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HomeMy WebLinkAbout061623 Financial Sustainability Task Force-Added After MeetingIII "'t'a "'f � Ili'°"'1'a IIIA °° III IIIA IIIA III IIS "'':a III IIIA III IIS III "'':a IIS IIIA III "'':a'i �3 I'a'n ° Financial Stistainability "FaskRN F: ra 't':a RqpIr'°'I':a "' '.) City U. yin it 6...6. 23 city,,f ort " , d To nsen llurlpose The purpose of' this report is to present the findings and (�&rts of' the 1-irionciol Sustoinobility 7-6sk I-Orce to City Council, including a set of'recommendations and options for, the City on itsjourney toward greater,financral sustainability. The report is meant to inform the near� term and longer� term decisions by the City Council and the community meant to deiver, sustained, .�fjicr.int fbir; and affordable provision of' basic° infrastructure and services that, underpin a healthy natural environment, meaningful economic development, and a high quality ofl*for, residents. The 7-6sk I-orce recommendations focus holistically on a// city services with an emphasis on priorities determined through widespread community engagement and planning over, a number, ofy(�?ars. Fhe two proposed packages either, sustain current levels of" service or, enhance current levels of'service. Financial Sustainability Task Force Draft Report to City Council Page 2 of 32 Financial sustainability is critically important for the City to meet ongoing and evolving community needs over the long-term. The aim is to deliver sustained, efficient, fair, and affordable provision of basic infrastructure and services that underpin a healthy natural environment, meaningful economic development, and a high quality of life for residents. This means carefully balancing the community's ability to generate revenues to match the cost of services and obligations over the long-term. This work has an impact on each and every one of us. The City owes it to our current and future generations to get that balance right. The purpose of this report is to present the findings and efforts of our 4 -member Council -appointed Financial Sustainability Task Force to City Council, including a set of recommendations and options for the City on its journey toward greater financial sustainability. The report is meant to inform the near-term and longer-term decisions by the City Council and the community on its journey toward greater financial sustainability. Our Task Force recommendations focus holistically on all city services with an emphasis on strategic priorities determined through widespread community engagement and planning over a number of years, including core services, housing, streets, and parks. While nearly infinite interrelated choices exist to move forward in some way with financial sustainability, there are three most basic scenarios for how to move forward: do nothing, sustain current services, and enhance services. After review of copious materials, robust discussions, and applying criteria to various choices, the Task Force has concluded that doing nothing is not an option. Thus, this report focuses on packages of inter -related and interdependent tax and non -tax options to sustain current services and, in some cases, enhance services. These two packages are described briefly below and further in Section IV of the report. Staff has prepared packages that are the most feasible for meeting the service levels for both sustaining current services as well as providing enhanced services. Package A: Sustain Current Service Core services reliant on economic development initiatives, including support of diverse commercial growth, possible future annexation of Glen Cove, implementation of a parking management program, increasingthe utilitytax an additional 2%abovethe current 2023 rate, and utilizing the banked capacity revenue. Estimated revenue: $2.21m - $2.77m. Comprehensive Streets reliant on Transportation Benefit District (TBD) sales tax, Real Estate Excise Tax (REET), Fees for Service, and Fee in Lieu or Impact Fees. Estimated revenue: $1.06m. Parks reliant on utility tax, parks foundation, impact fees, and to some degree, Glen Cove annexation. Estimated revenue: $365k. Pool reliant on regional Metropolitan Parks District (MPD) property tax and Fee for Services. Estimated revenue: $3.05m. Financial Sustainability Task Force Draft Report to City Council Page 3 of 32 Affordable Housing reliant on Fee in Lieu program, affordable housing grants, and sale of City property. Estimated revenue: $1.15m. Library operations reliant on levy lid lift on general property tax revenues. Estimated revenue: $260k. Package B: Enhance Services Core services reliant on economic development initiatives, including support of diverse commercial growth, possible future annexation of Glen Cove, implementation of a parking management program, increasingthe utilitytax an additional 2%abovethe current 2023 rate, and utilizing the banked capacity revenue. Estimated revenue: $2.21m - $2.77m. Comprehensive Streets reliant on Transportation Benefit District (TBD) sales tax, Real Estate Excise Tax, Fees for Service, and Fee in Lieu or Impact Fees, Lodging Tax. Estimated revenue: $1.08m. Parks reliant on utility tax, parks foundation, impact fees, Real Estate Excise Tax (REET) and to some degree, Glen Cove annexation. Estimated revenue: $465k. Pool reliant on regional Metropolitan Parks District (MPD) property tax and Fee for Services. Estimated revenue: $4.35m. Affordable Housing reliant on Fee in Lieu program, affordable housing grants, and sale of City property. Estimated revenue: $1.15m. Library operations reliant on levy lid lifts on general property tax revenues. Estimated revenue: $520k. The City Council will receive these recommendations in July when the report is final. Deliberations are expected overthe coming months with consideration of policy decisions and future budgets. Deliberations and community engagement is also expected into the coming years, as it will likely take many years to craft and implement sustainable solutions. One thing is certain: inaction will only put us further at risk and potentially jeopardize a more sustainable future for us all. In contrast, proactive, sustained, collaborative efforts will help us balance our community's aspirations with financial realities and prepare us for the future that we choose — a future that is more stable, more sustainable, fairer, and better for us all. Financial Sustainability Task Force Draft Report to City Council Page 4 of 32 DIDL hr.itr0ductiiiOiin & Ba;IIIkgr0uir°d Financial sustainability is critically important for the City to meet ongoing and evolving community needs over the long-term. Providing basic infrastructure and services that underpin a healthy natural environment, meaningful economic development, and a high quality of life for residents means carefully balancing the community's ability to generate revenues to match the cost of services and obligations over the long-term. This work has an impact on each and every one of us. The City owes it to our current and future generations to get that balance right. The City of Port Townsend is in a solid financial position at the current time due to a number of unusual circumstances. Even with significant challenges and substantial revenue reductions caused by the COVID- 19 pandemic, the City managed to adapt, innovate, and collaborate to sustain operations and to stay within its budgetary constraints. Additionally, federal and state COVID support provided funding to help the City navigate these last three years. This current financial condition provides the perfect timing and context to evaluate the long-term financial sustainability of the City. Pre-COVID outlooks showed significant future financial challenges threatening the public services we all depend on and enjoy. Disinvestment in streets and parks are two of the largest indicators illustrating these challenges. Sustaining services and service quality in the face of increasing service costs and while tax revenues are not keeping pace with those costs defines the fundamental problem. That said, this problem may not be fully understood by the public who depend on those services. The problem is compounded by the present need to address numerous deferred maintenance projects such as streets, city buildings, parks, and fleet for which limited or no direct revenue is currently available. Finally, the current labor and housing market put additional stresses and challenges on the Port Townsend City government as well as on our local businesses, organizations, and the public we serve. It will take many years to craft and implement sustainable solutions. The longer we delay action, the more likely we are to suffer a major setback and the more difficult the work will be to ensure our financial