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HomeMy WebLinkAbout10(360) 379-5047 (email: citycouncil@cityofpt.us) www.cityofpt.us October 2011 City of Port Townsend FIRE SERVICE LEVY - SUMMARY OF KEY POINTS by David King, City Councilor In last month’s newsletter I provided detail on the fire service special levy vote coming up in November and information about a possible future annexation into East Jefferson Fire Rescue. Since that article came out I have received requests for additional detail about the city financial support of emergency services, and requests for a simplified version of the original article. In response to the former I’ve prepared a Q & A document that goes into detail about both the levy and possible annexation. For those interested that document is available online here http://www.cityofpt.us/, from me via email at, dking@cityofpt.us, or in print from City Hall. With respect to the request for a summary of the original document about the levy: The joint governing board of East Jefferson Fire Rescue, consisting of three commissioners elected by voters in the District and three members of City Council appointed by the mayor, determined that the additional funds are necessary to maintain and enhance both fire and emergency medical service due to rising costs and needs. The cost of providing emergency medical services, in particular has been rising at approximately 6% per year. The money will provide for adequate staffing and training, replacement of aged equipment, and compliance with mandated requirements. If the levy is approved, City property owners will pay the same amount for fire service that District property owners outside the City (having approved a levy increase in 2010) are already paying for the same service. Through my independent comparison of EJFR with other fire districts using data provided by the Washington Fire Commissioners Association I learned that EJFR operates with less revenue and ex- pense per capita than other Fire Districts that provide similar services in similar service areas. The results of the special fire levy will affect the City's response to other economic pressures on our budget. Please read the following account of the City's finances by City Manager David Timmons. CITY FINANCIAL PICTURE – FIRE SERVICE LEVY AND THE 2012 BUDGET by David Timmons, City Manager Continued difficult economic circumstances at the national and state levels will require significant City budget cuts in 2012 and perhaps beyond. While the City has generally weathered the down turn which began in 2008 (compared to other Washington jurisdictions – with 2009 being the most difficult), next year we’ll have to come up with budget cuts of approximately $500,000 that are related to the general economic downturn. And if the fire levy – to bring our contributions equal to what’s already being paid by our partners and neighbors outside the city for fire and emergency medical service – doesn’t pass, additional cuts up to $625,000 will be needed. This would be a total shortfall of over $1.1 million, or roughly 20% of the City’s operating budget. David King, Councilmember and member of the Joint Fire Service Oversight Board, authored articles this month and last with detailed information on the pending fire service levy and possible future annexation of the City into the Fire District. Both articles, and this one, are on the City’s website: http://www.cityofpt.us/. What factors affect the City budget? There are three main elements in our budget considerations this year: (1) $500,000 in projected revenue shortfall; (2) $625,000 needed to provide parity between fire and emergency service payments made by city residents and what residents outside the city are paying for fire and emergency services, and (3) increased costs mandated by the State. The most significant “hit” has been in receipts from the real estate excise tax (“REET”), which dropped from a high in 2006 of $470,000 to $223,000 in 2010. We project that the REET will generate only $160,000 in 2011, down more than $300,000 from 2006. Related to this are declines in permit revenues from new con- struction as well as reduced sales taxes due to the sharp downturn in construction activity. In planning for next year’s budget, we will be adjusting employee benefit plans and co-pays, as almost all em- ployers, public and private, are doing nationwide. These adjustments will help. But not all can be handled in that way. Mandated expenses include, for example, a State requirement for increased city contributions to the state retirement system. In 2012, this alone will cost the City an estimated $150,000. What steps has the City taken to address changed circumstances and difficult economic conditions? In 2007, Port Townsend faced a significant set of changed circumstances when the State pulled ferry service from the Whidbey Island-PT run. In response to that blow, the City reset its financial plans. We implemented staff reductions, wage and benefit adjustments for employees, cost cutting, and modest reductions in budget reserves (a “rainy day” if there ever was one). We focused on obtaining grants to help develop and/or im- prove infrastructure to support economic development. The improvements on Upper Sims Way and down- town both received substantial federal and/or state assistance. City bond proceeds financed acquisition of a public access easement in connection with the Northwest Maritime Center which helped completion of that project. These efforts – particularly the investment in the Maritime Center (which contributed to record-setting festival revenues at the recent Wooden Boat Festival and another likely spike in sales