2018-08-21 Finance Minutes - Laserfiche WebLink

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City of Tukwila City Council Finance Committee FINANCE COMMITTEE Meeting Minutes August 21, 2018 5:30 p.m. Hazelnut Conference Room, City Hall Councilmembers: , Chair; Dennis Robertson, Kate Kruller Staff: David Cline, Brandon Miles, Stephanie Brown, Erika Eddins, Peggy McCarthy, Vicky Carlsen, Jeff Friend, Wynetta Bivens, Bruce Linton, Chris Flores Guests: Andrea Reay, Seattle Southside Chamber of Commerce; Becky Smith, Unibail- Rodamco-Westfield Southcenter CALL TO ORDER: Committee Chair Quinn called the meeting to order at 5:30 p.m. I. PRESENTATIONS II.BUSINESS AGENDA A. Business & Occupation (B&O) Tax Revenue Considerations Staff presented additional information about a B&O tax as requested by the Committee in July. Because sales tax revenue is flattening and sales tax mitigation payments are ending, the City is facing revenue shortfalls with a potential budget gap of more than $2 million. Of options previously discussed, a B&O tax would provide the greatest additional revenue. B&O tax rates are calculated on gross receipts and a city can provide an exemption threshold. 43 cities in Washington State have a B&O tax with varying approaches, and varying costs associated with staffing and implementation. Staff estimates that a B&O tax could provide revenue between $700K - $3 million. Staff presented answers to questions previously raised, outreach efforts to date, draft ordinances, other options, an implementation timeline, and a draft communications plan. Chair Quinn reiterated that the Committee is still investigating this topic and may or not make a recommendation to move forward. Councilmember Robertson asked for an example of how the City of Kent handles warehousing with its B&O tax, and he is interested in this because of heavy truck impact to roads. One of the alternative options proposed is to raise the gambling tax by 1%, and he wonders if that would drive out those establishments. Staff indicated that they would do outreach to find out. Councilmember Kruller stated that she opposes a B&O tax. Chair Quinn would like information about providing different rates for nonprofits and small businesses. Councilmember Robertson pointed out that Renton dedicates its B&O revenue to the arterial street fund. Chair Quinn invited public comment, and Ms. Reay stated that she feels optimistic about the work the Chamber is doing toward the streamlined sales tax issue and finding relief for impacted cities. She noted that business outreach takes time and the Chamber could be a partner in this. Ms. Smith stated that the proposed timeline is very aggressive and is concerned about the impacts as the mall is experiencing its highest retail traffic in its history. She appreciates that the City is also considering alternatives. Chair Quinn stated that the discussion will continue in committee and in a work session and he thinks looking at sales tax revenues by categories will help with decision making. RETURN TO COMMITTEE.