sustainability well into the future. However, working together closely as a community will help us balance our diverse aspirations with financial realities and prepares us for the future. Doing so is also a promising opportunity to align expectations, build strong and productive partnerships, develop lasting trust, and draw our community closer together as we chart a course to a better future for all. Financial Sustainability Task Force Draft Report to City Council Page 5 of .32 Vision and IIC';°)eired Outcorne While every individual's vision for the future may be different, the general vision for this work is for the sustained, efficient, fair, and affordable provision of basic infrastructure and services that underpin a healthy natural environment, meaningful economic development, and a high quality of life for residents. Put another way, the work aims to carefully balance the community's overall needs for services that deliver important outcomes with our ability to generate corresponding revenues over the long-haul. The vision and outcomes require thoughtful, deliberate, proactive, and courageous collaboration and decision-making by the City Council and the community at large. Solving for the future our community wants also means a systems -approach to solve for the whole instead of individual pieces; this is represented by interconnected intervention packages and recommended actions described in Section IV below. It is meant to weave together core service needs for a functioning and effective city government alongside specific community -identified funding priorities of housing, streets, and parks. The specific outcome of this Financial Sustainability Initiative effort is a 10+ year implementation strategy meant to ensure: • Core services are sustained in order to provide a baseline level of service for an effective and functioning city government. • Investment in housing to address the current housing crisis and improve housing attainability so that all income levels have access to quality, attainable housing. • Investment in the street system is initiated in a preventative maintenance program and to claw back from lack of investment over the past 20+ years. • Investment in the parks system to address a pool that needs to be replaced and improvement/development of parks and recreational facilities over the longterm while sustaining maintenance of the facilities the City already is responsible for maintaining. ""1narrc'4Su tairmab llli'ty..Illia k III""'rorc'e and IlVllerrWber The City of Port Townsend established a four -member Financial Sustainability Task Force, appointed by the Mayor and Council through an application system, to assist the City with a review of the City's current financial position and to identify options for the future. The Task Force began its work at their first meeting on November 18, 2022. They have met six subsequent times, usually for 2 -hour blocks and with deep review of significant materials in-between meetings. The Task Force also met jointly with the City Council on May 8, 2023, to discuss the work they had completed to date and to provide City Council a chance to ask questions and dialogue around findings to date. That meeting is not included in the graphic below. Financial Sustainability Task Force Draft Report to City Council Page 6 of .32 ilii ilii '11111 ml �o � oVm uo 000i Doi a od000ii Coiio ui 000im... mi"ui o00 oil uo mi oioo 0o imiAm Doli ori imi m Doli o floor m imi of mom o0N.", HH Usk i .....,, 0 pN) 'IN slIficir'rDi<fc,ua „ I! h,I ,uce Ir o IFu�€uo�'°� h��M o. 1lu�unu� h��i i Ilmu��et �„� n� �qumm, � M �w���,ui��a�°� � v n I�ui€may,. .,.,.. III°'� m•~s �i� III ii m°m 111 1Z j::mom t tc� 111�u ejjjl;�mam t t�ci CouuuiumclH couindI V°�illl �Ilii��il ulp�l a ���II�' Il�ul�lill ul ul �; �� The Task Force has been working toward a recommendation of long-term financial sustainability options to City Council in mid -2023, represented by this report. The Task Force has reviewed information and materials regarding municipal budgeting, the City's current department budgets and service levels, community engagement, financial forecasting, priority initiatives, peer city comparisons, level of service considerations, revenue options and strategies, and evaluation criteria for funding strategies. A selection of those materials can be found in the Appendix (Section VI) and all meeting minutes, agendas, materials, and video recordings can be found at: https:�lcityofpt,usJen�a�ept�pa�eJfinancial-sustainability-initiative. All the meetings have been open to the public. Public comment was available during all these meetings. Members of the Task Force include: • Catharine Robinson • Earll Murman • John Nowak • Rick Jahnke Bir'lief 'f 'Services, Core Service INeeds, and Area oil Priority Services and Cost The City of Port Townsend directly provides a number of important services to the community. The City also works in partnership with other agencies who may play a more direct role in some service provision, as per below: Financial Sustainability Task Force Draft Report to City Council Page 7 of .32 � I MIN V WAN = OW, =III Z all 025222 WWA 110 N MM, SEIRVICIES PIROV11DED By"rHIE CITY • Development Services. Planning, Permitting, inspections • General Government. City mainagerneint, Ilegall services, finance, huiman resources, IT • ILilbrary.. Library services • IParks, Recreation & Community Services. Park maintenance, irecreationall activities • Pollice- Public safety services • Public Works. Maintenance of physical infrastructure and transportation systems • Solid Waste: Garbage and recycling services • Water/Sewer: Drinking wateir, sewer treatment services SEIRVICES P111OV1111 IED 13Y.11EFIFIERS011Y COUNTY Assessor. Assessment of real property Economic Development. Business attraction and retention Emergency Mlainagement: Disaster planning, mitigation, and recovery Environmental Public Health: Water quality maintenance, preservation of open .space, IDer-witting of waste systems Municipall Court: Processing of cases and collection of fines Public Health: COMMUniGable disease management, family health services Electricity (viiia Jefferson County PUD) Fire prevention andl emergency response (via East Jefferson Fire and Rescue) K-112 education (via Port Tovirsend School District) Port maintenance (via Port of Port Townsend) Public transit (via Jefferson Transit Authority) 911 services Ivia Jeff{ rm) A few key examples of services provided by the City are above. This is not an exhaustive list. The following provides the next layer of deeper detail — but is also not an exhaustive list: Deliver on critical opet ations, ongoing statutory responsibilities, ond core City functions Legal services Utility billing and cashiering for variety of City services Insurance and risk management Annual reporting and municipal audits Records management Business license compliance and business and occupation tax reporting Responding to public records requests Purchasing administration and accounts payable Public meetings Payroll Training of elected members, staff and volunteers Information Technology — including network security and user support Liaison with Courplimembers and stewardship of political decision-making Books & material circulation including curbside delivery, databases, 0 -books • Community leadership and partnership with other agencies and organizations and e-audiobooks, children's web resources, grab bags, interlibrary loan Workplan and budget development; integration and oversight of City operations Programs and events, including virtual programming, youth programming Compliance with internal and external policies, regulations and requirements and adult programming Coaching, mentoring and performance evaluation of employees Staff response to patron requests and associated services Special projects, communication, engagement and advocacy Access to technology Code compfiance Emergency response Permitting review and approval Patrol, investigation Building inspections Special events Current planning Emergency preparedness Long-range pianning Records requests Recruitment, including development of a recruitment strategy Training Union contract negotiations Policy development and refinement Retention, including a retention strategy and employee recognition program Street maintenance, operations and programming Performance evaluation Stormwater operation and maintenance Employee engagement, engagement survey and manager follow up Wastewater collections and treatment and compost Coaching, mentoring and training programs Management of trash collection and recycling Internal HR -related policy development, application and evaluation Drinking water treatment and distribution Facilities management, oversight, property management, rentals and event permitting