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The City of Kent

The City of Kent. Financial Strategy Resource Team’s Recommendations August 20, 2006. Assumptions and Beliefs of Committee. Current structural deficit of $1.5 million per year Cash reserves of $8.0 million Services are provided at a reasonable cost

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The City of Kent

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  1. The City of Kent Financial Strategy Resource Team’s Recommendations August 20, 2006

  2. Assumptions and Beliefs of Committee • Current structural deficit of $1.5 million per year • Cash reserves of $8.0 million • Services are provided at a reasonable cost • A reduction in services would be detrimental to Kent • Economic development is the key to a stable economic future for the citizens of Kent

  3. Revenue Sources • Increase in taxes is primary source of funds to reduce deficit and provide funds for economic development. • Plan allocates $1.6 million to operating budget and $1.1 million for economic development.

  4. Impact of Recommended Revenue Generators

  5. Impact on Per Capita • City revenue per capita would increase to $815 from $732. • Total cost burden per capita including school taxes would increase to $3,304 from $3,221 • Lower percentage increase than decrease in state tax reduction.

  6. Sunset Provision • The tax rate increase and the tax credit should have a sunset provision of seven years. • Adequate time to evaluate the economic development experiment.

  7. Cost Savings • The City needs to reduce costs by $200,000 to $300,000 without reducing services. • Such savings may come from: • Combination of positions • Redirect administrative personnel to frontline • Share services with other cities • Use of technology to reduce labor • Use long-term financing due to flat yield curve

  8. Economic Development • Long term strategic plan needs to be developed and implemented by the City Manager, including • Creation of community-wide non-profit development corporation • Foreclosure and razing of old hotel • Increase code enforcement • Destination events • Subsidy of incubator • Tax abatements • Infrastructure improvements • Land bank acquisitions • Marketing • Hotel and conference center

  9. Other Issues That Came to Our Attention • Increase funding for tax collections • Sale of surplus properties • Proper control over permit issuance • The City needs to negotiate fairly with labor but needs to ensure that personnel costs will not rise faster than the City’s tax revenue base • Consider implementation of street light violation and school zone speeding cameras

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