budget it proposed proposed adding services and increasing utility taxes.

City budget deficit

With all due respect Mr. Nelson, your "trap" questions don't serve any useful purpose.

A 6 year financial forecast prepared by the city's subject matter expert is the best tool to see the scope of this matter.

Mr . Manuel is the only qualified person to do this analysis. I suggest you devote your time to support the creation of this data. He is retiring soon.

Any discussion of raising or implementing any taxes is a very premature idea. Let's see real data
so we can all have a better understanding of the matter.

Lynn D. Sordel
Mill Creek
Candidate for City Council Position #5

Alleged city budget deficit

The main problem I see here is that I have been a very regular attendee at the Mill Creek City Council meeting for 6 plus years and periodically before that and therefore am able to offer a much more accurate viewpoint. A viewpoint that is very contrary to what Mr. Sordel would like the voting public to believe.

Sordel and Carlson want everyone to think that the "sky is falling" when it is not.

All the financial information available to me indicates that we are not going to have another recession for another 3 years. Moderate growth will continue and therefore we should do quite well.

It has been reported that Lynn Sordel and Kathy Nielson have engage in open discussions on all the opportunities for new projects with new UTILITY TAXES.

A few more items on the alleged city deficit

In about 2004/2005 the city went down this Chicken Little-The sky is falling scenario with the Library switcheroo, the citizens took up the library taxes and the city kept the money. Then the city council went on a shopping spree and spent over $6 Million on the Ctiy Hall Annex and the Cook, Remilard and Dobson properties. I believe our city finance director at the time now works for Lynnwood or did for a time.

Yet our cash reserves continually range between about $4 million and $6 million plus and according to our Financial Director we are doing quite well in this budget cycle.

Our finance director has also stated that Mill Creek has not spent down the cash reserves, as other cities have, leaving our city in a much better position financially.

It is my recollection that budget items were brought up during Sordel's short term on the council but he said nothing, offered no comments when he had the opportunity. I was sitting there fully expecting him to comment yet he remained silent. I guess my memory is different than than his.

I also recall that the minority on the council wanted to revisit the last budget during the great recession but were shut down by the majority at the time which was lead by Mike Todd.

Our new City Manager has managed to reduce expenses by several hundred thousands of dollars in only 5 months through Lean/Sigma six program management. Programs Sordel promoted and yet cannot appear to acknowledge their success.

Does Lynnwood wastewater plant not pay for itself through fees? If not it should!

Mill Creek has a fire department suitable for its needs and with mutual aid agreements, the same as all cities have, have a full service fire department.

The fire and EMS contract is not yet renewed, we have until about mid 2016 to determine what we are going to do in that regard, It could well be possible that the final solution will be less costly based on final contract costs or the implementation of alternatives to doing business with FD 7.

The EDC report which was heavily influenced by the last city manager and was annexation driven. As a result of the past city managers involvement and not letting the EDC be independent, the EDC was hamstrung and they did not think out side the box. Some most recent annexations have not worked out well and have been very costly to the city.

We will be, or have hired, hiring a development consultant to advise us on the best approach to best implement development from the vacant Safeway east to EGUV on 128th and then we will have a better idea on to maximize the areas potential.

Should the city raise utility taxes then what would it do with the surplus cash reserves? Spend it I imagine and since there is so much money to be garnered in utility taxes it would most likely be spend on new projects the public is told by the politicians that they need and want, but that they do not realize they want and need them until some one tells them. I have seen this happen during my time in Mill Creek while attending various functions and "open houses' at city hall.

Much of which Sordel complains about is very premature, actions are being taken by the current council and city manager to address various issues facing the city and the final outcomes will greatly affect how the city moves forward.

Again, we much be very careful and not succumb to the "Chicken Little, the sky is falling routine".

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