Engineering, major capital projects • City Vollunteeir Program, including adopt -a -trail, adopt -a -park and Library/Police volunteers Development review for infrastructure extension Budgets and financial reporting Right of way management including urban forestry • Forecasting and financial analysis Fleet operations, maintenance, and replacement Management of parks and trails systems The cost of city services broken down by department is below. Note that the utilities/enterprise funds like water and wastewater are not included since they are required to be separate self-sustaining budgets based on rates: Financial Sustainability Task Force Draft Report to City Council Page 8 of 32 THE COST OF CITE` SERVICES Puml,vlic wwks P'ark., kaperrewuon, a.md Cwnimmity Sas rvicea, f'pcwwv'oo)g my i Community I)evelopnient L!1:.aI''sn'Y Aai;Emini°trona', r,Fuawo ice, oncl IHV Finally, given local, regional, statewide and federal complexities, it is no wonder that funding sources and recipient services are often misunderstood. For 1 °r�JefiC©m instance, only 11% of local (Port Townsend) sales tax ....... ...... .....' m revenue and 16% of property tax revenue go directly yf9U)Cn IFN430 f*OWN, to the City of Port Townsend. A range of other °�"�` �� r���„11, i, �a a ref regional municipalities as well as the State of 70 state of IA/A",I Washington receive the remaining majority of sales and property tax funding generated locally in Port Townsend. This means that those services provided above are not funded to the degree that many in our community believe they are, which often creates a mis-match in community expectations with ability to provide services based on revenue. Core Services Core services are fundamental to a functioning city. They include attending to critical operations, ongoing statutory responsibilities, and core functions that individuals, businesses, and organizations rely on to survive and thrive. For instance, City provides for public health and safety through necessary infrastructure for safe transportation. The City provides community policing to ensure an environment where community members can safely engage in day-to-day activities. The City supports a public library that provides community programming, services and safe places for everyone. Planning and Community Development provides planning, permitting and inspections for needed housing services. All core services are managed through the general government of the City. The City also provides for public health and safety through necessary infrastructure like water and sewer systems and solid waste removal. These systems are required to be self-sustaining through rates, so we are not considering them as core services as part of this work. Financial Sustainability Task Force Draft Report to City Council Page 9 of .32 Core services also underpin the success of all city departments and all other city initiatives. Simply put, without core services, all other initiatives and services suddenly or eventually fail. For instance, the City relies on functioning buildings and facilities —from the carpet to the roof —to ensure other services, from police to permitting, can be provided. Historically, the City has not funded repair and replacement of key building systems like replacement of roofs, HVAC systems, painting, elevators, and carpets. Therefore, facilities needs arise as large surprise cost items every 20 years or so and either require emergency funding or further deferral, often to the point of failure and subsequent disruption of the other systems under the same roof that rely on those core services. Other examples of core service needs where deferral may create significant risk or disruption from failure include cybersecurity and IT systems, fleet, financial audits, public records management, human resource management, and union agreements. Housing Housing is vital to community prosperity. Multiple types of housing at many different affordability levels was historically key to sustaining a healthy workforce contributing to the City's growth. However, over time increasingly restrictive zoning practices in conjunction with inflation, high labor costs, and the 2008 recession has limited housing with trends towards larger market rate units. The City's population has only grown to 10,000 people even though the pre -platted historic lots in the City were designed for more than 20,000 people. Housing uniquely generates revenue in the form of property taxes, construction tax, and real estate excise taxes, but there is little revenue from the City to reinvest or subsidize missing middle "attainable" housing, which the City defines as affordable to those earning between 80-200% Area Median Income (AMI). Adding more housing in a dense urban pattern can help reduce utility costs for ratepayers. The City has a minimal source of money, $25,000 annually, generated from 0.1% of sales tax that helps fund affordable housing and homeless housing programs targeting those earning less than 80% of area median income for a family of four. The funding is pooled with money from Jefferson County and allocated through a Housing Fund Board grant program and is insufficient to meet City affordable housing unit targets. There is no other dedicated revenue source to support housing and the infrastructure (streets, sewer, water line extension) needed for construction, particularly funding to help construct missing middle "attainable" housing. Several tools described in this report as well as the White Paper Exploration of Strategies for Supporting Infill and Affordable Housing Related to Infrastructure Development (link to draft report in the Appendix, Section VI) could provide more funding such as an infill affordability strategy that links zoning reform (already in progress) to in lieu density fee payments, which charge a fee for homes that do not meet minimum density used to pay for middle housing infrastructure. The revenue source would need to subsidize fee payment for affordable and middle housing, which would require a budget of $1.78 million annually assuming $30,000 in fees waived per eligible unit. The actual number of units that are supported will depend on the revenue and the amount of subsidy needed per unit. As a program develops, success will depend on the City's ability to generate revenue to meet the demands associated with the number of units requesting support. The primary method for the City to provide this support is through the development of infrastructure, which is often lacking and a fundamental requirement for the development of housing. In addition to supporting the development of attainable units through subsidizing infrastructure, a second key housing strategy is to support housing through the development of land. It is estimated that direct reoccurring investment in preparing City property for neighborhood development such as the 150 -unit neighborhood the City is planning for Evans Financial Sustainability Task Force Draft Report to City Council Page 10 of .32 Vista would require an enhanced budget of $442,000 per year. By supporting housing growth in a carefully planned manner, the City can balance the development of private attainable housing to support middle income and wage earner households and further support public or non-profit owned affordable housing. This balance of providing diverse affordability options also impacts tax revenues since most social housing is exempt from property tax. All housing provides the benefit of construction sales tax; however, the main source of revenue to support housing likely comes in the form of fees. A common objective for all housing is to prioritize density in order to reduce the overall tax and utility rate burden for the entire community in an effort to facilitate a more sustainable future. Streets The City is developing a Comprehensive Streets Program in response to the rapid deterioration of the 81 miles of City -maintained streets. The current investment in streets of $1.2 million per year does not include funds for preservation and repair of street surfaces or funds for matching grants. This pattern of deficient investment has resulted in increasing debt and many streets falling into a state of disrepair that requires complete and costly reconstruction. The City Council Infrastructure and Development Committee reviewed options for street investments including a no -net loss alternative where an additional investment of $750,000 per year maintains what we have but does not make improvements to the streets that are in disrepair. The Infrastructure and Development Committee's preliminary evaluations recommends increasing street investments by $1.5 million per year to a total of $2.7 million per year in order to claw back the condition of city streets to a state of