Revenues
An Overview of City of Duvall Revenues
Revenues
The 2023/2024 Biennial Budget has an estimated increase in revenues of approximately $20.2 million or 39.1%, over the prior biennial budget (2021 actual and 2022 budget). Much of the increase is from revenue generated by development or from transfers to capital improvement funds to help pay for capital improvement projects.
Use the scroll bar at the bottom of any tables to see how the City's revenues have changed since 2019. If you'd like to take a deeper dive into the City's revenues, click on the "View Report" icon in the lower right corner of any table or "Click to Explore Data" when hovering over a chart.
Keep reading to find out more about the City's different categories of revenue.
As seen in the pie chart above (click on the right corner of the pie chart to change years), a large amount of the City's revenue from charges for services. Charges for services revenue includes utility billings from the Water, Sewer, and Storm Drainage funds, impact fees charged to developers to help mitigate the effect of an increased population due to new construction, activity fees for Big Rock Park and charges to departments for internal services from the Equipment Replacement, Information Technology and Facilities Maintenance funds.
The table above shows the different categories for charges for services revenue received in 2019 - 2021 and budget for 2022 - 2024. The Utilities category includes charges to residents for water, sewer and storm drainage services. The proposed increase for these services is 7.81% in 2023, an average of the prior two year Consumer Price Index for All Urban Consumers (CPI-U) for the Seattle/Tacoma/Bellevue area, as set by City Resolution. The 2024 increase is estimated at 6.48%, but will change as part of the mid-biennium budget adjustments when the actual CPI-U for 2023 is known.
The Natural & Economic Environment category includes development related revenues from impact fees and planning and zoning revenues. The City collects three different types of impact fees, Park, Traffic and School. School impact fees are collected by the City and remitted to the School District. Traffic and Park impact fees are collected from new development and used for street and park improvements that are specified in the capital facilities element of the City's comprehensive plan. Traffic and Park impact fees are increased annually by the prior two-year average Engineering News Record Construction Cost Index (ENR CCI), which is proposed at 6.02% in 2023 and estimated at 4.76% in 2024.
Internal Charges for Services are paid by departments to the City's Equipment Replacement, Facilities Maintenance, and Information Technology funds. To find out more about these funds and how charges are allocated to departments, please visit the Information Technology Fund, the Equipment Replacement Fund and the Building Maintenance Fund pages in this budget.
General Government charges for services include charges to developers for engineering staff time, charges to developers for collecting School District for school impact fees and charges for public records related items.
Culture and Recreation charges for services include Big Rock Ball Field activity fees and festival sponsorship revenues.
The City collects Public Safety related revenues for a part-time School Resource Officer and for law enforcement services provided to other cities when needed.
Approximately 20% of the City's revenues in 2023/2024 will be generated through taxes. The City’s main source of tax revenue comes from property, sales and utility tax which is used to fund the overall operations of the City.
In 2021, the Retail Sales & Use Taxes category surpassed property tax as the City's biggest source of tax revenue due to a voter approved 0.2% Transportation Benefit District sales tax for use on transportation improvements, as well as an increase in sales tax from construction due to development. The 2022 sales tax budget was a conservative estimate of sales tax due economic uncertainty, but is on track to surpass 2021 by 7% if sales tax from construction is included, and by 5.9% if it is not. The economic outlook is still uncertain, so 2023 and 2024 sales tax has been budgeted with a conservative increase of 4.5% and 4.1% respectively. This category also includes sale tax for criminal justice and an affordable housing sales tax.
The City is limited by state law to a 1% property tax increase. The 2023/2024 budget property tax revenue estimate includes the 1% increase plus a 7.3% for property tax from new construction in 2023. 2024 property tax is conservatively estimated with the 1% maximum allowed by state law and an additional 4% for new construction. 20% of the City’s regular property tax levy is reported in the Street Fund to help fund Street operations, and 80% is reported in the General Fund. In addition, the City receives property tax from a nine-year levy lid lift, which is restricted in use to pay down Big Rock Ball Park debt, fund a full-time school resource officer, and to pay for Information Technology improvements. The levy lift expires in 2025.
