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! STATE OF WASHINGTON
County of Jefferson
In the Matter of use of Sales
Tax Revenues exceeding budget
in the County General Fund
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RESOLUTION NO. 3B - 10
WHEREAS, the worldwide economic downtum has impacted the State of
Washington and Jefferson County, and has contributed to a shortfall in County revenues in
2009 and 2010; and
WHEREAS, sales tax revenues received by the County are subject to economic
declines and upswings, which impact the County General Fund and the public services it
supports; and
WHEREAS, the County may, during an economic upswing at its discretion, set
aside funds in the General Fund to dampen the effects of future economic fluctuations on
County services, fund Mure one-time operational and capital needs, or support County
services on a one-time basis; and
WHEREAS, sales tax revenues in excess of the budget and exceeding the set-
aside to dampen economic fluctuations can be returned to county tax payers by reducing
the next year's property tax assessment;
NOW, THEREFORE, BE IT RESOL VED, by the Board of County Commissioners
that it is in the best interest of Jefferson County and it's citizens to adopt the policy
attached hereto as Exhibit A regarding use of Sales Tax Revenues received over the
annual budgeted amount, in order to reserve revenues for Mure economic downtums, set
aside funds for capital facilities and reduce property taxes.
~-:~)~llD ADOPTED this ~'1 ~ day of September, 2010
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-C;;~!~,;a',:r:.~~"~ David Sulliva Chair
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Clerk of the Board Phil Johnson, mber
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EXHIBIT A
USE OF GENERAL FUND SALES TAX REVENUES EXCEEDING ANNUAL BUDGET
Purpose:
To set aside General Fund sales tax revenues exceeding the budgeted amount for use for
future revenue downtums, capital facilities projects, one-time operating costs and
reduction of property taxes.
Policy:
1. The General Fund budget for sales tax revenues each year will be set at or below a
level consistent with the average annual sales tax increase over the previous 10 years.
2. Beginning with the 2011 budget, any excess sales tax revenue received above the
budgeted sales tax amount will first be used to fill any shortfall in total General Fund
taxes and other Treasurer's revenue compared to the budget. When total General
Fund taxes and other Treasurer's revenues are at or above budgeted amounts, excess
sales tax revenue will be set aside as follows:
a. 60 % or more to a General Fund Revenue Stabilization Reserve for future
revenue declines and property tax reductions;
b. 20 % or more to Capital Improvement Funds or for approved one-time
expenses.
c. Up to 20% to programs or County liabilities.
3. Revenue Stabilization Reserve
a. The Revenue Stabilization Reserve is a reserve in the General Fund funded by
excess sales tax revenue. The goal is to build a Revenue Stabilization Reserve
of up to 5% of annual General Fund budgeted expenditures that may be used for
mitigating the impact of General Fund revenue declines. The Revenue
Stabilization Reserve will be set aside in addition to the current 10% operating
reserve, which is intended for cash flow and unanticipated expenses and
emergencies.
b. In the current budget year, the funds in the Revenue Stabilization Reserve may
only be utilized by the County when the projected total of all General Fund taxes
and other Treasurer's revenue is 1% or more below budgeted revenue after six
months through any given calendar year.
c. The Revenue Stabilization fund may be budgeted for use in the following year's
budget if the estimated total of General Fund taxes and other Treasurers'
revenue is estimated to be less than a 1 % increase over the current year
budgeted revenue.
d. Use of Revenue Stabilization Reserve funds will be accomplished through a
Resolution adopted by the Board of County Commissioners identifying how the
conditions of subsections 3.b. or 3.c. of this Resolution have been met, and
designating the amount of the reserve funds to be used.
4. Property Tax Reductions
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a. When the Revenue Stabilization Reserve amount exceeds 5% of the annual
budgeted expenditures in the General Fund as of September 30 of each year,
those excess funds shall go to property tax reductions for the following years'
General Fund property tax assessment.
5. Capital Improvement and one-time expenses.
a. The portion of funds identified in subsection 2.b. of this Resolution for capital
improvement shall be allocated in this priority:
. Priority 1: Fund annual County bond payments where REET (Real
Estate Excise Tax) does not cover the annual debt.
. Priority 2: Allocate to projects on the 6 year capital improvement plan or
to one-time costs that are approved by the Board of County
Commissioners.
b. Any funds designated for the Capital Improvement Fund will be transferred on
March 31 of the following year.
J
JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Board of Commissioners
FROM: Anne Sears
DATE: September 23, 2010
RE: Resolution for Use of General Fund Sales Tax Revenue Exceeding Annual
Budget
STATEMENT OF ISSUE: Creation of a policy regarding the budgeting and use of sales tax
revenues through economic cycles, creating a Revenue Stabilization Reserve in the General Fund,
funding capital and one-time expenditures, and utilizing sales tax revenues in excess of the
Reserve to reduce property tax assessments.
ANALYSIS: Sales Tax revenues received by the County are subject to declines and upswings. In
order to create a more stable revenue stream and provide sustainable levels of service, excess sales
tax revenues received to the General Fund in years where there is an upswing would be saved and
reserved in a Revenue Stabilization Reserve to dampen the effects of future cyclic downturns on
County services, fund future one-time operational and capital needs, support County services on a
one-time basis; and be returned to the taxpayers through a reduction in the next year's property tax
assessment
FISCAL IMPACT: The policy allows for the creation a new reserve titled Revenue
Stabilization Reserve for use in future revenue downturns and to reduce property taxes.
Additionally, a portion of the excess sales tax revenues will be designated for capital facilities
projects, one-time expenditures, County liabilities and County programs.
RECOMMENDATION: Review the proposed Resolution and adopt with or without
amendments, setting a policy for use and reserve of sales tax revenues exceeding budgeted amount
beginning in year 2011.
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