good repair. This claw back period is likely on the order of 30 years of sustained investment. Parks Port Townsend has continued to love its parks, recreation, and trail system. The City manages 190 acres of publicly owned land, maintains and contracts operations for an old pool, hosts a nature park, maintains two dog parks and 33 miles of public trails, contracts operations for a 9 -hole community golf course, hosts the pickleball club with five permanent and more temporary courts, and enjoys a great collaboration with Jefferson County Parks and Recreation. This is done on a minimal budget, about 1/3rd of the nationwide median for communities the size of Port Townsend. The City does not have dedicated funding for parks and recreation. The general fund budget currently maintains all our parks and recreation assets along with police, streets, and city administration. Funding in this manner is never guaranteed and must be approved annually by City Council. Approximately $1M is spent currently to maintain what we have, contract the pool and golf course operations, and work to keep our parks open. A budget of approximately $3M would keep parks and playgrounds open, establish a capital program to take care of deferred maintenance and replacements of tired assets. A budget of about $4.5M would be required to establish a Parks Department dedicated to maintaining and enhancing the current level of service, including replacement of the current Mountain View pool. I..ev6ol" Service While nearly infinite interrelated choices exist to move forward in some way with financial sustainability, there are three most basic scenarios for how to move forward. Each scenario is a pathway with particular Financial Sustainability Task Force Draft Report to City Council Page 11 of .32 impacts to our community, both in the short and long-term. Each pathway results in a level of service for those services and needs requested and required by our community, as described above. w, C) o Nothing .......... ................................................................................................................................ Sustain Current Services Enhance Services l'I"""""""""""""""""" u,u,u,u,u,u,u,u,u,u,u,u ,""Il""I"""",""Il""I.11'.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11 The first pathway is to do nothing. This means no new revenue and reductions of current service levels since current funding does not keep pace with inflation and costs. While the City is required to balance a budget each year, under the do nothing scenario, the current service level would drop significantly by 2029 as reserve funds would be utilized to plug the interim gaps (see chart below). This looks like a "fiscal cliff." It means things like significant service cuts, cuts to hours, and cessation of certain functions currently provided by the City, as the City is required by state law to balance the budget. The City has previously made such service level reductions to balance the budget. As an example of the do nothing pathway, city streets would continue deterioration and become worse over a short time period. This is largely because revenues for streets fell significantly with the state initiatives of the late 1990s related to reduction of car tabs. While some cities have developed new revenue sources in order to avoid a do nothing pathway, Port Townsend has not yet developed new revenue sources for streets. The second pathway is to sustain current services. This means "no net loss" of current services and yet still requires an increase in investments to keep service levels constant. It likely means no new services, but also no "fiscal cliff" like the do nothing pathway above. This pathway requires efficiencies, as do all of them. Using the streets example, decay of city streets would slow and then mostly stop with sustained investment, but they would not become better than they are today. This "sustain" pathway for streets Financial Sustainability Task Force Draft Report to City Council Page 12 of .32 ENDING FUND BALAR` C & RSR SEAR" T, RGET ) rdurer 1, Streetp, x EEIET, Cour Svcs, ILDedt Funds) C" $ 5 I1 I I� III �. �'� wl�l art Awa L" �I 11 UID9 YUf� III I IJ y' .i g, itµ. "". P!8 w0" Rd4 0fY hr �" 4..1* , a CJ N M N rd Y' i4;] k d;NY N N5"� M �.4 NN �, � 1 e3 M iN.d P4 hE 1 C,1 'N:1' d 0 C�k N CSI M I"d 0 N Q M 4 S as IIIIP1111IMIj Trjt aaV EIrdhrj Fund Ba Aance _,Toal PRa"VM:p Re wid..rves The second pathway is to sustain current services. This means "no net loss" of current services and yet still requires an increase in investments to keep service levels constant. It likely means no new services, but also no "fiscal cliff" like the do nothing pathway above. This pathway requires efficiencies, as do all of them. Using the streets example, decay of city streets would slow and then mostly stop with sustained investment, but they would not become better than they are today. This "sustain" pathway for streets Financial Sustainability Task Force Draft Report to City Council Page 12 of .32 would require approximately $750,000 of new annual investment. At the City-wide scale, sustaining current services would require an additional investment of approximately $4.9m above current funding levels across all general government functions. The third pathway is to enhance services. While efficiency continues to remain important and necessary and there are trade-offs between desired services, new revenue allows for enhancement of services. Increasing investments above the sustain services level allows the community to realize the vision that the community desires. Using the streets example again, city streets would gradually improve over time, eventually leading to a system -wide improvement over the coming decades. The approximate investment beyond current levels to enhance streets is estimated to be $1.5m. Enhancing all general government services results in an increase of $10.4m in revenue above the current funding levels. Overall, the enhancement of services has been quantified by community feedback through development of a Comprehensive Streets Program, exploration of housing initiatives, and evaluation of parks improvements such as the Healthier Together initiative for a new pool, and the Envision the Golf Course discussion. The following table illustrates approximations for various functions of general government. The three columns of the table illustrate current investment levels, the level of investment to sustain services, and the level of investment needed to enhance services. These figures are expressed in totals with the delta provided at the bottom of the table. Total $ 12,801,230 $ 17,764,722 $ 23,218,264 Increase in Revenue $ - $ 4,963,492 $ 10,417,034 Financial Sustainability Task Force Draft Report to City Council Page 13 of .32 Bucket Do Nothing No net Loss Funding Description Current Inv. Inc. Inv. Inc. Inv. Level of Service Impacts Lower Sustain Increase General Fund Police $ 4,213,400 $ 4,213,400 $ 4,463,400 Finance/ Inf. Technology $ 1,047,215 $ 1,047,215 $ 1,207,215 Legal/Clerk/Records $ 989,543 $ 989,543 $ 1,150,000 City Manager/City Council/Communications $ 393,000 $ 393,000 $ 658,000 Human Resources $ 475,072 $ 475,072 $ 510,072 Planning and Community Development $ 1,550,000 $ 1,550,000 $ 1,680,000 Fleet Replacement (Police, Parks, Eng., Admin, Fac.) $ - $ 264,000 $ 394,600 Facilities Repair and Replacement $ - $ 395,492 $ 612,9771110 Labor Inflation/Shortage/Vacancy $ 605,000 $ 725,000 Pool $ 400,000 $ 2,200,000 $ 2,950,000 Parks $ 600,000 $ 890,000 $ 1,365,000 Streets $ 1,200,000 $ 1,950,000 $ 2,700,000 Library $ - $ 300,000 $ 450,000 Debt Service $ 1,700,000 $ 1,700,000 $ 1,700,000 Housing direct investment $ 62,00011 $ 442,000 liq $ 442,000 Attainable Housing Incentive Program - Rev. Source Impact fees and/or fee in lieu $ 40,000 $ 100,000 $ 1,780,000 Parking Management and Event Management $ 101,000 $ 150,000 $ 300,000 GIS programs (general fund services) $ 30,000 $ 100,000 $ 130,000 Total $ 12,801,230 $ 17,764,722 $ 23,218,264 Increase in Revenue $ - $ 4,963,492 $ 10,417,034 Financial Sustainability Task Force Draft Report to City Council Page 13 of .32 QI 'fiii iu i and Illlllfalllance The three basic options above can also be considered as balanced trade-offs between three concepts: growth, funding strategies, and level of service. For the second (sustain current services) and third (enhance services) pathways, if new funding strategies are not pursued, the options are for a community to focus on growth and/or reduce costs or find efficiencies: u II..i a li II°u Il a IP, e g li ~ II"u c rease r ia),,i, ' if n e w .i lu II i t are not pursued, aJItern tives are for community to focus on F 1 end/Or 111 I®/ h I, 1' J t,® 17 l Y I C I �� I ,J '7 ✓/���I