Business & Occupation tax is another name for the City's utility tax. The City receives utility tax from electric, natural gas, cable, phone, garbage, water, sewer and storm drainage utilities. 2023/2024 utility tax from the City's own utilities; water, sewer and storm drainage, is expected to increase by 7.81%, the two year-average Seattle/Tacoma/Bellevue CPI-U plus a small percentage from new construction. The estimate for increase in other utility tax is conservative and based on new housing.
The Other Taxes category includes revenue from the City's Real Estate Excise Tax (REET) I & II. To read more about REET I & II and how these revenues can be used, please visit the REET I and REET II pages in this budget.
Revenues that fall under the Miscellaneous category include development related general facilities charges (GFCs) for growth related improvements to the City's water, sewer and storm utilities. GFCs make up most of the revenue that is categorized as Contributions & Donations: Private in the table above.
Interest rates have increased significantly in 2022 which is reflected in the 2023/2024 budget. The City currently invests 64% of its fund balance in the state Local Government Investment Pool, which is very liquid (easily converted to cash) but susceptible to immediate changes in interest rates, and 31% longer-term US Securities to help mitigate the risks of an economic downturn that results in lower interest rates. The remaining amount is kept in the City's savings account which receives an interest rate comparable to the LGIP.
The Rents & Leases category includes payments to the City's Water CIP Fund from cellular service providers to lease water towers. This category also includes revenue from the rental of City facilities, including the City's Visitor's Center, the WRECK Building, the Depot Building and Dougherty Farm.
The Other category includes revenue from rebates, including rebates from the City's participation in the Association of Washington Cities Retro program.
The Other Financing Sources category of revenues includes transfers from one fund to another, revenue from the issuance of debt and any premiums, and monies received from the sale of surplus. See the table below for transfers from one fund to another during the 2023/2024 biennium.
The Intergovernmental revenue category is where the City reports funds received from grants and entitlements. 2023/2024 State Grants include $2,500,000 in 2024 from the Washington State Transportation Improvement Board (TIB) for the 3rd Ave Roadway and Sidewalk Improvements and $100,000 for the 2023 NE Cherry Valley Road overlay. It also includes $727,160 from the Washington State Department of Commerce for remodel of the Wastewater Treatment Plant Offices, $125,000 to help pay for updates to the City's Comprehensive Plan, and $56,250 carried over from the prior biennium for the City's Housing Action Plan. Also budgeted is $31,000 per year from the Department of Ecology for the City's Storm Drainage program.
The City receives State Shared revenues that include Motor Vehicle Fuel and Multimodal Funds that are receipted directly into the Street Fund to pay for operations and maintenance, criminal justice distributions that are restricted in use specific police programs and activities, marijuana excise tax, and liquor control profits and excise tax that is restricted in part for specific programs with rest permitted for "any lawful governmental purpose."
Revenues that fall under the Local Grant & Entitlements category include a $118,000 grant from King County Flood Control for use on the 3rd Ave NE Sidewalk and Roadway Improvements Project, $116,000 annually from the King County Parks Levy that is budgeted for use on operating and maintaining the City's Big Rock Ball Field, an anticipated $100,000 King County Youth Sports grant for the Phase II Big Rock Ball Fields design, and various grant funding for the City's Recycling Program.
The budget also includes $203,296 in carryover from an indirect Federal Grant from the Department of Housing and Urban Development for the 142nd Sidewalk Extension project and $80,000 for the design of Phase II 142nd Sidewalk Extension.
The Non-Business License & Permits category includes revenue generated from the City's building and permitting activities, which are reported in the City's Building and Permitting Fund. The City expects to issue 179 new housing permits in 2023 and 186 in 2024. Also included in this category are Street Use and Clearing and Grading permits which are reported in the Street Fund, and Concealed Weapons permits which are issued by the City's Police Department and reported in the General Fund.
The Business License & Permits category includes revenues collected from the issuance of business licenses though the City's partnership with the Department of Revenue, garbage and cable franchise fees, and special event and firework permits.
The City reports late fees and penalties collected through utility billing in the Non-Court Fines & Penalties category and revenues from its contract with the Issaquah Court under the category Criminal Traffic Misdemeanor Fines.