HomeMy WebLinkAbout2017.10.30 Council Special Meeting PacketSpecial Meeting
AGENDA
PASCO CITY COUNCIL
7:00 p.m.
October 30, 2017
Page
1. CALL TO ORDER:
2. ROLL CALL:
(a) Pledge of Allegiance
3. BUDGET PRESENTATION:
(a) 2018 Preliminary Budget Presentation
2018 Preliminary Budget available for public review on the City's webpage:
http://www.pasco-wa.gov/2018budgetdocument
4. HEARINGS AND COUNCIL ACTION ON ORDINANCES AND
RESOLUTIONS RELATING THERETO:
2 - 10 (a) 2018 Ad Valorem Tax Levy
CONDUCT A PUBLIC HEARING
MOTION: I move to adopt Ordinance No. 4361, providing for the 2018 Ad
Valorem Tax Levy in the City of Pasco in accordance with State Law and,
further, authorize publication by summary only.
5. NEW BUSINESS:
11 - 15 (a) * Bid Rejection: 2017 Trail Rehabilitation
MOTION: I move to reject all bids for the 2017 Trail Rehabilitation Project
because the low bid in the amount of $312,855.00 did not fall below the
small works threshold of $300,000.
16 - 20 (b) * Bid Award: 2017 Trail Rehabilitation
(RC) MOTION: I move to award the Base Bid for the 2017 Trail
Rehabilitation Project to Road Products Inc. in the amount of $186,625.00
and, further, authorize the City Manager to execute the contract documents.
6. ADJOURNMENT.
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AGENDA REPORT
FOR: City Council October 18, 2017
TO: Dave Zabell, City Manager Special Meeting: 10/30/17
FROM: Richa Sigdel, Director
Finance
SUBJECT: 2018 Ad Valorem Tax Levy
I. REFERENCE(S):
Summary of Options and Assessed Value/Tax Rate History Chart
Recommended Ad Valorem Tax Ordinance
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
CONDUCT PUBLIC HEARING
and then,
MOTION: I move to adopt Ordinance No. ____________, providing for the 2018 Ad
Valorem Tax Levy in the City of Pasco in accordance with State Law and, further,
authorize publication by summary only.
III. FISCAL IMPACT:
Sets City share of property tax rate - impact to the General Fund depends on the
options selected.
IV. HISTORY AND FACTS BRIEF:
As part of the annual budget process, per RCW 84.55.120, cities are required to
conduct a public hearing on General Fund revenue sources for the coming year's
budget, including possible increases in property tax revenues. Said hearing is scheduled
for the October 30, 2017 Council meeting.
Following the hearing, Council may choose to pass an ordinance at the same meeting
authorizing the property tax levy for the ensuing year consistent with statutory
limitations. State statue limits the property tax rate the City can levy to $3.60 per
$1,000 of assessed valuation. Other general fund revenue includes sales tax, fees and
charges, utility taxes, fines and forfeitures, and transfers. Property tax, however,
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requires a public hearing and vote separate from the budget and is the primary focus of
this narrative.
Revenues generated through the City property tax levy represent a major source of
funding for essential government services such as: police, fire, parks, community
development, finance, administration, as well as a significant portion of streets and
other services deemed necessary by the Council through the budget process.
As background, the City’s levy rate has not approached the $3.60/1,000 AV limit since
1994. From the period 1994 through 1999, the City’s property tax levy rate was
reduced by the Council by strategically not levying, but instead banking, the then
allowable 6% annual levy increase available at that time. In November 1999, by action
of the State legislature, the Motor Vehicle Excise Tax (MVET) was reduced to $30 per
vehicle, a significant reduction in what in those days was a primary source of revenue
to the City's General Fund. To compensate for this loss and avoid significant reductions
to service, the Council elected to use most of the aforementioned unused or banked
levy capacity. The levy rate for 2000 taxes was increased to $3.07 per $1,000 of
assessed value – still well below the $3.60 maximum.
In 2001, the voters approved Initiative 747 limiting the amount taxing districts could
increase the total property tax levy over the previous year by the lesser of 1% or the
Implicit Price Deflator (IPD) without voter approval. In November 2007, that initiative
was challenged and ruled unconstitutional by the Washington State Supreme Court ; the
Court's ruling returned the limit to the lesser of 6% or IPD. The legislature
subsequently placed into law those limits suggested by I-747. The current legal limit is
the lesser of 1% or IPD.