hIPUAUIIHAQN%11Wk11J111yAI�II�AI�IHAQl�11Wk1�111yAI�II�AI�IHAQl�11Wk1�111yAI�II�AI�IHAQl�11Wk1�111>)1�I�IluJ f r f c, l I I While the Task Force and this report does not take a direct stance on the current state and federal tax policy or on growth, for better or worse, it is a growth -based tax system and growth is likely to happen whether we direct it, plan it, or not. Thus, it often requires non -tax (growth) policies to achieve desired outcomes. ffficiiCinciivi Finding efficiencies is a critical element for any pathway forward. Not only does the landscape of service provision continually change — demanding an ability to anticipate change and adapt accordingly — but delivering value to our community simply requires a mindset of continual quality and process improvement. To those ends, a few examples of City efficiencies in the past few years: • Contracting for pool services • Enhanced volunteer programs for parks and other areas in the city • Online permitting • Public Experience Liaisons and new City Hall front counter • On-call permitting services • Change to mowing • Lean thinking • Electronic City Council and Advisory Board materials • Updated financial software and electronic payment options Financial Sustainability Task Force Draft Report to City Council Page 14 of .32 The need for efficiencies is eternal; the above list only denotes an ongoing challenge, commitment, and efforts to gain efficiencies and make best use of existing and future resources. Criteria The Task Force used six general criteria to evaluate a set of tax and non -tax revenue options. Those criteria included: • Magnitude. How much net revenue could this option generate? • Growth: How is this revenue source expected to grow or decline in the future? • Stability: How stable is this revenue source? • Equity: How much does the revenue option align the burden of who pays with who benefits? • Political feasibility: How politically feasible is the option? • Restrictions/Alignment with needs: What can the revenue be used for? Can it meet the City's needs? As an exercise to help bolster the conversation and discussion, the Task Force used the criteria to evaluate and score options. The tax and non -tax revenue options can be found in the Appendix (Section VI). Financial Sustainability Task Force Draft Report to City Council Page 15 of .32 i� 1. �v �':lre�';`.re���.�5 ,.�"�;'ll1011r"'SIS e';IIrnIIrneInda"t;'ll1011r"'SIS After review of copious materials, robust discussions, and applying criteria to various choices, the Task Force has concluded that doing nothing is not an option. Thus, the following are two packages of inter- related and interdependent tax and non -tax options to A) sustain current services and B) enhance services. As of the current draft of this report, a suitable combination of strategies has not yet been identified that is fully able to meet the funding requirements of the enhance services package. Al: Core Services Long-term general government (core services) are reliant on economic development strategies to increase revenues in excess of inflation for financial sustainability. These include support of diverse commercial growth as well as a possible future annexation of Glen Cove. Proposed strategies also include the implementation of a parking management program, increasing the utility tax an additional 2% above the current 2023 rate, and utilizing the banked capacity revenue. Even with these proposed strategies, the City will not be able to sustain current services beyond 2030. Revenue Option Annual Amount Note Glen Cove Annexation $680k Est. to begin in 2030 Diverse Commercial Growth $50k - $610k Est. to begin in 2025; grows considerably with commercial development Planning -Fees for Services $100k Est. to begin in 2025 Parking Management Program $150k net Est. to begin in 2025 Utility Tax-Councilmanic $152k Raise to 24% effective rate (includes continuing 2% for Parks) Infill Development Strategy $95k Est. to begin in 2025 Multi -family development— Sales Tax add # of units $76k Est. to begin in 2025 Multi -family development- Property Tax add # of units $7k Est. to begin in 2025 Banked Capacity $900k Est. to begin in 2024; unrestricted use Total Revenue Options $2.21m - $2.77m Change to chronological order and phase in options Separate by tax / non -tax and maybe councilmanic vs voted Qualify with market conditions Add footnote for further explanation; A2: Comprehensive Streets A comprehensive streets program requires identifying a new revenue source in order to begin the process of rebuilding our street infrastructure. Proposed strategies include implementing a Transportation Benefit Financial Sustainability Task Force Draft Report to City Council Page 16 of .32 District funded through sales tax. Additional strategies include Fees for Services, Fee in lieu or Impact Fees and Real Estate Excise Tax (REET) for federal or state grants. With this funding package, the City would be able to meet the financial objective to sustain current services. Revenue Option Annual Amount Note Transportation Benefit District (TBD) Sales Tax 0.1% $225k Councilmanic Est. to begin January 1, 2024 Transportation Benefit District (TBD) Sales Tax 0.2% $550k Voted Est. to begin April 1, 2024 Real Estate Excise Tax (REET) $100k Est. to begin in 2025; For federal or state grant match Fees for Service (Permit fees) $85k Est. to begin in 2024 Fee in lieu of or Impact Fees $100k Estto begin in 2024 Total Revenue Options $1.06m REET is not a new tax, just allocated A3: Parks Long-term operations of the Parks and Trails system rely on general government revenues. Additional proposed revenues include the future Glen Cove annexation, reinstatement of the dedicated 2% Utility Tax for Parks, creating Impact Fees and establishing a Parks Foundation that would encourage legacy donations as well as public / private partnerships. With these additional funding options, the City's Parks and Trails will remain reliant on general government revenues and are not able to sustain current services independently. Revenue Option Annual Amount Note Glen Cove Annexation - because of MPD benefit $13k Est. to begin in 2030 Utility Tax-Councilmanic $152k Reinstate 2% Utility Tax set to expire December 31, 2023 Parks Foundation $100k Est. to begin in 2024 (currently being processed) Impact Fees $100k Est. to begin in 2024 Total Revenue Options $365k Note: Impact Fees & In lieu fees are implemented by category Address golf course, sustained means same as today A4: Pool The Mountain View pool is beyond its useful life and will require the full support of the community and region to establish a new funding source to replace the existing pool. The proposed strategy is to establish a Metropolitan Parks District (MPD) through an additional property tax levy. Other proposed revenues include establishing Fees for Services. With this funding option, the City and partners would be able to build and sustain a pool similar to the existing pool ($25million, 1 tank, smaller pool). Financial Sustainability Task Force Draft Report to City Council Page 17 of .32 Revenue Option Annual Amount Note In Lieu fees ($5,000 per unit for $2.6m Voted Est. to begin in 2025 Fees for Services $450k Est. to begin in 2025 Total Revenue Options $3.05m Est. to begin in 2026 Add explanation of pool No real option to keep as is The option for existing is to say there is no pool because there is no sustainable option AS: Affordable Housing Developing a program for Affordable Housing requires establishing new revenue sources and policies that that will be dedicated to the creation of both affordable and attainable housing. Proposed strategies include the creation of In Lieu Fees (at $5,000/unit) for housing units greater than above market rate, obtaining affordable housing grants and the sale of City property to provide a direct investment in housing. The sale of City property is a limited resource as it is dependent on available land inventory. These proposed resources do not adequately provide for the level of housing required to sustain the City's workforce housing needs. Revenue Option Annual Amount Note In Lieu fees ($5,000 per unit for $150k Est. to begin in 2025 above market units) $260k Affordable Housing Grants $500k Est. to begin in 2026 Sale of property —to support $500k Est. to begin in 2025 direct investment in housing Limited City resource, dependent upon available land inventory (list total amount, ie. $2m total with $250k annually) Total Revenue Options $1.15m Add notes that affordable housing grants and sale of property is every other year Evans Vista was $1.5m. Spread over 3 years is $500k per year A6: Library Operations Long-term library operations are reliant on general property tax revenues as the primary revenue source to sustain services. Strategies are limited to increase