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| Splash photo by Craig Howard |
R.J. Stevenson took over as finance director for the city of Liberty Lake in September 2011 after serving as the assistant finance director in Washougal, Wash.
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A Cup of Joe: Frontline fiduciary
12/29/2015 9:43:37 AM
By Craig Howard
Splash Contributor
When R.J. Stevenson was introduced as Liberty Lake's finance director in September 2011, the Clark Kent glasses, distinctive goatee and contemporary attire represented a refreshing look at City Hall. Suddenly, it was hip to be a municipal employee.
The Michigan native quickly acclimated to his new surroundings, earning the respect of colleagues and citizens with an approach to city finances as cool as his appearance. Doug Smith, the Community Development director at the time, lauded Stevenson's "easygoing manner and even-keeled disposition."
Being calm and flexible came in handy during Stevenson's first year in Liberty Lake, a time characterized by concerns over the ripple effect from the ongoing national recession, a recently implemented 6 percent utility tax and talk of cuts to community institutions like the library and Trailhead Golf Course.
Liberty Lake had been without a full-time finance director since 2008, when Arlene Fisher left to become city administrator in Cheney. For years, the duties were handled by Smith and Administrative Services Manager Jessica Platt. Stevenson arrived after serving as the assistant finance director in Washougal, a city of around 15,000 near Vancouver.
After receiving his bachelor's degree in accounting from Ferris State University in Big Rapids, Mich., Stevenson left the Midwest for Oregon to crunch the numbers at Mt. Hood Meadows Ski Resort. An avid skier and outdoorsman, Stevenson had found a good fit in the snow of the Northwest. Eventually, he left the mountains for the urban slopes of Portland and an accounting job with Cascadia Behavioral Health Care.
Stevenson entered the municipal world of finances when he signed on with Washougal, spending time as city accountant and interim finance director in addition to his assistant finance director role. When he began looking to flee the region's damp weather, Stevenson realized the pursuit of drier conditions "basically eliminated everything along the I-5 corridor."
Stevenson now considers the Inland Northwest home, along with his wife and three children. The family abode also includes two dogs, a pair of parakeets and the possibility of several chickens by spring.
Q: You arrived in Liberty Lake at a relatively turbulent time for the city. The utility tax had been in place for less than a year, sales tax revenue was still recovering from the recession and City Council was divided on ways to stabilize the budget. How daunting was it to take over as finance director in the middle of that?
A: I was hired in September of 2011, so the utility tax had already been in place for nine months and revenues had been starting to increase again. It was also an election year as well with Mayor (Steve) Peterson in the running to return. Yes, it was a challenging start. However, I did have an advantage of being new and bringing a different, maybe even a fresh, perspective. My goal was to try and provide valuable information to the mayor, council and citizens to make an informed decision, but I was not the only new person coming on. Throughout 2012, there would be four new council members, an interim city administrator and a new city administrator.
Q: How did your experience as assistant finance director in the city of Washougal prepare you for your new role in Liberty Lake?
A: In late 2009, I was the interim finance director in Washougal when the recession was taking effect. The city was going through a very turbulent time, revenues were dwindling, the 2010 budget was not balanced, and it was time for the city to tighten its belt. It was during that time, working with a consultant to really understand the city's revenues, that we looked at what mistakes the city had made in spending and the long-term effects of those decisions and how to try and correct those mistakes. We also explored what other revenue opportunities were there and how to take a long-term look at how city services were deployed and would the revenue be there to support these services.
Q: What were some aspects of Liberty Lake's financial profile that stuck out to you in that first year?
A: Spokane Valley Fire was its own district and is funded by its own property tax levy. Water and sewer was its own district and is funded by its services. With these services out of the equation, the city can focus its resources more directly to police, parks, planning, building and library services.
Q: What were some of your initial impressions of the Liberty Lake community?
A: Clean and green - seriously. When I first drove into the city from the west, it was brown right up to the point when you entered the city. Seeing golf carts everywhere on the streets and sidewalks was different from most places, but it makes perfect sense because who else can hop in a golf cart and head to the store for milk and grab a coffee and a snack, stop by a park or even head to the golf course.
Q: There are so many facets to a municipal budget. How would you best characterize the city's prioritization of spending?
A: Provide great service to the citizens who live here. If you look at page 33 of the 2016 budget, there is a graph that shows how the dollars of the city are spent -- police being the highest priority. Parks, streets and capital are the other components.
Q: The utility tax has been the subject of some controversy since it was implemented in 2011. What do you think that revenue stream has meant for the city, particularly since the funds have been dedicated to roads?
A: When I started, I looked at the revenue streams in place and the city services provided. While financially the city was in a good position, without a new revenue stream, it would be difficult to make capital improvements, especially to roads. With the utility tax in place, the city has retired two loans, made improvements to Valleyway and Mission Road, made pedestrian crossing improvements and utilized the revenue as a match for three road projects funded by the State Transportation Improvement Board (TIB). One of those TIB projects was completed this year (Appleway), with two more projects ahead (Liberty Lake Road and Mission/Molter intersection). Without this revenue source, these projects would have been difficult to fund.
Q: Most cities have certain business sectors that are reliable sources of sales tax revenue. In general, what are top generators in Liberty Lake?
A: Auto and RV dealerships. There is also one big box store here in Liberty Lake that helps.
Q: Every year, the question of raising property tax by the allowable amount comes before City Council. You recommended a hike of 1 percent for 2016 that council decided to bypass. Why did you support the increase?
A: City population is growing at 5 percent, operating expenses, specifically police and library, are currently growing at 2 to 3 percent per year and revenues need to keep pace with that. We are fortunate that sales tax is performing as well as it is to help with that growth. However, recessions do happen like the last one in 2009-2010, and a recession will have an impact on the sales tax and possibly other revenue sources. What makes cities different from the private sector is that when revenues like sales tax drop, the demand for services that the city delivers does not drop. Also, when times are good like now, the city is growing, service demands grow, that the property tax should grow with it at the 1 percent. My concern is that there will come a time when we need it, like during a recession, and that is when the city may be forced to institute its banking capacity, and the increase is three times greater in an environment where citizens would be looking for relief because of the recession.
One of the graphs that I love in the budget is the general fund expenditures by revenue source for the 2016 budget. The concept is to identify the revenue source with the expenditure. Why does police receive a bulk of the property taxes in the graph? Because I believe if you ask the citizens, public safety would be at their list of most important to fund. Most of the other revenue sources except property tax can be attributed to a specific function - like permits are directly attributable to the building and planning department. Utility tax is spent on streets. Sales tax becomes the plug to fill in any gaps.
One more thing I like about local government is that I can see how my tax dollars are being spent. When you review your property tax statement, you know the portion that goes to the city is being spent on public safety in Liberty Lake and that the portion that goes to the fire district goes directly to provide fire and EMS services in this area. Whereas the amount that goes to the county or even that state, you really do not know where that is being spent even if it stays in this area. I know that a portion of your portion of the taxes that were paid to the county in 2015 went toward purchasing the transfer stations - not a direct benefit to the citizens of Liberty Lake.
Q: Finally, you moved to Eastern Washington to get away from the rain and closer to good snow skiing. How has that worked out?
A: I was warned that there would be a lot of snow. I grew up in Northern Michigan, so in maybe a weird way, I was looking forward to the white stuff on the ground. But in the last four years, it hasn't quite lived up to my expectations -- maybe this year. Overall, we are enjoying the area. The parks and hiking trails around here are very nice. Since the city has been looking at an aquatic facility, my family spent some time investigating the local aquatic facilities in the area as research to help get an idea on how they are operated. That has been enjoyable.
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