Loading...
HomeMy WebLinkAbout071111CITY OF PORT TOWNSEND MINUTES OF THE SPECIAL MEETING OF JULY 11, 2011 CALL TO ORDER AND PLEDGE OF ALLEGIANCE The City Council of the City of Port Townsend met in special session at 6:30 p.m. on the eleventh day of July in the Council Chambers at 540 Water Street, Mayor Michelle Sandoval presiding. ROLL CALL Councilmembers present at roll call were David King, Laurie Medlicott, Kris Nelson, George Randels, Catharine Robinson, Michelle Sandoval, and Mark Welch. Staff members present were City Manager David Timmons, City Attorney John Watts, City Clerk Pam Kolacy, and Development Services Director Rlck Sepler. CHANGES TO THE AGENDA There were no changes to the agenda. OLD BUSINESS Fire Annexation - Financial Impacts City Manager David Timmons reviewed the packet materials and provided a new "Levy Impact Worksheet" showing effects of a 43 cent or 31 cent special fire levy. He discussed the impact of the unanticipated dramatic changes in property valuation in the County, which the County Assessor estimates will fall by 25% in 2011 for tax collections in 2012. This change would result in the Fire District's current $1.00/ $1,000 levy being recalculated by 2013. If annexation occured before August 1, 2012, the City would be subject to the District's levy in 2013 (estimated $1.40/$1,000). The County Assessor reported that the state will require County -wide property assessment equalization starting in 2014 although he says this may be delayed as it depends on state funding availability. Because of the complexity of Washington tax laws, several alternatives for the City to achieve equalization with the District levy have been discussed that cannot be done. The City cannot roll back the existing levy, as it would still be considered for legal purposes by the State as banked capacity. Because of these limitations and the variations in property assessments predicted over the next three years, staff recommends a special purpose lid lift of $0.43/$1,000 to be placed on the ballot for November 2011 to be effective in 2012. This would equalize the City and District fire levies in the interim before annexation. The lid lift would automatically expire upon approval of annexation and would avoid creation of any additional banked capacity. City Council Special Business Meeting of July 11, 2011 Page 1 of 5 Under the current interlocal, the City's financial obligation to the District created by the District's successful levy, begins in 2012. The current agreement, in place for 2011, provides that the District cannot walk away from the contract because there is a binding arbitration clause. The agreement is in place for 20 years. Mr. Timmons noted that the City must reprioritize numbers in the budget for 2012 which may include staff changes, benefit plans, and wage freezes. The General Fund expenditures will probably have to be reduced by about a half a million dollars in addition to meeting the obligation to the fire district. Mr. Timmons reiterated that an individual taxpayer's bill would show no change under this scenario, all things being equal. He also confirmed that the levy would stay in effect as a special purpose levy if an annexation vote fails. Mr. Timmons gave further details about the spreadsheets provided tonight and how the numbers were determined based on both $0.31/$1,000 or $0.43/$1,000 and why the 43 cent levy is the closest to providing equalization in light of the other variables. City Attorney John Watts discussed the effective dates for tax collections in relation to elections. He stated a vote must occur before August 1 in order for the tax collections to begin in the following year. Mr. Timmons stated that the Proposition 1 sales tax revenues are meeting expectations at this time. He said that analysis shows 57% of the sales tax paid into the City comes from businesses outside the City doing business within the City; in addition the streamlined sales tax is in place which makes up for some potential losses due to business closures. The levy rate derived from District values would be a rate based on reassessment, estimated to be about $1.40 per $1,000. That rate would be applied to the City in 2013 if an annexation vote occurs after August 1. There is a delay in application of taxes until a year after approval. There is uncertainty because the rate that will be applied to the City at the time of the vote is based on an a valuation number that has not yet been established. It is difficult to assess the dollar effect on City taxpayers of annexation in the current economic climate. Mr. Randels pointed out that the Proposition 1 funds are based on County -wide sales tax collections and those receipts may not track the City's sales tax experience. It was noted that the City receives 40% of the funds directly and then breaks down that 40% into half for public safety and half returned to the County for park and recreation services. Public Comment Patrick Moore asked a series of questions and indicated the City should not have agreed to a fire district consolidation and suggested the Fire District streamline their budget. He added that it will be quite a job to educate the voters on a levy proposition. City Council Special Business Meeting of July 11, 2011 Page 2 of 5 Fire Chief Gordon Pomeroy spoke in favor of proceeding with the 43 cent special purpose levy. He would like to proceed with annexation as well but understands the best option now may be to set the governance issue aside. He acknowledged the City and District have a firm 20 year agreement in place. He also noted that if the proposition does not pass, the