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HomeMy WebLinkAboutCity Council Meeting - Council Workshop - Minutes - 10/06/1998 Committee of the Whole Meeting Minutes October 6, 1998 COMMITTEE MEMBERS PRESENT: Leona Orr, Chair, Sandy Amodt, Tom Brotherton, Tim Clark, Connie Epperly, Judy Woods, Rico Yingling STAFF PRESENT: Brent McFall, Cliff Craig, May Miller, Dena Laurent, Don Wickstrom, Sue Viseth, Jim Hams, Jackie Bicknell The meeting was called to order at 5:05PM by Chair, Leona Orr. Update of 1998 Target Issues Brent McFall briefed the Committee on the status of where staff is in terms of accomplishing the goals that the Council set out in their policy planning retreat that was held last April. Mr. McFall said the target issues are an 18-20 month set of issues, as staff will still be working on targets established this year when the Council meets again next year. One of the top priority issues for the Council was establishing a two-year budget process. Mr. McFall said that staff is in the process of doing that now and will take the next few months to really look at what is involved in a two-year process, and then come back to the Committee about mid year 1999. He said that state law requires a two-year budget to be adopted as it commences in an odd numbered year, so the 2001, 2002 two-year budget would actually be coming to the Committee in the fall of the year 2000 if the Council decides they want to proceed that way. A factor of consideration is the technology plan process of purchasing new financial management software. One of the criteria will be looking at whether or not it has the capacity to do a two-year budget course as well as forecasting. The next top priority issue had to do with long-range financial planning and bringing more finance reports to the Council. A lot of forecasting is done now on a six-year basis rather than a ten-year basis which Council identified as the time period they wanted staff to look at. Mr. McFall said there needs to be more detail in the future, which will create significant work items through the year of 1999 as plans are developed and linked back to the comprehensive and capital group plans. Council identified the Productivity Improvement Program as a top priority. At the last Council meeting, a contract was authorized to proceed with the study of multi departmental permit processes. Mr. McFall said a consultant from Parks would be coming the next week to start that. He said staff hopes by the end of the year to have some recommendations from the consultant for that particular area of the operation and be able to implement those in 1999. The next top priority issue the Council identified was Neighborhood Traffic Control. Mr. McFall said that the City had hired the fast Neighborhood Traffic Control Specialist who is working on very specific issues in some neighborhoods that need immediate attention. The City is hoping to get the immediate problems taken care of, and then have the Neighborhood Traffic Control Specialist develop a program and policies that outline the City's standards and requirements with a comprehensive program. Funds will be identified in the 1999 budget for physical improvements that may come about as a result of the Neighborhood Traffic Control Program. . Another top priority was Retail/Economic Development Strategy. The City is developing a program of marketing strategy specifically for the downtown and gathering materials to be used with potential downtown developers, redevelopers, and to fulfill some elements of the downtown strategic plan. In addition, another 1999 budget item is an actual position to deal with economic development activities. Mr. McFall spoke about Impact Fees. He said the school impact fee issue with the Kent and Federal Way School •Districts had been brought up to date. Their capital improvement plans have been adopted as part of Kent's comprehensive plan and their fees have been updated and adopted and are being collected. Other options are being researched with respect to impact fees such as looking at the issue of traffic impact fees versus the current policy. Mr. McFall said that in regards to the top priority of Reducing Taxes, staff will be able to present a property tax reduction in the 1999 budget. Tim Clark asked about the passage of Referendum 49. Mr. McFall explained that Referendum 49 is the transportation referendum which diverts motor vehicle excise tax out of the state general fund into transportation funding and should be beneficial for the City of Kent in terms of potentially providing some transportation assistance. He said the City should not be significantly hit by its impacts. Mr. McFall also mentioned Referendum 47, and said one of the most significant items is the limitation of the amount of property tax that the city can collect which is linked to the implicit price deflator index. The implicit price deflator for 1997-1998 is .85%. That means the City will be able to increase property tax collections (not property tax rates) by .85 of 1%more than in 1998. He said a super majority Council can increase that amount above the .85 %but the budget the Mayor will be recommending stays within that amount. When the City is limited by the implicit price deflator, it