HomeMy WebLinkAboutCity Council Meeting - Council - Minutes - 07/31/2012 Kent City Council Meeting
KENT W.15-11N 6TON July 31, 2012
A special meeting of the Kent City Council was called to order at 7:30 p.m. by Mayor
Cooke. Counalmembers present: Albertson, Boyce, Higgins, Perry, Ralph, Ranniger,
and Thomas. (CFN-198)
A. Infrastructure Funding; (CFN-1321) Council President Higgins outlined some of
the impacts to the city which have resulted in a lack of funding for maintenance of
parks and streets, including the enactment of streamlined sales tax, Initiative 695, a
10/c property tax cap, and the loss of real estate excise tax. He noted that King
County delayed maintenance in the Panther Lake area, knowing it would be annexed
to the city. Higgins added that City staff has not received cost of living increases for
the past four years.
Higgins explained that two citizen committees were formed to review the parks and
streets situation and to make recommendations to the Council. He outlined their
timing and recommendations, noting that not all recommendations were enactable in
full. He stated that an ad hoc committee made up of three Council members was
then formed, which came up with the following final recommendations: requesting a
37 cent levy lid lift (23 cents for parks and 14 cents for streets), asking Administra-
tion to find $2,000,000 in efficiencies in the current general fund, and working with
the business community to find $4,000,000-6,000,000 in additional revenues. He
said the full council met in two workshops to discuss the issue, and noted that this
special meeting is being held at this time due to the deadline for getting a levy lid lift
on the November ballot. He concluded by saying that the problem is not going away
and that if it isn't dealt with, facilities and streets will have to be shut down, rebuilt,
or torn out. He reiterated that the issue is simply about maintenance.
Albertson assured everyone that this issue has been discussed for years. Ralph
concurred and opined that, although the situation is desperate, solutions can be found
by working together with the community.
B. Efficiency Study. (CFN-198) City Attorney Brubaker distributed a resolution
requesting that the mayor's office take all necessary steps and to allocate the
necessary funds to hire an independent consultant to analyze existing city staffing
and service structures and provide recommendations to generate further efficiencies
in governmental operations, with the goal of reducing the city's annual budget.
Albertson read the title, recitals, and Section 2 of the resolution aloud, and all agreed
to correct the phrase "fund new parks and transportation infrastructure projects" to
"maintain parks and transportation infrastructure" in Recital C.
Boyce moved to adopt Resolution No. 1862, as amended, requesting the Mayor's
Office to hire an independent consultant to provide recommendations to generate
further efficiencies in governmental operations. Albertson seconded. Higgins noted
that offers of low and no cost help have been received, and said the study will
document cuts which have already taken place, and may result in efficiencies which
would be easy to implement. Albertson, Boyce, Perry, Ranniger and Ralph each
spoke in support of the study. The motion to adopt Resolution No. 1862 then carried.
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Kent City Council Minutes IJuly 31, 2012
C. Business Tax. (CFN-104) The City Attorney distributed copies of two proposed
ordinances which would implement a new business and occupation tax focused
primarily on warehouse operators in the city, and explained that one would enact the
tax and the other would provide for administration and enforcement of the tax. It
was noted that due to recent changes in tax laws, the city no longer receives
sufficient revenue from warehousing activities to support the transportation infra-
structure needed to serve those activities. The ordinances are intended to generate
additional revenue to maintain, repair, and operate the city's existing transportation
network and to cause those business entities which contribute most to the use and
degradation of city streets to pay the most significant share of the cost. The City
Attorney explained that the four primary areas of business activity are sales of retail
services, sales of retail, manufacturing, and wholesaling, and said that as the
ordinance is currently written, no B & O tax would be imposed on manufacturing,
sales at retail, and sales of retail services, and that only 2/10 of 1% would be
imposed on sales at wholesale, which is warehouse and distribution. He added that
the B & O tax would only be imposed on warehouse or wholesale businesses whose
gross receipts for the year exceed $500,000.
Albertson moved to adopt Ordinance Nos. 4040 and 4041, adding new chapters 3.28
and 3.29 to the Kent City Code implementing business and occupation taxation and
administrative provisions beginning January 1, 2013. Perry seconded.
Albertson stated that there has been vigorous community input on this issue, and
opined that if residents are asked to solve the problem by raising their own property
taxes, the trucks which are destroying the roads should also be part of the solution,
and that theses ordinances begin to address that. She stated that if the roads are not
fixed, there will be no economic development, and urged council members to adopt
the ordinances.
Higgins said adopting a B & O tax tonight would be a big mistake because it hasn't
been thoroughly vetted by city staff, council members, or the public. He reiterated
that the business community has been working with the city and said he feels that
process should be honored. He urged council members not to support these
ordinances. Albertson said adoption of the ordinances is an early first step and makes
a statement that the city recognizes where the damage is coming from and is doing
something about it.
Boyce spoke against the motion, agreeing that everyone should be part of the solu-
tion, but expressing concern about the timing. He said he'd like to continue working
with the business community on this issue. Ralph agreed that this is not the time for
this ordinance, and that the conversation with the business community must
continue. She pointed out that if the levy lid lift is passed, most business owners will
be impacted, as they are property owners.
Perry said that a levy lid lift is not the only option, and that it should be a last resort.