Fire District would be forced to make cuts which would affect the present level of service. Mr. Welch spoke to the need for improved service and economy of scale, noting that the Fire District is really primarily a medical service that does fire when needed. There has been a constant increase of medical calls every year. Chief Pomeroy estimated a 40% increase in the last few years. Mr. King supports the 43 cent levy and also supports the continued pursuit of annexation as soon as possible. The current financial disparity is a consequence of contractual consolidation. Annexation is the final step that will cure the financial differences. He urged the Council to work diligently for annexation but adopt the ballot measure now. Ms. Nelson spoke in support of the 43 cent levy, with a goal to make district and City citizens on equal funding and equal service planes. She also expressed disappointment that the annexation will be delayed, particularly to an unknown date. Mrs. Medlicott agreed that she is uncomfortable with the annexation issue being left on the table at this time. Ms. Robinson stated she sees the 43 cent levy as a bridge to equalization and added that if the valuation change is less extreme, it might be possible to levy a smaller amount in 2013. She would like to keep the tax burden as low as possible and is also concerned about potential City budget cuts for 2012 which will occur if the levy is not passed. Motion: David King moved direct the City Manager and the EJFR Joint Board to negotiate with the Fire District changes in the pre- annexation agreement to establish an effective date for annexation of 2014. Mark Welch seconded. Vote: motion carried, 6 -1 by voice vote, Kris Nelson opposed. Motion: David King moved direct the administration to draft a ballot measure to establish a "Special Purpose" Fire Service lid lift of $0.431$1, 000 for the November 2011 election that sunsets in the event of annexation. Laurie Medlicott seconded. Vote: motion carried unanimously, 7 -0 by voice vote. Motion: George Randels moved direct the City Manager to come up with a budget plan that would address reallocation of the sales tax now going to fire purposes for other public safety purposes. David King seconded. Vote: motion carried unanimously, 7 -0 by voice vote. RECESS Mayor Sandoval declared a recess at 8:39 p.m. for the purpose of a break. City Council Special Business Meeting of July 11, 2011 Page 3 of 5 The meeting was reconvened at 8:52 p.m. Ms. Sandoval noted that the issue has been on the table for a very long time. It is difficult to have all of these years of information be disseminated to the public; she hopes the press will take some responsiblity to get facts correct. If there are questions, she urged them to ask as it is imperative that the first step out of the gate is correct. The four Councilors not on the Fire District Board have had a difficult road as well and they need to grill the representatives and chief as thoroughly as possible before it goes to the public. Now we can defend the conclusion but the dissemination of information is still difficult. The Council had to understand all the issues. She also expressed appreciation to staff for their intensive research. Public safety is important to the public and she will support the levy. NEW BUSINESS Resolution 11 -021, Approving the Transfer of $54,995.23 from the City's Contingency Fund to the Fire Fund Mr. Timmons reviewed the packet materials. He noted that the proposed transfer would allow the City to meet the balance of the payment to the Fire District for District debt service. Sales tax revenue from Proposition 1 is allocated to this expense but does not cover the entire amount. Mr. Timmons noted that the last time the contingency fund was used was in response to the loss of ferry service. The Council must authorize expenditures from the contingency fund. The amount is approximately half of the existing contingency fund and the fund will be built up again for future needs. There was no public comment Motion: Laurie Medlicott moved to approve Resolution 11 -021, Approving the Transfer of $54,995.23 from the City's Contingency Fund to the Fire Fund George Randels seconded. Vote: motion carried unanimously, 7 -0 by voice vote. COUNCIL COMMITTEE REPORTS Finance and Budget: David King reported that the Committee has discussed Fire Service funding issues and utility rates. The Committee will be bringing forward a recommendation regarding changes to utility rates. Community Development and Land Use Committee: George Randels reported on discussions regarding economic development with Port representatives and creation of a draft comment letter on the issues. General Services Committee: Mark Welch reported the committee has not met this month. Information and Technology Committee: Mark Welch reported on discussions regarding City Council Special Business Meeting of July 11, 2011 Page 4 of 5 broadband issues and the City website. Community Services Committee: Catharine Robinson reported that a letter has been drafted which will be sent to various festival and other users of public services and streets to apprise them of the City resources they are using and offering some training to help defray costs the City has incurred. Facility use policy and fees were also discussed as well as the community services budget. Ms. Nelson added that a no- charge invoice will be sent with the letters as an educational tool. ADJOURN There being no further business, the meeting was adjourned at 9:11 p.m. Attest: Pamela Kolacy, City Clerk MMC City Council Special Business Meeting of July 11, 2011 Page 5 of 5