The Newcastle City Council roundups offer a digest of notable items for those who can't make it to the regular meetings. View the meeting agenda packet here and the meeting video is posted here when available. View past City Council roundups at newcastlewa.gov/councilrecaps.
CITY NETS SMALL SURPLUS FOR 2020
In December of 2019, the Newcastle City Council adopted a budget with a deficit that forecasted expenses to outweigh revenues by nearly $900,000 in 2020. Yet, after a tumultuous year that saw a global pandemic change everything, the final financial numbers are in, and in 2020, Newcastle actually ended up in the black, accumulating a $10,000 surplus. How does such a big swing happen? Let us explain.
A budget is a projected financial plan that relies on educated assumptions and historical data to forecast the future. So when you have a once-in-a-generation event such as a pandemic, it significantly alters the landscape. As the COVID-19 outbreak emerged in March, City staff made sound fiscal decisions to curtail non-essential expenditures, cut services and halt hiring, all to ensure Newcastle could weather any financial impacts associated with the pandemic. This quick thinking and smart budgeting laid the groundwork that resulted in a surplus.
A hiring freeze at the onset of the pandemic and additional staff turnover represented a cut of nearly $400,000 in staffing costs. A budget assumes a full accounting of staff members, so if there’s high turnover, it ultimately impacts service levels, but it will also result in temporary savings.
The City also cut summer events, reduced parks maintenance and limited other non-essential expenditures adding up to more than $250,000 in cuts. While these represented impacts to services that our community knows and loves, they were necessary to keep our citizens safe and the City fiscally responsible during a volatile time.
On the revenue side, Newcastle benefitted from a $564,000 federal CARES grant to support government expenditures relating to COVID-19. A total of $195,000 went directly to support small businesses through emergency grants. The City also offset more than $100,000 of budgeted operating expenses with the grant. More than $268,000 went to other COVID-19 related initiatives, including support for programs to help residents such as the Newcastle Cares grocery essentials drive, face mask and sanitizer purchases, signage and much more.
The City also benefitted from higher-than-expected online sales, as online shopping during the pandemic ballooned. Sales tax revenue exceeded estimates by $225,000, which helped offset a $280,000shortfall on the development revenue side.
“No one could have predicted a global pandemic when we prepared the 2020 budget,” City Manager Rob Wyman said. “As the outbreak unfolded, the City made quick decisions to cut spending across all departments because we didn’t know what the full economic impact of COVID-19 would be. Those decisions ensured Newcastle came out of this unprecedented crisis far better than expected.”
View a PowerPoint presentation with additional information here.
COUNCIL TALKS TRANSPORTATION BENEFIT DISTRICT
The Newcastle City Council agreed now is not the time to implement a Transportation Benefit District (TBD). After holding a public hearing, they chose to take no further action on the matter.
Following the decision on a TBD, staff suggested a reset on the City’s work to implement a Fiscal Sustainability Plan. As the costs to provide public safety protection continue to rise and development income slows down, City expenditures outpace incoming revenue, creating a structural budget deficit. That deficit is projected to rise to over $1 million annually, and increasing each subsequent year, if the City takes no action.
City Manager Wyman suggested the formation of a citizen advisory committee made up of residents and business owners. The group would develop recommendations on fiscal sustainability and budgeting for the Council. The Council will likely explore the matter further at its upcoming retreat on February 28.
GENERAL UDPATES
- The Newcastle City Council directed staff to bring back an ordinance updating its code of ethics. Learn more here.
- The Council also approved a housekeeping amendment, which fixes various codes for typos, inconsistencies with other code sections or City plans, outdated references to State law, unclear requirements, and terms that should be defined. Learn more here.
- During his report, City Manager Rob Wyman noted that King County has taken the lead in efforts to preserve the DeLeo Wall from logging. The City led the effort for well over a year as the community expressed a desire to protect the area. Newcastle will still be involved, however, King County, which has greater resources at its disposal, will spearhead the project.
- You can read City Manager Rob Wyman’s report here. City Manager Wyman delivers the report at each meeting and it includes valuable City news updates.
The Newcastle City Council wants to hear from you! Members of the public are invited to share thoughts during public hearings or two open public comment periods at meetings. In accordance with public health orders, meetings of the City Council currently occur virtually on the first and third Tuesdays of each month starting at 6 p.m., unless otherwise noted. You can email your thoughts to Councilmembers at [email protected]