By Debbie Klosowski, Mayor, City of University Place
This week the City Council approved a 1% increase in the City’s property tax levy. This does NOT mean that there will be a 1% increase in everyone’s property tax bill. Since a great deal of inaccurate information is circulating in the community, I hope the following will help clear things up.
Property Tax Levy – In 2010, the City collected approximately $3.7 million in property taxes. As you may recall, voters approved a statewide initiative several years ago to limit the total amount of property taxes that cities could collect each year. As a result, the total amount of property taxes collected by the City can only increase by 1% per year which means University Place will receive $38,309 more in property taxes in 2011. (This does not include new construction, improvements or increased value of assessed properties).
So how does the 1% increase in the property tax levy affect homeowners? The increase in property tax that homeowners pay to the City depends upon the assessed value of their house. For example, an average homeowner with a house valued around $300,000 last year will pay approximately $3 (yes, three dollars) more in property taxes to the city next year.
Although the City Council declined to approve the 1% increase in 2009, it did enact significant cuts in staff and services. This year, continued reductions in major revenues convinced the City Council to enact the 1% measure to help better fund public safety. (The City Council also dedicated all property tax revenues to fund public safety including Police and code enforcement. Also, please note that the City only receives 8 cents out of every $1 paid in property taxes with the remaining amount going to the State, County, School District, Fire District, Library and Port).
A police inspector, council salaries and possible license tab fees were among potential budget items discussed at this week’s UP City Council meeting. Last month, Interim City Manager Steve Sugg presented a balanced budget for 2011-12. After several weeks of review, it was time for council to present their ideas for proposed “adds” and “drops” to the budget.
Proposed Council Adds included: UP Volunteer Center ($5,000/year); a one-time $10,000 contribution to the Playground by the Sound contingent upon construction; and $35,000 for Civic Building insurance/tenant improvements. The most significant “adds” were a Police Investigator ($130,000 in 2011 and $145,000 in 2012) and temporary summer help for Public Works ($18,000). All in all, the proposed revisions totaled $206,660 in 2011 and $196,660 in 2012.
Council Drops: Finding adequate funding, however, to pay for the proposed “adds” proved to be a more difficult task. Although several “minor” reductions were identified, there was a great deal of discussion on other measures including council salaries and benefits.
Council Salaries – Under the current ordinance, Councilmembers receive an automatic 3% COLA each year. State law prohibits councils from decreasing salaries for current members; as a result, any decreases would go into effect after elections for the staggered council seats (three seats expire in December 2011 and the remaining four seats in December 2013). Although Councilmember Bellecci and myself advocated for voluntary donations of COLAs next year, the majority of council favored reductions starting in 2012 for the three Councilmembers beginning new terms.
Council Benefits – During past years, City Councilmembers received medical benefits on top of their City Council salaries. Since City Councilmembers are not considered “staff,” they could choose to participate in an outside insurance plan through the Association of Washington Cities which required four or more councilmembers to participate. Now that there are no longer four members interested in medical coverage, the Council would receive cash in an amount equal to benefits which is $16,193 per member in 2011 and $18,466 in 2012.
Potential options included eliminating Council benefits altogether (saving $113,351 in 2011 and $129,262 in 2012); reducing Council benefits to an amount equal to the cost of staff benefits (saving approximately $41,000 in 2011 and $47,000 in 2012) or reducing Council benefits in half, (saving $56,675 in 2011 and $64,631 in 2012). After extensive discussion, the majority of Council favored reducing council benefits comparable to staff with all funds being deposited into a health reimbursement account.
Balancing the budget – After all proposed council adds and drops were totaled, there was a funding shortfall of approximately $91,000 in 2011 and $130,240 in 2012.
As we reviewed the two lists, it became apparent that we needed to find a major funding source if we were to add the police investigator next year ($130,000 which covers salary, benefits, overhead and other contractual costs with the Pierce County Sheriff’s Department). During the past year, the City has already significantly reduced staff, implemented furloughs, reduced benefits and cut services down to core levels.
These cuts have also affected our police department in that we have reduced officers from three to two per shift. A dramatic increase in calls per officer along with a significant rise in certain crimes including vehicle thefts and break-ins convinced the Council that it was worth examining whether we could add on a police investigator at this time.
License Tab Option – In an effort to find funding for the police investigator, Council discussed the possibility of enacting a $20 per license tab fee which would result in $125,000 in 2011 and $250,000 in 2012. Although these funds are restricted to transportation projects, they could replace general fund dollars which are currently designated for road improvements, thus freeing up money for the police inspector. In addition, there was also discussion about using some of the money for badly needed road improvements
After limited discussion Monday night, the Council agreed to postpone any action on the license tab fee until a public hearing could be held on November 15.
Since that time, however, it appears that Council may have another option to consider. As of the end of this week, the statewide initiatives to eliminate state control over liquor sales were failing. If this trend continues, the City expects to collect approximately $200,000 in 2011 and $400,000 in 2012 in state shared revenues from the liquor tax which could then be considered for funding a police inspector. Stay tuned for more updates. The final budget hearing and adoption is scheduled for Monday, November 15.
In other items, council approved
* Surplusing a 1998 Ford 15 passenger van that is no longer needed by Parks and Recreation, valued at $7,000.
* Extended the period for accepting proposals from developers for “innovative housing” designed to increase housing choices for residents.
As always, I welcome your questions and comments. Please feel free to contact me at dklosowski@CityofUP.com.