sets a new base every year, and every year the City falls more behind because costs are more closely linked to the Consumer Price Index than to the Implicit Price Deflator. Mr. McFall said a high priority issue, Annexation Policy and Strategy had been discussed at the Public Works/Planning Committee and will be going to Council. Regarding the Fire Department/Life Safety Policy .Direction, he said that the City is waiting to see what happens with the EMS discussions that are ongoing. He said that he and Chief Angelo are heavily involved in that work and a report should come out by the end of the year. The movement appears to be back towards a voter approved levy to support EMS. The way the current state law reads is that in order for an excess levy for EMS to go on the ballot,the cities with populations in excess of 50,000 must grant their approval for the item to be placed on the ballot. That means that Seattle, Bellevue, Kent,Federal Way, and Shoreline must grant their approval to have the item placed on the ballot. Seattle approves but the suburban cities have said no. For New Urbanism Development,the City is working on Phase U zoning code amendments which provide opportunity for that type of development. Additionally, Mr. McFall said, Council had adopted Planned Unit Development standards and the first major PUD was coming through the permitting process and would be on the agenda for that night's Council meeting. The Parks and Recreation Department party planners are working on the 2000 Community Celebration and looking at several approaches. One approach is to take the City's existing events and fold them into a consistent theme of celebrating the new millennium and then also to have some special events. Mr. McFall said the Transportation Funding Policy was mentioned with respect to impact fees and staff is working on other options to present to the Council. Tim Clark asked about staff support for the Transit Advisory Board. Brent McFall said there had been staff support for that previously but there was a vacancy in that area now. Rico Yingling asked if staff was looking at higher level processes like management and how management of the total program would be folded in as opposed to process by process. Mr. McFall answered that there had been a lot of continuous improvement and performance analysis but it hadn't been brought together under standardized management practice. He said he would like to get some practices in place at the management level and then push that • throughout the organization. Mr. Yingling asked about the economic development strategy. He wanted to know if the new person to be brought in would have the role to help create economic development policies. He also asked if there would be, at some point, evaluation and review of the processes for developing policy and direction at the Council •level to see how efficiently the process is working. Mr. McFall said that is not in the direction now but is something the City will work on. 1999 Legislative Agenda Dena Laurent, Government Affairs Manager, said her office had tracked more than 200 pieces of legislation during the last session for their impact on the City of Kent and then gave updates at Council meetings. She gave the Committee an overview of the items she considered most important. She said she wants to keep a full eye on all the pieces of legislation having to do with Local Government Revenue Preservation and carefully consider the City's position in regards to the financial impact it may have. Fiscal Notes was another very important issue. Ms. Laurent said fiscal notes help legislators gauge the impact of measures on local government finances. She said that the AWC has been working on additional support for the fiscal note process so legislators can really rely on that information as they make decisions. Economic Development legislation gives cities the authority to use taxes to offset public improvement costs and encourages private development. Many other states have tax increment finances where they can use increases in tax revenue to support the cost of public improvement. Washington doesn't have that tool, and Ms. Laurent said she looks for additional tools that will help cities undertake improvements for economic development. In Information Technology, the year 2000 issue will be big. At the last session there was a bill proposed in both houses that would have granted immunity to both states and local government for system failures that •may occur as a result of the year 2000. She said every effort is being made and significant resources dedicated to ensure continued municipal services,but if for some reason there are failures, she would like to have those damages limited to existing and administrative or contractual remedies. In Land Use and Environment regarding Water Rights and Basin Planning, legislation in different port decisions says that if water rights are not being used at the present,they aren't needed and must be given up. The 1999 Legislative Agenda position asks for legislative and judicial clarification that water rights which have been set aside for future growth do in fact remain in the City's possession. Ms. Laurent said it's expected that the salmon issue will have