tax receipts) – have helped sustain the City’s lodging and sales tax revenues. Those categories have held steady over the past four years in PT, unlike almost all other jurisdictions in the state. The City’s participation with the State Parks Department and Peninsula College in the restoration of Building 202 at Fort Worden is another example of our focus on infrastructure to boost long-term economic returns and ensure the continued viability of the park as a unique recreational amenity. The park’s future remains very much in doubt, as evidenced by recent state legislative cuts to the parks operating and capital budgets (and the specter of possible closure of Fort Worden and other state parks). The evolution of the Fort into a life-long learning center – which resulted from a state park long range planning process to put the Fort on a sustaina- ble path - will, it is hoped, breath further vitality into that important facility and save important job centers as well as spur new employment. The City’s willingness to be a financial partner in this endeavor contributed to the state legislature’s decision to fund the project in a session that was otherwise marked by cuts and budget constraints. What will the City need to do to adjust to revenue shortfalls? The continued weakness in the real estate market and the slow emergence from the recession, along with ad- ditional mandated costs, will require significant budget cuts beyond those which began in 2008. Significant adjustments – approximately half a million dollars – would be needed regardless of whether the fire levy pass- es. But this number will more than double if we need to find an additional $625,000 to eliminate the imbalance in current fire service funding. The City Council has not yet determined specifically what cuts will be made. Those decisions will be made this fall as part of the 2012 budget process. Council considerations in years past have been guided by citizen input obtained in a number of town meetings in 2008 and subsequent outreach efforts to learn what PT resi- dents wish. There has consistently been strong support for maintaining community services (e.g., parks and the library), and resistance to cuts in community services without public input and process. The Council’s de- cision to place the fire levy on this year’s ballot is based on that philosophy: to give the voters a definitive say in how the city’s budget allocations are determined. This is not dissimilar from the Council’s decision in 2008 to place a library levy on that year’s ballot. That choice – to maintain library services and restore services previously cut – was approved by the voters. A fa- vorable vote on the fire levy would enable maintenance of some – but not all – existing services. Even if it does pass, as noted above, reduced revenues and mandated costs will require some retrenchment to balance the budget. My administration, working with the Council’s Finance and Budget Committee, will recommend reductions in general fund expenditures of approximately $500,000 to meet the shortfall from the general economic downturn. The reductions, which are ultimately up to the City Council, will include cuts to non-essential ser- vices and programs, in order to preserve funding for essential services. Generally, “essential” or “core” ser- vices are those that maintain public safety (police and fire) and provide basic infrastructure (safe water, sewer, street repair, stormwater control). All services and programs will be critically evaluated to meet the shortfall. Programs and projects that have dedicated funding sources – where funding that can only be spent on specific programs – would be spared. Examples include: state or federally-funded infrastructure projects, and the library, where voters in approving the 2008 library levy created a dedicated funding source for the library. Preliminary details will be presented to Council in October. Why not equalize fire contributions from existing sources? The Council’s determination was to provide PT voters with a choice: to support a 43 cent per $1000 as- sessed value levy increase and lessen cuts to other services, or to avoid enacting the levy and absorbing budget cuts more than twice as deep? Voters should know, as well, that finding places to cut does not entail looking at the entirety of the city’s fi- nancial picture. Under state law, only a portion of overall city revenues can be used to pay for emergency services. The budget is divided into accounts – called “funds” – and most of these funds are financed by revenues that are restricted to the specific purposes for which the fund is established. For example, payments by customers of water and sewer services can only be used by the water/sewer utility and cannot be used for fire, police, parks or other municipal needs. Thus, salary or benefit adjust- ments or other budget cuts in water and sewer operations can only be used to benefit the utility. Similarly, capital funds – whether locally raised or from state or federal grants – can only be used for specified pro- jects. Also, the 2008 library measure set up a dedicated library fund, making those receipts off limits for other purposes. The City’s website has a pie chart showing how the total city budget is allocated to all the various funds. For additional context, the City’s general fund relies on several sources of revenues, including both taxes and fees, to provide city services. Taxes include property, sales, excise, business, lodging and utility taxes. In Port Townsend we will raise approximately $2.98 million from the property tax in 2010, about $1.6 million from sales taxes, and $1.55 million from utility taxes (levied on both private and public utility services). Sales and lodging taxes are particularly sensitive to overall economic conditions, of course. Because some 50% of all real estate in the City is exempt from property taxes (including Fort Worden and all property owned by the Port), the utility tax helps balance the burden by sharing tax obligations between tax exempt and taxable properties. Overall, the 2012 general fund is expected to have about $6 million after the $490,000 in cuts mentioned above. This will be a cut of roughly 9%. Finding an additional $625,000 to achieve parity with our out-of- city fire district neighbors would require an additional 10% cut in general fund expenditures. If the levy passes, the City will be in a better position to retain its core services (such as public safety), stabilize our long-term budget situation, and minimize the impacts on community services (such as parks). CONCLUSION The issues facing the City budget and the services we provide and can afford are at the same time both complicated and simple. They are simple in one respect. We face declining revenues and increasing costs. They are complicated because there are no easy answers on how to address the problem. We face – like nearly every other government – cuts in services and programs. The questions are how deep the cuts will be and which cuts will be made, and will the voters approve a tax increase for emergency services that would reduce the level of cuts. Please make your views known as the City Council considers these questions as it completes work on the 2012 budget. You may email the City Council at CityCouncil@cityofpt.us. Water System Flushing Program The City of Port Townsend Water Department will be conducting its annual water system flush- ing. It will begin Monday, October 3 and will continue through October 31. This program, designed to flush away traces of minerals, may cause a harmless and temporary change in the appearance of your water. The brownish water can be quickly eliminated by running your tap a few minutes. It is a temporary condition and the water will quickly return to normal. Parks and Recreation Questionnaire - www.countyrec.com The Exploratory Regional Parks and Recreation Committee (ERPRC), made up of City, County, schools, sports clubs, healthcare entities, non-profits and citizens, is working to identify the best way to support park and recreation services. The existing organization and funding for parks and recreation is not sustainable and this Committee is charged with finding creative and practical ways of saving what we have and improving our parks and recreation programs. Your ideas are important to us. Please take a few moments to complete an on-line survey at www.countyrec.com. We are trying to reach as many people as possible. Feel free to spread the word by telling your family, friends and co-workers about this opportunity to be involved in the planning process. Anyone age 10 and over is encouraged to participate. If you have any questions, contact Matthew Tyler, Jefferson County Parks and Rec. Manager, 385-9129. Main Street Downtown Trick or Treat On October 31, children grades K-6, accompa- nied by an adult, will gather at 3:45 p.m. at the Bank of America Plaza (corner of Water & Adams Streets); the Parade starts at 4 p.m. Water Street will be closed to traffic from 3:15 to 5:30 p.m. 8th Annual Port Townsend Main Street’s Girl’s Night Out Wild About Girls’ Night Out! Thursday, October 6 from 11 a.m. - 8 p.m. Sponsored by Jefferson Healthcare, Main Street, OZONE Socks & 27 Businesses A day and night of girlfriend fun and shopping - Uptown, Downtown and on Kearney St. Get your coupon books and goody bags at participating businesses. Proceeds go to support breast/cervicalcancer testing for local women in need. Door prizes at the wrap-up party at 8 p.m. at Alchemy Bistro and Wine Bar. Visit www.ptmainstreet.org for more details. Jefferson County Public Health would like to invite all breastfeeding and pregnant women to Breastfeeding Tea Come join this education and support group that meets every Wednesday at 1:30 p.m. at the Jefferson County Public Health Department, 615 Sheridan St. Call 385-9400 for more information. PT Education Foundation Invites You! Wed., Oct. 19, 7 p.m. - Port Townsend High School Library Please join us as we celebrate those who were awarded PTEF grants for the 2011-2012 school year. Grant recipients will be making presentations about their projects and how they will benefit students. PT Education Foundation's mission is to enrich the academic offerings for students in Port Townsend's public schools. We annually grant awards to PTSD staff who submit proposals in support of this mis- sion. The grants are competitive, and the process is open to any employee of the Port Townsend public school district. This year we were able to grant over $37,000. For info: www.pteducationfoundation.org/ Does Your Child Need Dental Care? The Washington Dental Service Foundation SmileMobile is coming to Chimacum October 31 - November 4. The SmileMobile is a fully equipped mobile dental clinic that: provides dental care to CHILDREN (birth through high school) with limited family income accepts State of Washington Services Card (Provider One) & sliding fee scale based on family income Call Karen Obermeyer at Jefferson County Public Health 385-9400 before October 31 to schedule an appointment or for more information. USED BOOK SALE Sponsored by Friends of the Library Saturday, October 8, 9 a.m. - 3 p.m. (8 a.m. for Members of the Friends) Held at the Community Center in Uptown. Walk or Bike to School on Wednesday, October 5 visit www.ptwalkorbiketoschool.org