Business and occupation tax revenue keeps rolling in to the city of Kent.
The city brought in a record-setting $7.8 million in B&O tax revenue in 2015, a 24 percent increase from $6.3 million collected in 2014, which was a 21 percent jump from $5.2 million in revenue in 2013 when the city started the tax.
“I think that really speaks to you guys having faith in us and helping us with some additional staff so we can continue building this program,” said Barbara Lopez, city deputy finance director, in a April 19 report to the City Council.
The council in 2014 approved four new positions at a cost of about $425,000 to staff the B&O program in an effort to boost tax revenues. The program began with two staff members in 2013 when the council adopted the tax to bring in more money for street repairs.
City staff told the council the cost of the additional staff would be covered by more revenue and that proved to be true. The city added 190 new taxpayer accounts in 2015 that will bring in about $540,000 per year. Those companies also paid $988,000 in past dues.
Councilman Dennis Higgins asked Lopez if she expects to see similar 20 percent gains in future years as more businesses are added to the system.
“We are going like gangbusters to try to make sure we are collecting what we are supposed to be collecting, but I would really hesitate to say we would have that every year,” Lopez said.
The first $700,000 in revenue covers staff costs. The city caps the amount to streets at $4.7 million annually with the extra revenue going to help pay down debt in the city’s capital improvement fund. That debt has been paid off and the capital improvement fund (now known as capital projects fund) now has a positive balance of $3.4 million.
Starting in 2017, however, all B&O revenue will go to street repairs.
“In 2017, we’re not sure what to predict potentially (for revenue), but I’m looking forward to being able to put those extra dollars where the B&O tax was intended for,” said Councilman Jim Berrios.
Council President Bill Boyce congratulated city staff for bringing in additional revenue. He asked Lopez if the Finance Department now has enough staff dedicated to the B&O fund.
“I think so, yes,” Lopez said. “We are still working out some processes. Our last (new) staff person came on in November but we are really starting to jell with it. I think the staffing is good for now.”
City general fund doing well
The city’s general fund for 2015 showed an ending fund balance of $15.4 million, City Finance Director Aaron BeMiller told the council. Sales taxes, utility taxes and the real estate excise tax all came in higher than projected.
The council set aside $11.8 million of that balance in a general fund reserve account; $1.5 million in a contingency fund for unanticipated costs; $1.6 million is restricted for annexation costs in connection with the 2010 Panther Lake annexation; and $425,000 goes to a strategic opportunity fund.
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