significant financial impact on cities and other governmental entities. The policy statement says cities need to be involved in the decision making and want ongoing evaluation of the requirements that are placed on them. Telecommunications&Electric Utility Deregulation are both expected to be big issues this session. For cities and the extension of the telecommunications industry, the issues are to maintain authority over the use of the public right of way and to preserve authority to levy utility taxes. Committee Member, Tom Brotherton, asked how much of the Telecommunications Act of 96, a federal law, is under the control of the state. Ms. Laurent responded that the Telecommunications Act covers how companies operate in the general economy, how they actually lay lines, and what authority they have. Because cities' authority is granted by the state, telecommunications companies' authority and rights are governed by the state. Under Electric Deregulation legislation, local governments should retain the authority to manage industry facilities, public right of way, and the authority to tax utility providers; preserving equal access,preserving basic service at reasonable rates, and having utility providers participate in environmental protection. In the Transportation area, Ms. Laurent said significant support for public safety funding is received from the motor *vehicle excise tax fund for the criminal justice program. Those programs have been shifted to funding by the general fund and the revenues have actually increased. She said significant funds were set aside for freight mobility as well as local transportation projects. Chair, Leona Orr, suggested that the Committee take any questions or suggestions to Ms. Laurent who could When bring the issue back to the Oct. 20, 1998 meeting of the Council under Other Business. Financial Report and Budget Assumptions Finance Director, May Miller, said the general fund is up about 1% mostly due to one-time-only sales tax from 8 vendors, with some increases in building permit activity. Ms. Miller said there weren't any other significant changes other than the golf course did better in August, actually exceeding the budget for the first time in 1998. She said it is still behind and there aren't enough months or revenue to recover the shortfall by December. In a breakdown of revenue sources, Ms. Miller said that 76% of the general fund revenue comes from property and sales taxes. Adopting the 1.9%property tax made the base smaller and so that percentage is growing smaller and not keeping up with expenditures. Sales tax on the other hand has increased. In addition to the 76%, another 14% of revenue comes from the Utility tax, and a small amount from the Gambling Tax. Overall, the largest portion of revenue is from taxes. There are also fees charged, permits, park fees, some fines, and some shared money that the City gets from King County and from the State. Ms. Miller said Property Taxes have been showing a 10% increase. By levying .85%,the City will receive $129,000 more next year. In addition to that,there is new construction that has been permitted and new buildings that have been completed. The budget assumption shows$16,000,000, a one million increase, but the only real increase is the $129,000. The other dollars are from new buildings that are now completed. In addition, there are two voted levies,one the senior housing and the other public safety issues,but neither is paid until the year 2009. If the City went with a 3% levy instead of.85%, there would still be a rate decrease and it would save the citizens owning a$200,000 house$14.00 a year. If the County came through with its 5%,there would still be a property tax decrease. More people are helping to pay so everyone's rate goes down even as the general government rate increases. If the increase was the full 6%, (which is what the other cities are doing),that would give Kent another$400,000 and there would still be a very small rate decrease. Even at the full maximum,because the assessed valuation is growing, there would be a rate decrease. If the assessed valuation stays the same and doesn't grow at all and there isn't any growth in the economy,then the taxes go the other way. Ms. Miller said Sales Tax has been really strong this year and the budget is going up 7.6%. She said there would be a decrease in the one-time-only sales tax. This year it was$1.8 million and next year it should be $600,000 with primarily automation type things. The budget figures a modest increase of 2 '/z% for inflation or about$333,000. Utility Taxes were up 4%, primarily from telephones. Gambling taxes were down a little, as new legislation was passed that allowed people to exempt out their cost of business or cost of sales. Licenses and permits had a$97,000 increase. In the Intergovernmental category,prisoner charges were way down;the City's beds have been full and the U.S. Marshals are gone. The Excise, Liquor,Auto and Profits taxes are all annexation and population based. Fines and Forfeitures are down and have been adjusted to circulate through the courts. Interest income is up because the City has a larger fund balance. The total budget is up 7.7%with the • changes. The meeting was adjourned at 6:30PM.