She noted that the business community and the ad hoc committee agree that
$4,000,000-6,000,000 is needed, but that there is no consensus as to where it could
come from. She said a B & O tax impacts those who use the streets most and cause
the most damage to them, and pointed out that a levy lid lift is for only six years,
after which funding would have to be requested again, whereas a B & O tax is
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Kent City Council Minutes July 31, 2012
sustainable. She noted that Kent's overall tax rate is significantly higher than that in
other cities in the county. She said property taxes are not the answer, and that it is
time to enact some sort of business tax. Perry pointed out that discussions on this
issue began months ago and that the matter has been thoroughly vetted. She noted
that the Chamber of Commerce recommendation does not include a B & O tax or a
head tax, but does include sending the issue to the voters, charging a $20 car fee,
and finding $2,000,000 in efficiencies in the city budget, which does not fit with ad
hoc committee's recommendation of $4,000,000 to $6,000,000 in business taxes.
Ranniger said that, though vetted, discussions on a B & O tax have not necessarily
been transparent. She suggested not making a decision at this time and continuing
talks with the business community about how they can help in solving the problem,
including the possibility of a B & O tax for all businesses. She added that most
residents have not felt the pain of the reduction in staff and services which have
already taken place, since attempts have been made not to let them show. She said
the efficiency study is a good opportunity to bring these cuts to light and to demon-
strate to the community what $2,000,000 in additional cuts would look like.
A brief discussion of the timing of the ordinance and the difficulty in accessing the
amount of taxes paid by businesses in Kent was held.
Upon a roll call vote, the motion to adopt Ordinances 4040 and 4041 implementing a
business and occupation tax failed on a vote of 5-2, with Albertson and Perry in favor,
and Boyce, Higgins, Ralph, Ranniger and Thomas opposed.
Higgins then introduced Resolution No. 1863 and explained that it states that the city
council has determined that those businesses in Kent which contribute to the
deterioration of its street should pay a greater share of the cost to maintain and
overlay those streets, and that it wants to work with the business community to find a
revenue structure which the business owners find most fairly apportions that cost;
that the city council will consider all available revenue structures which will best serve
the needs of the people to have well-maintained streets while imposing the least and
fairest burden on the business community; that the city council intends to enact a
tax, fee, license, or other structure, to be in effect no later than January 1, 2013,
which produces between four to six million dollars per annum for the sole purpose of
street overlays, maintenance, repair, and related improvements; and that the city
council affirms its intent to work cooperatively with the business community as it
develops this new revenue stream, with the firm understanding and commitment that
new revenues are required and must be in place by next year.
Ralph moved to adopt Resolution No. 1863 stating the city council's intention to
develop a new revenue source for street overlays and related improvements to take
effect no later than January 1, 2013. Albertson seconded. Albertson offered a
friendly amendment to the motion to strike the phrase "any other tax or fee
structure" and Perry seconded for discussion. Albertson said that phrase seems
ambiguous and could be interpreted to include car tabs, bonds, and so forth, which
would not be appropriate. Higgins stated that he is opposed to the amendment
because he wants to be able to discuss all options. Thomas, Ranniger and Perry
concurred with Higgins. Albertson then withdrew her friendly amendment and Perry
her second.
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Ralph spoke in support of the resolution because it continues discussion with the
business community. Higgins said though the current package is heavy on the
business community, current revenue streams are heavy on residents, and that the
inequity should be resolved. Albertson said that a resolution is not a law and it may
not get the job done. Thomas noted that there are solutions other than taxes, and
Boyce said he feels a solution can be found by working together. Ranniger also spoke
in support of the resolution and expressed the expectation that conversations with the
business community will continue. Perry said the resolution contains a deadline of
January 1, 2013, which holds the city accountable.
The motion to adopt Resolution No. 1863 stating the city council's intention to
develop a new revenue source for street overlays and related improvements by
January 1, 2013, then carried 6-1 with Albertson opposed.
D. Lew Lid Lift. (CFN-104) Higgins explained that a proposed ordinance provides
for the voters to raise their property tax by 37 cents per $1,000 of assessed
valuation, which would cover a specific list of parks projects and a specific list of
street projects. He noted that both citizens committees and the ad hoc committee
recommended this, and moved to adopt Ordinance No. 4042 providing for the
submission to the qualified electors of the city at an election to be held on
November 6, 2012, of a proposition authorizing the city to increase the tax levy limit
established in RCW 84.55.010 to provide additional funds to improve and add to
existing parks and streets infrastructure. Boyce seconded.
Higgins said asking residents for help is fair, and that without it, Wilson Playfields will
have to shut down, the dock at Lake Meridian will have to be torn out, some streets
will have lanes reduced and/or speed limits cut if this doesn't pass.
At the request of the City Attorney, Higgins moved to amend the sentence relating to
the public works projects near the top of page 5 of the ordinance by adding the words
"improvements to the following streets" at the end. Thomas seconded and the
motion carried.
Albertson expressed opposition to the levy lid lift, saying it doesn't assure residents
that those who are causing the problems to the streets are doing their part in solving
the problem. Boyce spoke in support of the levy lid lift, trusting that the community
will work together. Perry said ongoing funding is needed and that a levy lid lift is not
sustainable, and that the business community must pay their fair share. She added
that when the projects which are on the current list are completed, there will be more
projects to be done, since the entire infrastructure is aging.
Ranniger noted that much of the business community has shown that they are willing
to help the city deal with the challenges, and said she expects them to continue their
effects to assist. Ralph pointed out that this ordinance has come from many hours of
discussion among business owners, residents and volunteers working together to try
and resolve a very real problem. She said a levy lid lift is a good choice because it
allows residents to decide.
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Kent City Council Minutes July 31, 2012
Upon a roll call vote, the motion to adopt Ordinance No. 4042 as amended then
carried 4-3, with Boyce, Higgins, Ralph and Ranniger in favor, and Albertson, Perry
and Thomas opposed.
ADJOURNMENT
The meeting adjourned at 9:30 p.m. (CFN-198)
Brenda Jacober, C
City Clerk
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