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HomeMy WebLinkAboutCity Council Meeting - Council Workshop - Minutes - 07/16/2013 DENT Kent City Council Workshop July 16, 2013 The meeting was called to order at 5:30 p.m. by Council President Higgins. Councilmembers present: Higgins, Thomas, Boyce, and Albertson. Councilmember Ranniger arrived at 6:13 p.m. Council President Higgins moved item 4 before item 1. ShoWare Center Public Facilities District Appointment. Council President Higgins introduced the item and noted that the appointee would be announced later in the workshop. Liauor Control Board I-502 Regulations. Chief Administrative Officer Tom Brubaker introduced the item. He discussed the fact that the State has released regulations and said staff is requesting direction on this item. Councilmember Boyce confirmed with Mr. Brubaker that if the Council wants to rezone any area in the City it will take some time. David Galazin, Assistant City Attorney communicated that on September 16 the Liquor Control Board will be accepting applications for the three types of facilities and if there aren't any zoning restrictions and the location has already been picked there is little the City can do. Councilmember Ralph confirmed that the City can have a moratorium against recreational marijuana facilities. Council President Higgins tabled the item until later in the workshop. B&O Tax Impacts - 3PL & Business Thresholds. Bob Nachlinger discussed the 3PL item and said 3PL businesses have told the City that their square footage tax is about five times more than what they pay for their B&O tax. He said they were right and that they would in fact be paying a little over 5 times more. However, he noted that there is essentially no difference between them and a regular business warehouse in the City. Mr. Brubaker added that it appears that all of them are being taxed about 5 times more and that the square foot tax is doing what the Council intended. He noted that the staff recommendation is to make no revisions. Councilmember Ralph verified with Mr. Brubaker that they all are coming out at 5 times over their gross receipts. He added that Mr. Nachlinger will communicate to them and bring back the item in two months to the Council with their responses. CAO Brubaker communicated that there have been inquiries about the filing of the B&O taxes. He noted that this is a brand new tax and there needs to be a database established concerning the structure and makeup of businesses in Kent. He felt it is critical to keep the tax the way it is and bring up adjustments after one year of data collected. Mr. Nachlinger stated that the only way to determine what the business environment looks like is to have them file quarterly. He explained that the larger the business is, the more frequency they will have to file. However, the City must determine what the businesses are, what they are doing, and how much revenue they 1 Kent City Council Workshop Minutes July 16, 2013 are producing. He highlighted the filing statuses and stated that the City is learning more about B&O taxes every day. He discussed exemptions and how other cities handle them. He noted that the total B&O tax filings are $911,000 and that the second quarter B&O taxes aren't due until July 31st. Council President Higgins confirmed that the majority of the filers will be on non-filing status and Mr. Nachlinger explained why. He also noted that even non-filing B&O tax companies will be required to get a business license and that is how the City can identify their revenue reporting. Mr. Nachlinger communicated that the City will encourage companies to continue to file online so the City can proceed with getting the revisions done to the ordinance. Mr. Nachlinger communicated that the City has an office for businesses to register for B&O and file their taxes. Councilmember Ralph confirmed that the online payment option will be up on Friday and quarterly notices will be sent soon. Councilmember Boyce stated he was pleased that the City is going to wait and collect the data, then make revisions. Councilmember Ralph said she has heard positive things about the B&O tax workshop. Mr. Nachlinger replied to Councilmember Boyce that another report concerning B&O taxes will be given to the Council in August. Council President Higgins communicated those small businesses owners should hang on until the end of the year until changes can be made. CAO Brubaker communicated that the staff needs to collect the issues and get one revision out to the Council for their input. Councilmember Albertson arrived at 5:55 p.m. Legislative Report. Doug Levy, Contract Lobbyist, communicated that the legislative tone is based on a Supreme Court decision which has communicated to the State that there should be a $4.5 to $5 billion,ramp up in its investment in K-12 education funding in the State. Mr. Levy also communicated that the $5 million SST mitigation account has been kept intact. He discussed the