Council gets early jump on budget, utility tax discussion
By Craig Howard
With apologies to Perry Como and Bing Crosby, it was beginning to look a lot like Christmas - or at least Thanksgiving - at Liberty Lake City Hall in July.
While holiday ornaments and other signs of the season may remain stowed away in cardboard boxes for at least a few more months, the Liberty Lake City Council is beginning to address issues that generally emerge when a layer of frost adorns the practice green at nearby Trailhead golf course.
At the July 16 council meeting, Finance Director R.J. Stevenson provided a backdrop for the first public hearing related to the 2014 municipal budget - a hearing that drew no public response when Mayor Steve Peterson opened the floor to citizen feedback. Prior to Stevenson's presentation, Council Member Lori Olander presided over a workshop discussion on the city's utility tax, a topic that will likely receive its share of attention before the final budget is approved.
Olander opened her presentation by acknowledging the workshop would be an introduction to a more detailed conversation that will take place at the council retreat, scheduled for Aug. 11. She did emphasize that the governing board should consider the history of the utility tax going back to when it was first introduced and passed as part of the 2010 budget.
"As a citizen, my recollection is that it was temporary when it was put into place," Olander said. "The promise was that it would be repealed once city finances were more stable."
"I think government will always find ways to spend money," Olander said. "The question I'd like us to ask ourselves is, Do we need this utility tax moving forward?'"
Olander conceded that she and her fellow council members have "spent money on great things" like road upgrades and the Liberty Lake Ball Fields but reiterated that "we still need to talk about the possibility of reducing the utility tax."
Referring to the city of Spokane Valley's 6 percent phone tax (with resulting revenue going to a dedicated road fund), Olander said the city would need to cut its utility tax in half to be comparable. Previous debates - which have included input from a utility task force assembled by the Greater Spokane Valley Chamber of Commerce as well as Liberty Lake-based companies - have included the recommendation of an approach that would lower the rate on gas and electric charges to lessen the burden on local businesses.
"My goal is not to say This is how it has to be,'" Olander said. "I'm not an expert. I just think we need to have the discussion."
Council Members Josh Beckett and Cris Kaminskas spoke out in favor of Olander's pitch at the July 16 meeting with both saying they would like the tax to be eliminated completely.
"We need to generate revenue - I'm not disputing that this is a very real and valid concern," Beckett said. "But we told the citizens that the utility tax was going to be temporary. I'd like it to be gone. Economic conditions have improved. City revenues have increased."
Stevenson shed some light on a scenario that would include a budget without the tax in his mid-year report on city finances. If all remained the same on the expenditure side, the city would be facing a deficit of $401,364 in 2014 without the utility tax in place. The shortfall would increase to $549,134 the following year and $768,668 by 2018.
With revenue from sales tax and permits eclipsing projections for this year, Stevenson said the city is looking at a surplus of $488,310 by the end of 2013. Car and RV sales have been the drivers on the sales tax side while other sources of revenue like wholesale trade and the municipal golf course - where income is exceeding expenditures by $70,000 - have contributed to the windfall.
Looking ahead at the five-year financial forecast, Stevenson described the budget picture as "very sustainable."
The mayor opened the public hearing on the budget by noting that "it is imperative that citizens give us their priorities on the budget." He added that as the city grows, the city has a responsibility to provide municipal services that range from law enforcement to the maintenance of roads and greenspace.
"It's imperative that we maintain the place that people were looking for when they first moved to Liberty Lake," Peterson said.
There will be two additional public hearings on the budget in November.
After cancelling its July 2 meeting due to a light agenda and proximity to Independence Day, the governing board gathered briefly on July 9 to address the topic of additional funds for the Harvard Road roundabout project, scheduled to begin this summer.
The deliberation was necessary based on bids for construction of the roundabout coming in close to 11 percent above the estimates initially provided by the Washington Department of Transportation. However, on Tuesday, City Administrator Katy Allen acknowledged that city had not been aware that the original WSDOT numbers "included construction estimates only, not the complete buildout, fully loaded."
State sales tax, a construction management fee, state overhead and a 4 percent construction contingency were all absent in the first interlocal agreement. The lowest responsible bid of $1,217,332.08 was filed by the Wm. Winkler Co., based in Newman Lake.
With the revisions in place, the total increase to the project rings in at $173,594.13, shifting the city's share from $497,565 to $671,159.13. The city's portion will draw upon the Harvard Road Mitigation Fund for $610,000 and the Street Capital Fund for $61,159.13. Allen noted that WSDOT did contribute $175,000 for design of the roundabout "and also managed the bidding process on their nickel."
On July 9, council unanimously approved an amendment to the interlocal agreement with WSDOT and authorized Mayor Steve Peterson to sign the agreement. The vote was 5-0 with Council Members Josh Beckett and Shane Brickner absent.
"We have the money, we just hadn't allocated it," Allen said.
The city will seek reimbursement of the $61,159.13 from the street fund through the Local Infrastructure Financing Tool, a state fund that provides support for upgrades to roads and other infrastructure. Allen said the goal is to have the project started by mid-August and wrapped up by late October.
Allen added that there are no scheduled road shutdowns during the project outside of one week that will involve closing down the eastbound I-90 offramp. She said there will likely be four-way stops at the project site and also an option for construction crews to work at night when there is less traffic.
"It will go fast," Allen said. "It's not a difficult project."