revenues that keep pace with inflation for financial sustainability. Revenue Option Annual Amount Note Levy Lid Lift (.10 per 1,000) City Only $260k Voted Est. to begin in 2027 Total Revenue Options $260k Add Glen Cove to Library levy Financial Sustainability Task Force Draft Report to City Council Page 18 of .32 Add footnote explaining levy timeline and crossover of revenue and expenses Financial Sustainability Task Force Draft Report to City Council Page 19 of .32 I:) aIIkag B: Eirflhairice Services 1131: Core Services Long-term general government (core services) are reliant on economic development strategies in both packages to increase revenues in excess of inflation for financial sustainability. These include support of diverse commercial growth as well as a possible future annexation of Glen Cove. Proposed strategies also include the implementation of a parking management program, increasing the utility tax an additional 2% above the current 2023 rate, and utilizing the banked capacity revenue. Even with these proposed strategies, the City will not be able to sustain current services beyond 2030. Revenue Option Annual Amount Note Glen Cove Annexation $680k Est. to begin in 2030 Diverse Commercial Growth $50k - $610k Est. to begin in 2025; grows considerably with commercial development Planning -Fees for Services $100k Est. to begin in 2025 Parking Management Program $150k net Est. to begin in 2025 Utility Tax-Councilmanic $152k Raise to 24% effective rate (includes continuing 2% for Parks) Infill Development Strategy $95k Est. to begin in 2025 Multi -family development— Sales Tax $76k Est. to begin in 2025 Multi -family development- Property Tax $7k Est. to begin in 2025 Banked Capacity $900k Est. to begin in 2024; unrestricted use Total Revenue Options $2.21m - $2.77m Add Note: for enhanced services, expenses go up and there is no additional revenue to cover Enhanced services includes time for working with legislative agenda 1132: Comprehensive Streets A comprehensive streets program requires identifying a new revenue source in order to begin the process of rebuilding our street infrastructure. Proposed strategies include implementing a Transportation Benefit District funded through sales tax. Additional strategies include Fees for Services, Fee in lieu or Impact Fees, Real Estate Excise Tax (REET) for federal or state grants, and Lodging Tax. Even with this funding package, the City would not yet be able to fully meet the financial objective to enhance current services. Revenue Option Annual Amount Note Transportation Benefit District (TBD) Sales Tax 0.1% $225k Councilmanic Est. to begin January 1, 2024 Transportation Benefit District (TBD) Sales Tax 0.2% $550k Voted Est. to begin April 1, 2024 Real Estate Excise Tax (REET) $100k Est. to begin in 2025; For grant match Fees for Service (Permit fees) $85k Est. to begin in 2024 Financial Sustainability Task Force Draft Report to City Council Page 20 of .32 Fee in lieu of or Impact Fees $100k Est. to begin in 2024 Lodging Tax $20k For Place Making/Tourism Est. to begin in 2024 Total Revenue Options $1.08m Reinstate 2% Utility Tax set to expire December 31, 2023 B3: Parks Long-term operations of the Parks and Trails system rely on general government revenues. Additional proposed revenues include the future Glen Cove annexation, reinstatement of the dedicated 2% utility tax for parks, creating impact fees, using Real Estate Excise Tax (REET) and establishing a Parks Foundation that would encourage legacy donations as well as public / private partnerships. With these additional funding options, the City's Parks and Trails will remain reliant on general government revenues and are not able to sustain current services independently. Revenue Option Annual Amount Note move to Library $13k Est. to begin in 2030 Utility Tax-Councilmanic $152k Reinstate 2% Utility Tax set to expire December 31, 2023 Parks Foundation $100k Est. to begin in 2024 Impact Fees $100k Est. to begin in 2024 Real Estate Excise Tax (REET) $100k Est. to begin in 2025; For grant match Total Revenue Options $465k Continues with current funding level; cannot sub plant Going to need an additional funding source in the future B4: Pool The Mountain View pool is beyond its useful life and will require the full support of the community and region to establish a new funding source to replace the existing pool. The proposed strategy is to establish a Metropolitan Parks District (MPD) through an additional property tax levy. Other proposed revenues include establishing Fees for Services. With this funding option, the City and partners would be able to build and sustain a pool with to the existing pool (e.g., regulation length lanes). Describe what new pool would look like ie, 2 pools, etc. But not a cardio room Revenue Option Annual Amount Note Metropolitan Parks District (MPD) (.75 per 1,000) Regional District $3.9m Voted Est. to begin in 2025 Fees for Services $450k Est. to begin in 2025 Total Revenue Options $4.35m Reviewing packages to cut in half to .30 to .40 rather than .75 B5: Affordable Housing Financial Sustainability Task Force Draft Report to City Council Page 21 of .32 Developing a program for Affordable Housing requires establishing new revenue sources and policies that that will be dedicated to the creation of both affordable and attainable housing. Proposed strategies include the creation of significant In Lieu Fees (greater than the sustain package at $50,000/unit) for housing units greater than above market rate, obtaining affordable housing grants and the sale of City property to provide a direct investment in housing. The sale of City property is a limited resource as it is dependent on available land inventory. These proposed resources do not adequately provide for the level of housing required to sustain the City's workforce housing needs. Last sentence is good wording; helpful to add this type of language to other categories Revenue Option Annual Amount Note In Lieu fees ($50,000 per unit for above market units) $1.5m Est. to begin in 2025 Affordable Housing Grants $500k Est. to begin in 2026 Sale of property —to support direct investment in housing $500k Est. to begin in 2025 Limited City resource, dependent upon available land inventory Total Revenue Options $2.5m 136: Library Operations Long term Library Operations are reliant on general property tax revenues as the primary revenue source to sustain services or to provide increased level of services or programs. Strategies are limited to increase revenues that keep pace with inflation for financial sustainability. Revenue Option Annual Amount Note Levy Lid Lift (.10 per 1,000) City Only $260k Voted Est. to begin in 2027 Additional Levy Lid Lift (.10 per 1,000) City Only $260k Voted Est. to begin in 2025 Total Revenue Options $520k Financial Sustainability Task Force Draft Report to City Council Page 22 of .32 V iir.m ;l usiii iir.m Next Steps This section is forthcoming. We anticipate it to include: • Areas still under development. Where are there still areas where we do not meet desired funding levels and why? • Timeline and milestones. When are key decisions over multiple months and years? How does this report work itself into the 2024 workplan and beyond? Is there a corresponding implementation matrix that firms up based on further Task Force conversations/direction and City Council feedback? • Call to action/engagement. How can community members get involved? What visual elements from existing engagement like the videos can be repeated/underscored here? • Concluding message. Recap of why this initiative is important and reiterate a positive, sustainable, collaborative future for all in our community. Financial Sustainability Task Force Draft Report to City Council Page 23 of 32 VL Appendix S6lect I Fisk I��orce I,,� ackground iMaterl6lis A selection of slides from the Task Force meetings is below. For a full set of agendas, minutes, presentation materials, and video recordings, visit: https:/Lcityofpt.us/epgp eptipageLfinancial-sustainab'ility-initiative. M1 am on 61MM 11111MAM The IL Udget is, an economic plan that focusesthe entity's fiinan6all and huirain -esoui ces on the accorilphshirient of specific goals and (.)bjectves establshed by the policy rial eirs, HIM The bUdget Pstabhshes the anim,ial revenue and expenditure levek, cafled appropriations, for delpal-tirlients and funds. HIM A city budget rmist be baainced: revenues k expenditures HIM Poul Townsend CUii operates on an aininuall budget and all) appi,oi-)i-iatioins are for that calendar year alone. What is the purpose of a budget? 