The IPD differs significantly from a regional Consumer Price Index (CPI) in that
unlike the CPI, the IPD is not based on a fixed basket of goods and services in a region.
The IPD basket spans the nation and is based on changes from year to year with
people's consumption and investment patterns. The IPD figure for the 2018 tax
calculation is 1.0%.
Since final tax levy data has yet to be issued by Franklin County Assessor’s Office,
including information on any increases to State-assessed utilities, the calculations
provided herein are estimates. Furthermore, because the Assessor’s Office is not
allowed to set the levy to exceed what is shown in the City’s budget, we are providing
information on both our estimated calculations and the rounded amount to be used for
presentation in the budget.
V. DISCUSSION:
CITY PROPERTY TAX LEVY OPTIONS FOR 2018
The City Manager's recommended budget has been prepared using an estimated
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property tax levy of $8,392,576, less $209,818 to account for delinquency, and is
represented by Option 1 below. Option 1 reflects an estimated increase of $443,222
over the 2017 levy amount. The proposed increase in property tax revenue is derived
by a combination of enacting the recommended and statutorily allowed 1.0% increase
in the City property tax levy and an estimated increase in assessed valuation due to new
construction and annexation in 2017. The effect of the new construction and
annexation adds to the overall assessed valuation of the City, which in turn serves to
reduce the levy rate for 2018 by $0.115 from the $1.880 per $1,000 of assessed
valuation in 2017 to $1.765 in 2018.
Option 2 depicts the amount the City would collect if the Council chose to adopt the
statutorily allowed 1.0% increase plus an estimated increase due to new construction
and annexation in 2017 and banked capacity of $406,595. This alternative would also
reduce the levy rate for 2018 by $0.029 per $1,000 of assessed valuation from $1.880
in 2017 to $1.851 in 2018 and help to facilitate the progress of Council goals requiring
significant capital investments.
For 2018, the Franklin County Assessor has provided a preliminary City assessed
valuation of $4,753,795,881 which will be used as the basis to calculate 2018 property
taxes. This amount includes new construction of $189,211,600 and an estimated State-
assessed utility of $7,000.
GENERAL PROPERTY TAX LEVY
Options for setting the 2018 levy are outlined as follows:
Option 1 (Recommended)
Based on the rationale outlined above, it is recommended that Council authorize an
increase in the City property tax levy of 1.0%, the IPD, plus accounting for the value of
new construction and an estimated increase in State-assessed utility values at last
year’s rate, and adding those numbers to last year’s total levy. Under this option, the
2018 levy rate calculation reflects a decrease to $1.765 per $1,000 from the 2017 rate
of $1.880.
Total Proposed 2018 Levy: $8,392,576 (Budgeted $8,182,758 factoring $209,818 for
delinquency).
Option 2
This alternative allows for an increase in the City property tax levy of 1.0%, the IPD,
accounting for the value of new construction and an estimated increase in State-
assessed utility values at last year’s rate, and opting to take the City's full banked
capacity of $406,595. Under this option, the 2018 levy rate calculation reflects a
decrease to $1.851 per $1,000 from the 2017 rate of $1.880.
Earlier this year, the State Legislature enacted House Bill 2242 to continue its response
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to the McCleary decision, where the state Supreme Court ruled that the state must
assume responsibility for fully funding "basic education". In the past, school districts
were allowed to ask voters to approve maintenance and operations (M&O) levies.
Starting in 2019, school districts will be limited to levy up to $1.50 per $1,000 AV or
$2,500 per-pupil, whichever is less. The State, in turn, will increase the state property
tax, which takes effect in 2018. Due to this timing issue, the Office of Program
Research estimates that property owners in the City of Pasco will see an increase in
non-City property taxes in 2018. In 2019, the decrease in school district's M&O levies
will take effect, reducing the non-City property taxes. Due to the expected increase in
property taxes in 2018, Staff recommends that Council wait to consider utilizing the
City's banked capacity until 2019 as a funding source to service debt for major capital
projects associated with Council goals. Use of banked capacity is an anticipated topic
for the 2018 Council retreat.
Total Proposed 2018 Levy: $8,799,171.