Marketplace Fairness Act and the equalization of online sales and retail sales tax. He also noted that 50% of the liquor profits are being brought back in 2015. He stated that the initiatives to privatize liquor control were created for public safety and in 2012 the legislature froze the growth that goes to entities. He stated there isn't enough recognition in the State that the enforcement is localized and the funds to handle the enforcement aren't there. He discussed the telecommunications parity bill and stated that the City came out a little ahead. He noted that House Bill 1971 puts a tax on prepaid wireless and charges landline users the proper tax amount. It also throws out the back tax claims from Sprint and other entities. He noted that on levees there are pots of grant money in general categories that the City can compete in very well. He noted that the funds that have come out of the Public Works Trust Fund has hurt the City and Kent will 2 Kent City Council Workshop Minutes July 16, 2013 need to be more conservative in the future when it attempts to tap into that fund because the legislature took two thirds of those monies and transferred them into an education legacy account. He communicated that the City is well positioned when it comes to transportation funding and the funding for Interstate 167/Highway 509 is poised to move forward. He communicated that there is $409,000 that the City can use as, matching funds to obtain funds for future projects next year. Councilmember Ralph communicated that South County Area Transportation Board (SCATBD) will be sending a letter to the legislature communicating that there is an emergency situation when it comes to transportation infrastructure funding. Mr. Levy stated that the capital budget for the Interurban Trail was bolstered by $750,000. Councilmember Albertson verified that he predicts Metro will go with their 17 percent cut scenario and there won't be any session for or any funding for transportation. Council President Higgins stated that he appreciates Mr. Levy's work. Liquor Control Board I-502 Regulations (continued). David Galazin, Assistant City Attorney communicated that the State isn't going to consider any local controls. He added that a moratorium is an option, but felt it would make matters worse. He explained that the State intends on issuing licenses even if a moratorium is in place, which would lead to lawsuits. He pointed out that the closest use the City has is collective gardens and they aren't zoned in Kent. He added that on September 16, 2013 applications can be submitted to the State from potential retail marijuana business owners and licenses would be issued in January. He reiterated that recreational marijuana use isn't allowed in Kent and the applicant would have to file an appeal with the hearing examiner. CAD Brubaker communicated that if the City doesn't do anything the current code is like the medical marijuana code, The interpretation would be that since medical marijuana is banned, so would recreational marijuana. He noted that the City can ban recreational marijuana or decide where it can be allowed and zone it. Mr. Galazin added that there are people in the City who would challenge either side of the legislation. Mr. Galazin noted that the liquor control board will consider the application, preliminarily approve, and evaluate it through their process. Councilmember Boyce verified that the City can instill limits on proximity and there would need to be a public process. Councilmember Albertson communicated that there four liquor establishments on 1st Avenue and stated that the City can't ban the use since it is legal. She said there are people in Kent who want to purchase and use marijuana and the City can't ban the use. She said this is a way to obtain tax revenue. Council President Higgins confirmed, by consensus, that a majority of the Council didn't feel any different about medical marijuana than they do recreational marijuana. 3 Kent City Council Workshop Minutes July 16, 2013 Councilmember Boyce communicated that this issue is muddier than it was before since the State has agreed to adopt it as legal and the federal government still says it's illegal. " Council President Higgins communicated that the AWC warned cities to get in front of it and agreed that is what Kent should do. Councilmember Ralph communicated that the City is putting the cart before the horse. However, she stated that she can't agree to allow recreational marijuana use in the City. CAO Brubaker communicated that the staff will do nothing and if the Council wishes to address it in the future they can. He added that if the City gets an application in the future, the City will not allow it. ShoWare Center Public Facilities District Appointment (continued). Council President Higgins announced that Mr. Jeff Piecewicz was chosen as the ShoWare Center Public Facilities District appointee. The meeting adjourned at 6:38 p.m. Ronald F. re, MMC City Cler( 4