11111 Legallecl�.;ireinient 1111 AocoiuntaWfty an(J trainsl;)areincy How the City speil taxpayer arld ratelpayer money Shairing accomphshirnients III Performance evaluation III Performance measures Manageimenttooll Fllai,-lniiiig dacui,yient WHAT SERVICES DOES THE BUDGET PROVIDE FOR? SERVICES PRO)RDIED By"rHE C]"IrY • IDevellopiment Services. Plan ning, permitting, inspections • General Government: City management, Ilegall services, finance, Duman resources, IT • Library: Librairy services • Iparks, Recreation & Community Services. Park maintenance, irecreationall activities • Police. Plubllic safety services • Public Works. Maintenance of physical infrastructure and transportation systems • Solid Waste: Garbage a in cl recy cll i in services • Water/Sewer: IDriniking wateir, sewer treatment services SEIRMICIES PIROVIIIINEID IliY AEFFIERSI lr,,`,0UNr1I`Y Assessor. Assessment of real property Economic Development. Business attraction and retention Emergency Management: Disaster planning, mitigation, and recovery Environmental Public Health: Water quality maintenance, preservation of open space, per -miffing of waste systems Municipal Court. Processing of cases and colkiction of fines Public Hlealth- COMMIUMICIBble disease management, family health services S1IEIRV1(','.1IES IPROVEIDE1131 1113YOTHIERENTINUIES Electricity (via Jefferson County PUID) Fire prevention and) emergency response (via East Jefferson Fire and Rescue) K-112 education (via Port Tavinsend School District) Port maintenance (via Port of Port Townsend) Public transit (via Jefferson Transit Authority) 911 services (via Jeff(-- m) Financial Sustainability Task Force Draft Report to City Council Page 24 of 32 0611MIN Poke Pull-flic Works Porks, Recrenfion, z.:md Con,irnunity Sarvice, MENEEMEMEMENE= PVannng and Comn,mrfly ,)evelr,aprnent INNEEMEM, L! I:-) I (!", y MEMO =. Aa fnrdstroflon, Nnance, and IHR INIMMINIMMEMBEHIM State'& WA 6.401% 70% $6.40 City of IPort Townsend 0.98% 11 %, $0.98 Jefferson Tray nsitAuthority 0.901% 110% $0.90 Jefferson County 0.73% 8% $0.73 JeffCom 1x.11 % 1 % $0.11 Total Tax Rate 9.10% 100%, $9.110, Financial Sustainability Task Force Draft Report to City Council Page 25 of 32 State Levies (Schodl) $2.734 28% I �$820 Local Schlools $2.026 21% $608 City of Port'Tbwnsend $1.567'8 16% $3,00 County Current Expense* $1.2178 13% $128 it IC istrict $0.999, 10% $12 Port of Townsend $0.521 Emergency MedicA Services $0.425 4% $156 Pubhc Ultilllity DistHct $0.0815 1% $24 Hospital lDistrict $0.0399, 0.4% $365, Totals $9.6120 100%** $2,884 'inClUdes Mental Health, Veteran's Relief, Developmental) Disabilities 11* Totals imay not SLIM to 100% due to rOUnicling LEV E IL 0 F S IE IRVI C ' IRVI EW MIN Leve�loff sei,v4ceisafLIlICtiCNllofI;)B,iiriiai�-yfaCtoi-s: The airnc)unt of serVc-,es pn.,)vided (whk-'h is in turri, a fi_aIrjji- 'tiol[I of the cost of service and the bred, getfoir services) The m nber i pecVle recei -es Ir V�1,11C g seIrVIli MIN Pa r ks e x@ rn 1.) 1 e: 1,000 acres of parklaind 100,1100 residents 10 acres per 1,,000 ri e nts, 1,000 aicires of parkland 1125,000 residents 8 acres per 1,000 residents Key takeaway� reciiviirq serv4:,es wWhm(,mIt fllwi ,imcm,,�rj)t of sir,,,,�ir%Acies decreases fl,)wi �evi�,,,,',d1 of seirv4.e for Che Financial Sustainability Task Force Draft Report to City Council Page 26 of 32 I ON IMIN 11 WAN **OMNI 0110"I'MIMMOM SEIRVOCIES PROVIIDIED BYTHE O"IN SEIRMES IPIEOIIINE113 BY AEFFIERS0111Y lr.`,0UN1`Y • Development Services. Planning, Assessor. Assessment of real Props rty permitting, inspections Economic Development. Business attraction and retention • General Government. City Emergency Management: Disaster planning, mitigation, and recovery management, Ilegall services, finance, Environmental Public Health: Water quality maintenance, lDreservation of open human, resources, IT space, IDer-mitting of waste systems • ILilbrary.- Library services Municipall Court.- Processing of cases and collection of fines, • IParks, Recreation & Community Public Hlealth. Communicable disease management, family health services Services. Park maintenance, irecreationall activities SEIVICIES 11R.OVIDED, 113YOIT11HER ENTITIES • police: Plubllic safety services • Public Works. Mainteirance of physical Electricity (via Jefferson County PUD) infrastructure and transportation systems Fire prevention andl emergency response (via East Jefferson Fire and Rescue) • Solid Waste: Garbage and recycling K-112 education (via Port Townsend School District) services Part maintenance (via Port of Port Townsend) • Water/Sewer: IDriniking wateir, sewer Public transit (via Jefferson Transit Authority) treatment services 911 services Rvia Jeff{, mb IN MINIMUM INSION 11MMINUM19M M Pokce Pul"flic Works Parks, Recrenfiori, ond Corriniunity 1`1onning and Conirntirfliy Develkq)nnew I.1 1:- I cw Y Alclyninkstrotion, Firiorxe, and lHr� Financial Sustainability Task Force Draft Report to City Council Page 27 of 32 S6ect Fix a n INon I ax IlReveinue Qptioin.�), General Purpose Tax Revenue Options Property tax. mcrea se - lemporary, — --t .r lim,ited purpose Water, S.— & Stormwatajr UVIry tax Electric and Tekphone B&O Tax General Purpose Non -Tax Revenue Options General Purpo chwoe Wow (ap's for 01Y Spore 01 Mtn. V[ew/rfty H .111 current wbsidy supports COITIMAY Susfmn.bl. S.mc­ and C- ­4y Sustainable Semces and Commuoy Sustainable Serykes and C—ra-fty Financial Sustainability Task Force Draft Report to City Council Page 28 of 32 General Purpose Non -Tax Revenue Options (continued) Transportation, Roads, Trails, Tax Revenue Options Tlonsportatlon Beneflt Uistr Ict Could fund no -net loss at sales nix enhancmenents N1, snvinys r ,yemeral vwWd grow with Increased economic do-11crpmerii Sales tax anaulcablla for l0 years with Impacts all indefinite numnber of purchases renewals Moy require voter apps ovall For transporlisi praiects di11::'0 ca.''"' rNnn'MW ooll Sales tax crvollloblle Transportation L s of I—.1 onit-11 and Ice fun Could be Can be benefit District Could fund no -net lass at 0.1 f - $275,000 Increased economic far f 0 years with Impacts all implemented without For transportation nhanceriems em Op—tnomal and f l d Cao nract ff bur Y sales tax dereNapment troy m: Parks, Pools, Public Facilities Tax Revenue Options Parks, Pools, I metropolitan lPork Disr or Property I.. Rooks and Recreates DstrlV Poo kr; and R.c—trons Service Aien Public FodlWps Dwrio —1— to. Housing Tax Revenue Options For park projects For parks services, fimle6 term For parks services, fimte6 term For a reglionall facility For copirall proleCTS Spedfic to the fee Qh. w,ortg, streets, parks} Specific for Q&M Of facility Financial Sustainability Task Force Draft Report to City Council Page 30 of 32 Implemented at County Pr—ides Aff-d.bY. Affordoble I ILA -Lrhthe Grow% with increased Impacts all Already Hotoslnv and $500k Ongoing Housing Sales Tax County through the oconcruc demellopmant purchases Implemented Homeless Housing 1—lo—ng Fund B ... d P, ogr . rn, Implemented by the Provides AffordabLe Affordable City; ILA wNh the County $25k Grows with increased Ongoing Impacts all Ali eacly ttauslng and Housing So.Ws Tax ffitough rhe Hou ng ecorlorm�: development purchases Implemented HomMess Housing Fund Baird P,.g,.m, ProWe higher(level of responsuveness for D—ell.lpmemt I-r.ii processing by W.�Idl gir— finip—ts p.cif[c Can be Supports " iti-1 1 fur duty staff posirops, TBD Orogoing 1"Plemerted m1how oilouri�able housing F— must be attriffioedvoter users app -61 reeds clro011y to a ptcvidom service Financial Sustainability Task Force Draft Report to City Council Page 30 of 32 Housing Tax Non -Revenue Options REdaco re m.n¢mf Cstlmrrorred market value = Best return on raolwlty Is $45D m for rhn C:oalld be for affard¢ahllr Caundl dedslpn. 