BASIS FOR CITY MANAGER RECOMMENDATION ON PROPERTY TAX
LEVY
Over the past two decades or more, the City has experienced rapid growth and the one-
time revenues that go along with such growth; construction sales tax and development
fees, as well as increases in assessed valuation. As new areas within the City have
developed or annexed, and other portions of the community have matured, demand for
public services has increased significantly. While the City continues to experience
moderate growth, it can no longer rely on the kind of growth-related revenue increases
experienced earlier in this decade and the previous decade.
In response to increased population and associated demands for public services, over
the past few years the Council has markedly enhanced critical services in an attempt to
better align services with the needs and demands of the population. The request for the
addition of just one key general fund position this year, a procurement s pecialist,
demonstrates the success of Council in narrowing that gap between demand and
delivery capacity. As the City has grown, its procurement activity has increased
proportionally, driving the need for a robust procurement program. A significant
benefit of this program will be the immediate upfront cost savings of finding goods and
services at the best price. This furthers Council's goal of Financial Sustainability. Staff
has also budgeted approximately $1,000,000 for a one-time cost associated with the
move to a single dispatching system expected during the first quarter of 2018.
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STATUTORY DEADLINE FOR PROPERTY TAX DETERMINATION
Finally, for the Franklin County Assessor to levy property taxes, the City is required to
certify property tax levies with the County by November 30 of each year.
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OPTION 1 OPTION 22017 Levy $7,949,354 $7,949,354 $7,949,354Increase of IPD 1.000% $79,494 $79,494Increase in State Utility AV (EST) $7,000 $7,000New construction times 2017 Le$189,211,600 $355,752 $355,752Annexation $519,700 $977 $977Banked Capacity $0 $406,595Total Levy Amount$7,949,354 $8,392,576 $8,799,1712015 AV for 2016 $3,937,446,2022016 AV for 2017 $4,227,977,7522017 AV for 2018 $4,753,795,881Tax Levy Rate 1.880 1.765 1.851Change from Current 2017 Levy$0 $443,222 $849,817Rate Change from Current 2017 Levy- (0.115) (0.029) Cost per $1,000 on a $189,000 AV Home $355.4 $333.7 $349.8Net Change ($21.7) ($5.5)2017 General Levy RateCity of Kennewick 2.170$ City of Richland 2.664$ Cost per $1,000 on a $189,000 AV HomeCity of Kennewick 410$ City of Richland 504$ Current 2017 Tax Levy1.0 (IPD) Increase + New Construction + AnnexationGeneral Fund Levy Options1.0 (IPD) Increase + New Construction + Annexation + Full Banked CapacityPage 7 of 20
1.99
3.94
4.23
4.75
$0.000
$0.500
$1.000
$1.500
$2.000
$2.500
$3.000
$3.500
$4.000
$4.500
$5.000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018ASSESSED VALUE IN BILLIONSASSESSED VALUE
$2.391
$1.937
$1.880
$1.765
$1.7000
$1.9000
$2.1000
$2.3000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PASCO PROPERTY TAX LEVY RATE HISTORY
(GENERAL FUND PORTION)
PER $1,000 OF ASSESSED VALUE
$114,308
$174,105
$236,970
$302,616
$385,693 $388,857 $399,106 $406,595
2010 2011 2012 2013 2014 2015 2016 2017
BANKED LEVY CAPACITY
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ORDINANCE NO. ________
AN ORDINANCE PROVIDING FOR THE 2018 AD VALOREM TAX LEVY, A LEVY
BONDS IN THE CITY OF PASCO IN ACCORDANCE WITH STATE LAW.
WHEREAS, the City is, pursuant to RCW 35A.33.135, authorized to set by ordinance the
amount to be raised by ad valorem taxes; and
WHEREAS, a public hearing was held on October 30th, 2017, as required by RCW
84.55.120, regarding the revenue sources for the City's following year Budget with consideration
of a possible increases in property tax revenues levied including ad valorem taxes; and; NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DO ORDAIN
AS FOLLOWS:
§1. The City Council of the City of Pasco (the population of which is greater than 10,000)
has met and considered its budget for the calendar year 2018;
§2. The City Council of the City of Pasco after public hearing and after duly considering
all relevant evidence and testimony presented, determined that the City of Pasco requires a regular
levy in the amount of $8,392,576, which includes the 1.0% allowable percentage increase in
property tax revenues from the previous year and does include amounts resulting from the addition
of new construction, improvements to property, and any increases in the value of state-assessed
property, and amounts authorized by law as a result of any annexations that have occurred and
refunds made, in order to discharge the expected expenses and obligations of the district. RCW
84.55.120 requires a specific statement regarding the amount of any increase in regular property
tax from the previous year. The actual general levy amount from the previous year (2017) was
$7,949,354. The City Council of the City of Pasco hereby authorizes the following increase in
the regular property tax levy to be collected in the 2018 tax year.
