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HomeMy WebLinkAbout1999.11.22 Council Minutes MINUTES SPECIAL MEETING PASCO CITY COUNCIL NOVEMBER 22, 1999 CALL TO ORDER: The meeting was called to order at 7:00 P.M. by Charles D. Kilbury, Mayor. ROLL CALL: By Deputy City Clerk. Councilmembers present: Michael Garrison, Joe Jackson, Chris Jensen, Dan Lathim, Rebecca Francik, and Carl Strode. Also present: Gary Crutchfield, City Manager; Leland B. Kerr, City Attorney; Stan Strebel, Administrative & Community Services Director; Erin Forrest, City Engineer; Bob Alberts, Public Works Director; Denis Austin, Police Chief; Greg Garcia, Fire Chief; David McDonald, City Planner; Richard Smith, Community & Economic Dev. Director; and Kurt Luhrs, Personnel/Risk Manager. NEW BUSINESS: Public Hearing - CY2000 PROPERTY TAX LEVY / I-695 IMPACTS: Mr. Gary Crutchfield, City Manager, presented the following statements: The preliminary 2000 budget has been presented to Council, but requires substantial alteration as a result of the voters passage of Initiative 695 on the November 2 ballot. The financial impact of I-695 (on an annualized basis) is estimated at $654,000 lost revenue. Anticipating passage of I-695, the "I-695" preliminary budget presented to Council includes $218,000 of expenditure reductions. Thus, the remaining financial impact to the preliminary budget caused by I-695 is $436,000. To compensate for that effect, the budget must be revised by either increasing revenue or further reducing expenditures. The Council is very limited in its ability to increase revenues (per state law). The only local revenue source which can compensate for the I- 695 effect, is the local property tax. In fact, the City's unused property tax authority is unusually large due to the City's prudent budget policies over the past five years. The City's property tax decisions over the past five years have driven its rate from a high of $3.57 in 1994 to its present low of $2.49, a difference of $1.08. in other words, the owner of a $100,00 home is paying $108 less property tax in 1999 than paid in 1994. If the remaining effect of 1-695 ($436,000) was compensated by increasing the property tax, the rate would increase by 46 cents, or $46 per year for the owner of a $100,000 home. The basic question Council needs to address is in regard to the property tax levy; how much should it increase? The City has kept expenditures at a level which avoided an increase in the property tax rate. Were it not for I-695, the property tax rate would need to increase by only 13 cents next year to maintain all current service levels. Those service levels can be maintained with an additional increase of 46 cents. The bottom line with regard to I-695 impacts on the city property tax rate is that all current service levels can be maintained by using less than one-half the annual property tax savings created by the City Council's past budget policy; in other words, property owners will still be saving one-half of the amount they saved in property tax in 1999. And those property tax savings are in addition to any motor vehicle excise tax savings individuals might accrue as a result of 1-695. To the extent the remaining effect of I-695 is not compensated by an increase in property tax, further expenditure reductions must occur in - 1- MINUTES SPECIAL MEETING PASCO CITY COUNCIL NOVEMBER 22, 1999 the City's general fund. To facilitate evaluation of the idea of service reductions, staff has prepared four package options: Third Fire Station: The new station located near Road 68 and Argent required the addition of nine firefighters when the station was opened two years ago. The station could be closed and the nine firefighters laid off. The effect would be to put the fire and ambulance service levels back to where they were in 1997 before the new station opened, until sufficient finances are available to re-open the third station. Those most affected by this option are homes west of Road 36, because response times will increase as the nearest response unit would be stationed at the airport. Library: The City spends nearly half a million dollars a year for operation and maintenance of the city library (recently refurbished with voter approved bonds). The library conceivably could be closed, depending upon ramifications of termination of the current operations contract which runs through the year 2000. Those most affected are students, particularly those of more modest household means (no computer, for instance). Street Overlay Program: The approximate $400,000 annual diversion of local utility tax revenue to the street overlay fund could be terminated (effectively allowing the receipt of those monies in the general fund). The overlay program provides for a maintenance overlay of all streets on a 15-year cycle; without the overlay program, annual street maintenance expenses would certainly rise and, at some point (3-5 years), streets would require major reconstruction at much higher costs. Those most affected by this option would be the entire community, as some form of higher taxes would be required in a few years in order to catch up with the deferred maintenance represented by the overlay program. "Other" Reductions: The list of "other" reductions represent a wide variety of services and programs, while avoiding any reduction in core public safety functions such as police, fire and ambulance, etc. Unfortunately, the list must be longer because it consists of smaller expenditures than the foregoing options. While many services or programs are not legally required or necessary for public safety purposes, they are significant ingredients in the receipt for a desirable quality of community life. Mr. Crutchfield explained that he felt an increase in the property tax is a viable option for Council's consideration rather than service reductions. Over the past five years the Council has not increased property taxes. This resulted in approximately a full $1 million annually left in the pockets of tax payers. With a modest increase in property taxes the short-fall in the budget, resulting from I-695, will be covered. MAYOR KILBURY OPENED THE PUBLIC HEARING TO CONSIDER THE CY2000 PROPERTY TAX LEVY / I-695 IMPACTS. Ms. Tamara Mathews, of 