5-6 fund or use Ilnfitll Devslompem $2,000,000h�asecl on new revenue assprilatsdl Strategy Enampl€s your on averdgo caalnrg Neighbor head Sade of Land ownership potentially far sstim¢rded 20 lots 'rill net No growth potential Gine time housing. for af'f.r'd.bll. cpnaenrs to be housing ai annatlN reWenW (here fis a deneilty tax zprAing P-10, IP Equltaalr strategy haus,ing taclNcall infill value of $100,000 for 100 rniles of water, (Exemption P'r'ogram over the last 20' years, considered, E. r a ilam of sewer for (Current unit count per sewer, and streets. veer Is 509 housing = >1 ➢7G Maks., housing rnvatlable ¶()O dL'.f4S aa51'ng for mare pspple, 'IFet rL'melvad g@ntY &Iital'an eligilam lbe ts our of h,usung and ndustry. R arentYa L1GA 5'W ala. pndVgtl'il. aN, Ppieni9411 {pi' '.., 1 448 umilts needled High growth polentllcrl with Ulillify lox, B&G, Saesy and wltEl 'inal'ea5e business Regvue' County find Chy CaUnGY GI@n Grve UCsA - Male off Dent w ban 3D#1 it—,adr9n`anaN n­NN-6bUiIn 6ppalTWnlry. Castt to Y'IAn ng "pp—,ol^ Require, Supports h-noLureEx.parin.. services based on IAaWS ng end light Ind WStl `/. fY rPwih with Lurepcapeo subarea plan 1. dnixe ESS CPWYd In¢I@WS@ UGA ofrange and jobs -Is ing do-lop—nit EAnicted annaol $ I m in drnSlty for mast efficlYrnt with urban serwiaez. aplo—cil by petrernsand patenirmil ruvenu.grawNA aver 20 services. Also roppo-rrun'nq far Garrim.ree, Period mare fortify wag:@ jabs. for Infill.year Ongoing annual revenue CGriIirlYled development V{ Provides needed aLC985 r Cty Htiatrd reulhirg from workforce nfntoagrowth ln Supports crOlocil focusingtlEans Proeidesficislr� loatg= $➢5,0,06fyr for potential. Al. hele ' a112n¢hNE heaving 19 to ¢tlaYngfe housing, Req,4., CpUnr aticn—bl. h—fin g required for a susiai ruble (Weed mix of housing. appal V�sTaN 7 SO amts., Other on one time tax rswsnue cprnmumty TBD I needs tangible community valine Hilgh 111-1 of satoinciblllity if housing it,.. AM rompaxsd to sprawll. Cngalnyl wM, Infill As. egWYto Elle. Could yes, dependmq an clen5i'.Iy and oca n@w hPWsinq urAlis.. Will Include program to very wlth moadlltlon, mai ket cachieve attaunablle trop eociiry to Uuil¢1^ end funding, (Need Ra housing ri—d5, address hulddmg cycle prohlam. Cydhc based o ...anamy. Howomar, on av®.rage vary G—th an of , sustainable hayed on WA d.twndNng communlry Snare rax strurtura. apitnii. far -easing Garr merll al acnwary is'iter L,us�n... act wry cVnd dlr loves Illy .avenue. workforce housing TN, s. Ilndltdes r—fesslanal a ii.bllll1ty. servllo” Iradcs, small Isaslness, man�uf-worg, et[. Imprpves Revel of ssrvlre for IrousNng and m{rasHfigh rewenus pafenl'fal for Highgrawlh patlentfiall Support Market market rate apartments of 1NF dewellopment can Create,. hong term rim e-inwhile dale to Mu'I1Ntarritly Housing maxilmum. densly ¢J11e to ulNliiy text series tax, be establlisher9 as the sastainabNllity tar citNes. pppartunity. and property tax revenue, roam for unit creation, '',. Reduce oa' Lowers tax burden on Best return on raolwlty Is $45D m for rhn residents InfrosrrWore, Est $330„060 per yea. far Ilnfitll Devslompem We need 75 unilisper new revenue assprilatsdl Strategy Enampl€s your on averdgo caalnrg w rh Innsrrucrran sales rax strnges of life and clam t {Prwrard *' 400 units cavnplezes. - Stroup Inclu-da filmm�cil¢III, rightnow because of and prPpErry tax. Aba„ rrarkeimg and ai annatlN reWenW (here fis a deneilty tax zprAing P-10, IP IJacklog of not enough burden IEd UCnpn of 2'6% taclNcall infill units being aanstructed for 100 rniles of water, (Exemption P'r'ogram over the last 20' years, '.,. (Current unit count per sewer, and streets. veer Is 509 housing = >1 ➢7G Hilgh 111-1 of satoinciblllity if housing it,.. AM rompaxsd to sprawll. Cngalnyl wM, Infill As. egWYto Elle. Could yes, dependmq an clen5i'.Iy and oca n@w hPWsinq urAlis.. Will Include program to very wlth moadlltlon, mai ket cachieve attaunablle trop eociiry to Uuil¢1^ end funding, (Need Ra housing ri—d5, address hulddmg cycle prohlam. Cydhc based o ...anamy. Howomar, on av®.rage vary G—th an of , sustainable hayed on WA d.twndNng communlry Snare rax strurtura. apitnii. far -easing Garr merll al acnwary is'iter L,us�n... act wry cVnd dlr loves Illy .avenue. workforce housing TN, s. Ilndltdes r—fesslanal a ii.bllll1ty. servllo” Iradcs, small Isaslness, man�uf-worg, et[. Imprpves Revel of ssrvlre for IrousNng and m{rasHfigh rewenus pafenl'fal for Highgrawlh patlentfiall Support Market market rate apartments of 1NF dewellopment can Create,. hong term rim e-inwhile dale to Mu'I1Ntarritly Housing maxilmum. densly ¢J11e to ulNliiy text series tax, be establlisher9 as the sastainabNllity tar citNes. pppartunity. and property tax revenue, roam for unit creation, '',. Reduce oa' '1'o1a1 grass cammardcall Best return on raolwlty Is $45D m for rhn I Icllps with housing Not estimated yet. May IFosslbl. naw and '.., city or $:i.3 rn(aura of Support diverse addin—I jabs. M.kas Iamnmerdal hand space Cprmrrrrrcli aN Wse of Iommer.lrnYly 0325 cued. Bumnsss Growth xanedl property. Vilullty Far Ex plc Roam to strnges of life and clam t In comnoarraal d sr Ids lnlreasee I—In. ddll cavnplezes. - Stroup su Frports better sei wce, actisny on hand by 20% '., development of new wknlch gain—ras $6401, Equitable use of the ai annatlN reWenW Hilgh 111-1 of satoinciblllity if housing it,.. AM rompaxsd to sprawll. Cngalnyl wM, Infill As. egWYto Elle. Could yes, dependmq an clen5i'.Iy and oca n@w hPWsinq urAlis.. Will Include program to very wlth moadlltlon, mai ket cachieve attaunablle trop eociiry to Uuil¢1^ end funding, (Need Ra housing ri—d5, address hulddmg cycle prohlam. Cydhc based o ...anamy. Howomar, on av®.rage vary G—th an of , sustainable hayed on WA d.twndNng communlry Snare rax strurtura. apitnii. far -easing Garr merll al acnwary is'iter L,us�n... act wry cVnd dlr loves Illy .avenue. workforce housing TN, s. Ilndltdes r—fesslanal a ii.bllll1ty. servllo” Iradcs, small Isaslness, man�uf-worg, et[. Imprpves Revel of ssrvlre for IrousNng and m{rasHfigh rewenus pafenl'fal for Highgrawlh patlentfiall Support Market market rate apartments of 1NF dewellopment can Create,. hong term rim e-inwhile dale to Mu'I1Ntarritly Housing maxilmum. densly ¢J11e to ulNliiy text series tax, be establlisher9 as the sastainabNllity tar citNes. pppartunity. and property tax revenue, roam for unit creation, '',. Reduce oa' ZaninSy Is the key Best return on equity in h-en;g. I Icllps with housing Not estimated yet. May Inve�ztmeut is .11uoff-liter. perking Deponds pn hoisting li rlrnsrty, test of........ be a net trio rf hauling d'.enaity devleopmenr NIA ..guru .monis sir monit. err malntorinon¢r denzrty is arhiov@d. strnges of life and clam t '.... Goal to max mfze cavnplezes. - Stroup dlScy'Inellltalvm. '., development of new Tpwns, ' Equitable use of the Inacreo% atrainob Illy of revetrue neutral ,knit orralnable un➢s, We 150% AMI Muhl haarsma tram 1 20% to nand— property tax need d0^'( of till rvew Growth potentdallf'or Fan ly Tax ""I' to be attainable NIA (Exemption P'r'ogram 150% AhAI ryuctl lfls¢1 cp.,ts to rest of property ar vffardabue. '.,. ht aarsslaalr}s.to. bass '..,. Based on Dept, of growth patenrrall for 20 yr. housing = >1 ➢7G Maks., housing rnvatlable pr.f.ttan Con -I ncrad for Ptl."ning pro..... I requ, Planning sngag Coommissdan anal City needs, alllmanteale, and Ins, CWUPS ii r¢IStraciWLE sasten ncil"llilty Rsqunr^es ded cared Balancing good pay rrg jlobs with invesrmerrt n Depend, on }ora types economic cam mrWnAty needs Is de.. oils ent and the key stratey,y far housing camraerrilal grawtXr. elaIs rt.mm Iiry� Huge improvement in ZaninSy Is the key Best return on equity in h-en;g. diver for ,.king Inve�ztmeut is Apartments serve all I¢ id rnvadlabls for ap.rIment people at duff—el strnges of life and clam t ap arnnEnis. cavnplezes. - Stroup dlScy'Inellltalvm. C..—all decm— Tpwns, ' Equitable use of the Growth potentdallf'or right of Wray for hauling Co—all deQlslan hous:ring densrrty purposes, '.,. growth patenrrall for Marking and housing = >1 ➢7G Maks., housing rnvatlable for mare pspple, sm,cl.gy eligilam lbe ts our of developmenl. '.., 1 448 umilts needled '..,. by 2044 Financial Sustainability Task Force Draft Report to City Council Page .31 of .32 6 e ct III°leo u Irc'eold III°z6 eva n c'e White Paper: Exploration of Strategies for Supporting Infill and Affordable Housing Related to Infrastructure Development City staff produced a white paper that is related in particular to the housing component and briefly referenced in the report above. The draft white paper, dated May 3, 2023, and presented to the City Council Infrastructure and Development Committee, can be found here: https:J�cityofpt,�ranicus,com/MetaViewer,php2view id=4geclip id=2663&meta id=215676 Housing Initiatives A general overview of City housing initiatives can be found here: h ttps:!lcityofpt. u slengageptlpagelhou si ng. Streets Initiatives: Comprehensive Streets Program A general overview of City streets initiatives, including the Comprehensive Streets Program, can be found here: https://cityofpt.usZengageptZpageZcomprehensive-streets-program. Parks Initiatives: Healthier Together (Pool) and Envision the Golf Course/Mountain View An overview of the Healthier Together (Pool) initiative can be found here: ttps:!lcityofpt. uslengageptlpagelhealthier-together. An overview of the Envision Port Townsend Golf Course and Mountain View Commons can be found here: https:llcityofpt,uslen�a�eptlpa�elenvision-port-townsend-golf-course-and-mountain-view-commons Video Series A new video series providing a brief overview of core services and the three priority areas of housing, streets, and parks can be found: • On the City Facebook Page: https:l/www.facebook.comlCityofPT • On the City YouTube Channel: https:l/www,youtube,comlCityofPortTownsendlvideos • On the City website: https://cityofpt.us/engageptlpage/videos Financial Sustainability Task Force Draft Report to City Council Page 32 of 32