The dollar amount of the increase over the actual levy amount from the previous year shall
be $79,494 (seventy-nine thousand four hundred and ninety-four dollars) which is a
percentage INCREASE of 1.0% from the previous year. This increase is exclusive of additional
revenue resulting from the addition of new construction and improvements, newly constructed
wind turbines to property, any increase in value of state assessed property, and any additional
amounts resulting from any annexations that have occurred and refunds made.
The property tax from the new construction to be included in the actual levy is calculated
to be $355,752. This number is the result of the amount of new construction and improvements to
property of $ 189,211,600, provided by the Franklin County Assessor’s Office, multiplied by 2017
(prior year) levy rate of $1.880 per $1,000 of that value. The property tax from annexation to be
included in the actual levy is calculated to be $977. This number is result of Annexation property
values of $519,700 provided by the Franklin County Assessor’s Office, multiplied by the 2017
(prior year) levy rate of $1.880 per $1,000 of that value. The property tax from the increase in state
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assessed utilities to be included in the actual levy is calculated to be $7,000. This number is an
estimate as Franklin County Assessor’s Office has not received valuation for state assessed
utilities.
§3. A tax for the following sum of money which includes new construction to defray the
expense and liabilities of the City of Pasco be and the same is hereby levied for the purposes
specified against all taxable property in the City for the fiscal year 2018;
General Expense, including Councilmanic Bond Debt Service $8,392,576
§4. A certified copy of this ordinance shall be transmitted to the Franklin County Board of
Commissioners and to the Franklin County Assessor on or before November 30, 2017;
§5. This Ordinance shall take effect five (5) days after passage and publication;
Adopted by the City Council of the City of Pasco this ___ day of ____________, 2017.
_____________________________
Matt Watkins
Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________ ___________________________
Daniela Erickson Leland B. Kerr
City Clerk City Attorney
Page 10 of 20
AGENDA REPORT
FOR: City Council October 19, 2017
TO: Dave Zabell, City Manager
Rick Terway, Interim Public Works Director
Special Meeting: 10/30/17
FROM: Dan Ford, City Engineer
Public Works
SUBJECT: Bid Rejection: 2017 Trail Rehabilitation
I. REFERENCE(S):
Vicinity Map
Bid Summary
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
MOTION: I move to reject all bids for the the 2017 Trail Rehabilitation Project
because the low bid in the amount of $312,855.00 did not fall below the small works
threshold of $300,000.
III. FISCAL IMPACT:
Fund 130 – Street Overlay - $0
IV. HISTORY AND FACTS BRIEF:
This project consists of rehabilitation to two trail sections, the section starting at
Chiawana Park and running east along the Columbia River ending at the intersection of
the Ivy Ln. trail and the section that begins near Road 100 and runs east along I-182
ending at Road 44. The sections needing improvements are severely deteriorated and
becoming unsafe to trail users. The planned repairs consist of crack sealing, asphalt
patching, replacement of severely deteriorated sections, and root removal.
V. DISCUSSION:
On September 26, 2017, the City received 2 bids for the project both of which were
over the Small Works threshold of $300,000.
Staff has reviewed the bid submittals and recommend rejection of the contract.
Page 11 of 20
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2017 TRAIL REHABILITATION – CHIAWANA TRAIL
VICINITY MAP
BEGIN CHIAWANA
TRAIL - 0+00
References
--- Project Trail
Page 13 of 20
2017 TRAIL REHABILITATION – I-182 TRAIL
VICINITY MAP
BEGIN I-182 TRAIL
- 0+00
References
--- Project Trail
Page 14 of 20
BID SUMMARY I
2017 T73"RehabIIIt3tI°"Arrow Concrete &Asphalt Construction Ahead Inc.dba
_E"9I_"ee'Ys Specialties,Inc.Pavement Surface ControlProjectNo.17020 Estimate
Cit Contract Number:MN3-OV-9R-17-00 Spokane Valley,WA Kennewick,WA
Bid Security 5%Bid Bond 5%Bid Bond
ITEM UNIT I UNITPRICE AMOUNT I UNITPRICE AMOUNT UNITPRICE AMOUNT
._,:
Mobilization L3 $20.000 00 $20,000 00 $29,500.00 $29,500.00 $10,000.00 $10,000.00
Crack/Joint Sealing ,.$3.07 $9,210.00 $1.00 $3,000.