4208 W. Ruby St., spoke in favor of the proposed tax increase and felt an increase was necessary to maintain current service levels for the citizens of Pasco. Ms. Mathews felt the increase was fair and not in excess of what was needed. -2- MINUTES SPECIAL MEETING PASCO CITY COUNCIL NOVEMBER 22, 1999 Ms. Dorothy Schoeppach, Executive Director of Pasco Chamber of Commerce, spoke on behalf of the Board of Directors in favor of the proposed property tax increase and felt it was necessary to prevent a significant step backwards in services for the citizens of Pasco. Mr. Mike Martin, of Franklin County, asked why Council didn't request that the County Assessor to look at property values more fairly. Mr. Martin felt there were instances where property assessments weren't showing the true value of the property. Mr. Crutchfield explained that the City has no jurisdiction or influence over property value assessments. Mr. Steve Taylor, of 6512 Ebbets Dr., spoke in favor of the proposed levy increase as a means to maintain current service levels, specifically, the Road 68 Fire Station. Mr. Joe Hurley, 4004 W. Pearl St., felt staff and Council should look harder for things that could be cut from the budget. Mr. Tom Larsen, 3320 W. Pearl St., spoke against any increase in property taxes. Ms. Janice Vandenbos, of 1114 W. Nixon St., felt the City is providing the appropriate levels of services to the citizens and that the property tax proposal is fair and equitable. Ms. Vandenbos felt it was important to maintain the fire stations, library and Parks & Recreation programs. Mr. Chris Brown, of 6603 Wrigley Dr., was opposed to an increase in property taxes and felt the options presented by staff weren't real options. Mr. Brown felt any increase in taxes should be placed before the voters. Mr. Crutchfield explained that under current law the Council is obligated to fix the next years' property tax receipts by November 30d, of the preceding year. For the year 2000 property tax the Council must act by November 301h of this year. If the matter was delayed until the Spring of 2000, even if the voters approve the levy, those monies would not be collected until the subsequent year. This means that the money needed for 2000 isn't available until 2001. The City would be forced to borrow the money to cover the short-fall and then pay interest on the borrowed money. Mr. James Larsen, of 3320 W. Pearl St., spoke against any increase in property taxes. Mr. Dave Hare, City firefighter, expressed his concerns regarding the closure of the Road 68 Fire Station. Mr. Hare felt that closure of the station may, initially, save some tax dollars, however, it's a very real probability that there would be an increase in fire insurance rates. Mr. Willard Lanning, of 3104 W. Ella St., felt the fire station needed to remain open and was not opposed to a moderate increase in property taxes as long as it is used wisely. Ms. Santa Cooper, of Richland (owns rentals in Pasco), spoke in favor of the proposed tax increase and felt Pasco has a lot to be proud of. -3- MINUTES SPECIAL MEETING PASCO CITY COUNCIL NOVEMBER 22, 1999 Mr. Dan Underwood spoke, not as the City of Pasco Finance Manager, but as a citizen of Pasco. Mr. Underwood noted that $218,000 had already been cut before the current proposal was placed before the Council. The number of employees per population is lower than most other cities in the state. The only services left to be cut would be programs and those cuts would cost more in the long run than an additional $50.00 a year in property taxes. Mr. Strode asked for Mr. Underwood's opinion regarding contracting of services to the private sector. Mr. Underwood stated that the information he has shows that there is a limited success with contracting services. Typically, the work goes back to the public agency after several years. A private contractor has two expenses that a city government does not have: income taxes and a profit motive. As a result, initially, it might appear to be more cost effective for a private contractor to perform the function than the City. Unfortunately, that often doesn't hold up over the years. Mr. Alan Norby, of 114 Carmargo Ln., asked what benefits he would receive from the City if his taxes were increased, because he felt he wasn't receiving any benefit from the City now? Mr. Crutchfield explained that, depending where you were in life, would determine what services a citizen used. There are a number of fundamental services that are available. Mr. Wayne Wilson, of 3391 Dent Rd., stated that based on things he's witnessed and seen in the past, he believes in staff and the Council and he would support their recommendations. Mr. Joe Connell, of Sun Willows, felt that maybe some planned future projects could be placed on hold until funding is available. Mr. Hurley again addressed Council to ask if the TRAC facility could be sold since, in his opinion, it was a money loser. Mr. Strode pointed out that the TRAC facility is owned by the County and the City participates by paying 50% of operating short-fall. In the past three years the subsidy from the City has been steadily decreasing. Mr. Crutchfield confirmed Mr. Strode's statements and stated that next years' projection is approximately $15,000, perhaps zero. Ms. Rosemary Doupe, Executive Director of Pasco Downtown Development Association, spoke in favor of the proposed tax increase. Mr. Dennis Duncan, of 3903 W. Margaret St., had no problem with the need to increase property taxes, however, he objected to the perceived panic of local governments and their rush to raise taxes to cover the impact of 1-695. Following three (3) calls from Mayor Kilbury for comments from the floor, either for or against, the public hearing was declared closed. MOTION: Mr. Garrison moved to have staff schedule a special meeting for November 29, 1999, at 7:00 p.m. to make the final determination for the 2000 property tax levy. Ms. Francik seconded the motion. Motion carried unanimously. -4- MINUTES SPECIAL MEETING PASCO CITY COUNCIL NOVEMBER 22, 1999 ADJOURNMENT: No further business, the meeting was adjourned at 8:25 P.M. C arles D. Kilbu , ,Mayor ATTEST: Catherine D. Seaman Deputy City Clerk PASSED and APPROVED this 6th day of December, 1999. -5-