Arlington City: sales tax trending down; staff flags cable-fee trend and street-fund options

Kristen Garcia, a city finance staff member, reported at the Arlington City Council workshop that November sales tax collections were below the same period last year and are likely to leave the city short of its 2024 budgeted sales-tax receipts.

"Our sales tax is still trending downward, as compared to last year," Garcia told the council, noting the city expects a two-month reporting lag for holiday spending and that it will need to wait through the first quarter of 2025 to see whether holiday revenues offset the trend.

Garcia highlighted several offsetting items: investment income is running "quite a bit over budget," which staff said should help partially offset lower sales tax receipts, and the city's criminal justice sales tax revenue from the county is trending slightly upward. Garcia characterized that criminal-justice revenue as "about a half a $1,000,000 revenue source." She also flagged a longer-term decline in the cable TV franchise fee and said staff and councilors are beginning to discuss whether streaming services should be treated differently under local franchise arrangements.

In response to the revenue outlook, finance staff said they are developing contingency plans, including delaying certain purchases into the second and third quarters if the dip continues. Garcia and other staff said they would meet with department directors to identify purchases that could be postponed to preserve year-end fund balance.

Councilmembers raised ideas to support the streets fund and other operating needs. Councilmember Deborah Nelson suggested examining transfer-station fees and how they are set, noting heavy trucks contribute to road wear. Councilmember Heather Logan proposed studying low-rate parking in some city-owned lots (excluding main commercial corridors) as a modest ongoing revenue source. Garcia said staff will follow up and that existing biennial budgets include some continued support for the resource center beyond ARPA funding.

Council members also recognized staff achievements: staff reduced delinquent utility bills from 82 to 12 and noted Suzanne Sewell's selection as 2025 treasurer of the Snohomish County Clerk and Finance Officers Association.

Separately, staff member Paul circulated a draft resolution supporting the school district's effort; Paul asked if the council wanted staff to return with the resolution next week. No formal vote on that draft resolution was recorded in the provided transcript.