00JLAsphaItPatching$24.00 $132,000.00 $30.00 $165,000.00
Root Barrier ‘
«$7.50 $3,000.00 $31.25 $12,500.00
Tree Removal .$3000 00 $2,500.00 $7,500.00 $3,125.00 $9,375.00
Roadway Excavation Incl.Haul $8 50 $13.600.00 $13.50 $21,600.00 $27.50 $44,000.00ICrushedSurfacingBaseCourse(4')
I
87 00 $11,200 00 $13.50 $21,600.00 $25.00 $40,000.00
HMACI.3/Bin PG 64-28 (2")$15 00 $24,000.00 $27.00 $43,200.00 $37.50 $60,000.00
Asphalt for Fog Seal
A
$0 45 $11,835 00 $1.15 $30,245.00 $0.65 $17,095.00
Project Temporary Traffic Control 8500 00 8500 00 $15,000.00 $15,000.00 $7,500.00 $7,500.00
$205,685.00 $312,855.00 $368,470.00
£Om\I03(J'I-I><.-)I\)_\0
CITYENGINEERSREPORT
C°“”‘ifJ.'Ei,EsB.iE’.$.¥”§£‘§N°RP§£Ei’i§§§Ei’Li£”3E§§E’0"°F PAS“
.''5“APPROVALBYPUBLICWORKSDIRECTORIRECOMMENDREJECTIONorALLBIDS.
2 017 Trail RehabilitationCITYOF
Project No.170201‘City Contract No.MN3-OV-9R-17-00
/é BID DATE:September 26,2017/0 To 7 FILE;2017TraiI Rehabilitation.pubDAECITYENGINEER
SHEET 1 of 1Page 15 of 20
AGENDA REPORT
FOR: City Council October 26, 2017
TO: Dave Zabell, City Manager
Rick Terway, Interim Public Works Director
Special Meeting: 10/30/17
FROM: Dan Ford, City Engineer
Public Works
SUBJECT: Bid Award: 2017 Trail Rehabilitation
I. REFERENCE(S):
Vicinity Map
Bid Tabulation
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
MOTION: I move to award the Base Bid for the 2017 Trail Rehabilitation Project to
Road Products Inc. in the amount of $186,625.00 and, further, authorize the City
Manager to execute the contract documents.
III. FISCAL IMPACT:
Fund 130 – Street Overlay - $186,625.00
IV. HISTORY AND FACTS BRIEF:
This project consists of rehabilitation to two trail sections, the section starting at
Chiawana Park and running east along the Columbia River ending at the intersection of
the Ivy Ln. trail and the section that begins near Road 100 and runs east along I-182
ending at Road 44. The sections needing improvements are severely deteriorated and
becoming unsafe to trail users. The planned repairs consisted of crack sealing, asphalt
patching, replacement of severely deteriorated sections, and root removal.
The project is broken into a Base Bid and an Additive Alternative #1. The base bid
includes the minor repairs of crack sealing and asphalt patching. The Additive
Alternative consists of replacement of severely deteriorated sections and removing the
roots from causing future issues.
Page 16 of 20
V. DISCUSSION:
On October 25, 2017, the City received 2 bids for the project. The lowest bid was from
Road Products Inc. in the amount of $186,625.00.
Staff has reviewed the bid submittal and found no exceptions or irregularities and,
therefore, recommends award of the contract to Road Products Inc.
Page 17 of 20
References
‐‐‐ Project Trail
2017 TRAIL REHABILITATION – CHIAWANA TRAIL
VICINITY MAP
BEGIN CHIAWANA
TRAIL ‐0+00
Page 18 of 20
References
‐‐‐ Project Trail
2017 TRAIL REHABILITATION – I‐182 TRAIL
VICINITY MAP
BEGIN I‐182 TRAIL
‐ 0+00
Page 19 of 20
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