19 Fund Buckets

Total Fund



Total Fund Balance:  The City’s Total Fund balance consists of 19 separate funds or buckets. The 2019 Total Fund balance increased 8% or $4.0MM, while at the same time total expenditures increased 16.5% or $2.1MM.  It’s important to recognize the relationship between overfunding and tax rates.

General Fund

General Fund:  The General Fund, the single largest fund, after the water fund, had its 2019 ending balance increase 20% or $1.1MM - ending with an unallocated surplus of over $3 million.  We were somewhat surprised that with all of the cuts and efficiencies, 2019 Salaries, Wages & Benefits still increased more than local CPI. 

Beginning in 1Q20, We expect the Council to begin seeing budget amendments reflecting position vacancies and efficiencies.

Contingency Fund

Contingency Fund:  As the name implies, the Contingency Fund is a fund used for emergency issues. 

Different councils have had different levels of discipline in tapping this fund.  With the present Covid 19 crisis, this fund will inevitably be used as a bridge.  The Contingency Fund is overfunded by $141k at the newly adopted policy of 12.5% of General Fund Expenditures and overfunded by $1.6M at the historically proven level of 10% of General Fund Expenditures.  Additionally, the State Audit Report found the Contingency Fund was overfunded based on state law.

The draw down in 2019 was from two situations:

• $637,416 transferred to the Town Center Fund which Sound Transit is supposed to reimburse and thus can be credited back to the Contingency Fund (it really should have come from the Capital Improvement Fund)
  

• $607,920 which was transferred to the General Fund and is part of the $3
  million dollar surplus. 

The Council spent significant time in 2019 discussing and organizing for the realities of the Nov 2018 Proposition 1 defeat.  Unlike other cities,  Mercer Island enters the Covid 19 crisis with the benefit of having a year of systematically planning efficiencies and Prioritizing Government services (POG). The Council appears to be adapting to the Covid 19 crisis by further adjusting its staff and tracking Covid 19 personnel and material expenses. 

MIFSS believes with good tracking mechanisms, the City will apply for many Federal, State, and County reimbursements attributed to Covid 19 revenue shortfalls or Covid 19 expenses.  Because the City spent 2019 scrutinizing its operations and the City’s large dependence on Property Tax Revenue as opposed to Sales Tax Revenue, we feel the Council is in a strong position to finish 2020 with no tax increases.

The Council presided over a responsible 2019 budget and we are optimistic that 2020 cost savings and government bailouts will position the City well for 2021.