Lack of planning, spending spree created budget crisis that forced Mill Creek to make of difficult decisions

By Dan Aznoff | May 18, 2017
Courtesy of: Lynn Mordel

 

The Mill Creek City Council spent money like a teenager with their first credit card to dig itself a $2.4 million budget shortfall that required the newly-hired city manager to make some difficult decisions, according to a former member of the city council.

Three of the incumbents who have declared their intention to run for re-election to the City Council in the election this fall praised the actions of City Manager Rebecca Polizzotto to balance the 2017-18 city budget without increased taxes. Polizzotto walked into a city in financial crisis when she began her tenure with the city in 2015.

“The Council recognized that resolving the City’s deficit budget spending had to be addressed,” said Polizzotto. “Thus, my first priority upon arriving at the city was to focus on the financial operations.”

Polizzotto explained that she “methodically revamped the city’s organizational structure” and implemented streamlined management principals to present the council with a balanced budget in December.

Director of Finance Peggy Lauerman described the actions taken by the city manager as a “phenominal story.” But neither Polizzotto or Lauerman offered an explanation of how the city fell into such a financial hole in the first place, explaining that the critical situation was in place when both began working for the city.

Former members of the city council offered their own rational for how the situation was created. Each agreed that the council’s decision to appropriate funds from development fees and other one-time sources of revenue without plans to pay for the long-term cost of the approved programs were at the root of the dilemma.

“I warned the council that we were facing a bleak financial future if we continued to eat up our reserve and with no plan to boost revenue,” said former councilmember Bart Masterson, who served on the council from 2009 until 2013. “The city did not raise taxes for eight years prior to 2010 at a time when costs were going up and cities were suffering through the effects of the Recession.”

He added that three incumbents were voted off the council four years ago when challengers promised not to raise taxes.

“The annual revenue stream was not keeping not even up with expenses. The merry-go-round had to stop somewhere,” Masterson told The Beacon. “The cost of a loaf of bread has gone up. Everything is more expensive. The empty promises from politicians will not change that.”

He went on to say that the concept of a $20 million municipal campus was fabricated by factions within the city who wanted to oust the former city manager.

“It was all smoke and mirrors,” said Masterson.

Another former councilmember offered his own rational that the council’s refusal to accept reality is “only postponing the inevitable.”

Lynn Sordal was appointed to the council to fill the unexpired term of Terry Ryan when he was elected to the Snohomish County Council. He said the 1 percent tax levied by the city does not even keep up with the rate of inflation. Sordal served on the council for 14 months. He was defeated by Sean Kelly in his attempt to win his own full term on the council in 2013.

“The city manager has worked hard to follow the direction of the current council,” said Sordal. “But eventually the city will have to come to grips with rising costs to provide the quality services that the residents of Mill Creek demand.

“Public safety and fire protection cost a lot of money.”

Sordal currently serves as director of parks and recreation for the city of Lynnwood and has been involved in city and county government for 30 years. The former councilmember said Mill Creek never adjusted its financial plans to cover the additional expenses incurred from annexations in 2005.

“The situation that exists in Mill Creek today is not sustainable,” said Sordal. “Mill Creek is built-out and there will be no more development and mitigation fees to pay for the obligations the city has committed itself to. When the monies evaporate, you’ll still have the on-going expenses.”

Both of the former councilmembers said the city could eliminate another crisis by following the lead of other cities in Snohomish County by implementing a Utility Tax.

Current councilmember Vince Cavaleri echoed his colleague’s praise for Polizzotto, with his own rational for the cause of the financial dilemma the city was in. He explained that the city had been using the same organizational structure since incorporation. The situation left City Hall “top heavy” with highly-paid, long-term employees.

“We had supervisors who were responsible for teams that consisted of themselves and maybe one other individual,” said Cavaleri, who serves on the Snohomish County Sheriff Department. “I know that would not work for the sheriffs. And did not make sense for Mill Creek.”

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