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HomeMy WebLinkAboutCOW 2009-09-28 Item 6D - Resolution - Oppose Initiative 1033 Limiting Growth of City Revenue to Annual Inflation and Population Growth CO UNCIL AGENDA SYNOPSIS .rItLA 1 1 Q� Initials NO. 4; 1-01 Meeting Date Prepared by 117ayor i review Conaci/ rer ictt I 09/28/09 10/05/09 1 SH SH I 1 1 u 1 t9o I I I 1 6O` b ITEM INFORMATION CAS NUMBER 09-136 1 ORIGINALAGIND,\ D,vn SEPTEMBER 28, 2009 AEI {ND.\ hn i TITLE A resolution opposing Initiative 1033. CATIG( )RY Discussion Motion Resolution Ordinance 1 Biel Award 1 1 Public Hearing Other Mtg Date 09/28/09 Mtg Date Nitg Date 10/5/09 ilItg Date [lltg Date illtg Date Mtg Date 1SP )NSOR Council Mayor Adm Svcs DCD Finance Fire n Legal 1_1 P &R Police Pr SP( )NSOR's The resolution expresses the City Council's opposition to Initiative 1033, to be on the SUmM\RY November 3, 2009 general election ballot. The initiative would limit growth of certain City revenue to annual inflation and population growth, with any excess revenue remitted to the county for property tax relief. The Council is being asked to approve the resolution expressing opposition to I -1033. Public comments will be accepted at the 9/28/09 and 10/05/09 Council meetings. 1ZI?vIIAK' 1) HY COWMtg. CA &P Cmte F &S Cmte n Transportation Cmte Utilities Cmte Arts Comm. LI Parks Comm. n Planning Comm. DATE: 9/22/09 RECOMMENDATIONS: SP()NS()R /ADN.IIN. Finance Department CoMMrrrm Unanimous Approval; Forward to C.O.W. with changes to Resolution COST IMPACT FUND SOURCE ExiI NDITURI RI AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 9/28/09 10/05/09 MTG. DATE ATTACHMENTS 9/28/09 Informational Memorandum dated 9/17/09 Resolution in Draft Form Estimating Impacts of Initiative 1033 (2009 -2015) AWC Estimating Impacts of Initiative 1033 (2009 -2020) City Minutes from Finance and Safety Committee meeting of 9/22/09 10/5/09 City of Tukwila TO: Mayor Haggerton City Council FROM: Shawn Hunstock, Finance Director DATE: September 17, 2009 SUBJECT: Resolution Opposing Initiative 1033 ISSUE BACKGROUND DISCUSSION INFORMATIONAL MEMORANDUM Jim Haggerton, Mayor If passed, Initiative 1033 (1 -1033) would have a dramatic impact on the City's General Fund revenue. Initiative 1033, scheduled to be on the ballot at the November 2, 2009 general election, would limit the growth of state, county and city revenue to annual inflation and population growth. The Office of Financial Management (OFM) estimates that 1 -1033 would cause the state to loose an estimated $5.9 billion by 2015. They also estimate a loss of $2.1 billion for cities and $694 million for counties. OFM's Fiscal Note includes an assumption that 1 -1033 will apply to all General Fund revenue except grants, state shared revenue, charges for services performed, enterprise activities, interdepartmental charges and investment earnings. The estimated base for 2009 is approximately $33 million. The estimated impact for Tukwila begins at just under $2 million annually, and continues to grow each year as the property tax base erodes under the Initiative. Any growth in General Fund revenue above the inflation rate plus the population growth rate would be remitted to the county for property tax relief in the following year. The effect of 1 -1033 would be to limit the City's ability to provide essential services at their current level. 1 -1033 would also be a disincentive to development and annexations, particularly for areas with low population numbers. Virtually any growth in City revenue as a result of an annexation would be remitted to the county, unless the area has a good deal of population density, and would not be available for the provision of services in the annexation area. Also, generally speaking, growth in City revenue from development or redevelopment would be remitted to the county since such growth is not associated with population increases. Inflation right now is projected to be less than 1% in the short -term, and less than 2% over the next few years. The average growth in INFORMATIONAL MEMO Page 2 population for Tukwila for the last ten years is 0.50 This means there is little room for growth in City revenue if this growth is limited to inflation or population increases. The two attached spreadsheets are based on a projection model developed by the Association of Washington Cities (AWC). The first spreadsheet is the original AWC model for 2009 -2015. It shows the impact would be $970,123 in 2015, and $1,772,246 in 2016. The second spreadsheet is the same model projected out to 2020 with similar assumptions. This page shows the impact on the City of 1 -1033 increases each year, and it also shows the property tax base could deteriorate due to the "property tax relief' payments made to the county. RECOMMENDATION The Council is being asked to approve the attached Resolution opposing Initiative 1033. This item is scheduled to be discussed at the September 22, 2009 Finance and Safety Committee meeting, the September 28, 2009 Committee of the Whole meeting and subsequent October 5, 2009 Regular Meeting. ATTACHMENTS Draft Resolution Estimating Impacts of Initiative 1033 (AWC) 2009 to 2015 Estimating Impacts of Initiative 1033 (City) 2009 to 2020 HAI nfoMemo11033Res.doc A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, EXPRESSING THE CITY COUNCIL'S OPPOSITION TO INITIATIVE 1033, TO BE PRESENTED TO THE ELECTORATE ON NOVEMBER 3, 2009. WHEREAS, Initiative 1033 will be presented to the voters at the general election on November 32, 2009, with the following ballot title and description: Initiative Measure No. 1033 concerns state, county and city revenue. This measure would limit growth of certain state, county and city revenue to annual inflation and population growth, not including voter approved revenue increases. Revenue collected above the limit would reduce property tax levies. Should this measure be enacted into law? Yes No and WHEREAS, the City Council has determined that Initiative 1033 would severely limit the City's ability to provide basic levels of service, create barriers to future growth and inhibit redevelopment within the City such as fire and police response, street maintenance, and maintenance of the City's p arks and trails; and WHEREAS, the City Council has determined that the resulting decreased levels of service would present serious concerns about the security and welfare of the residents of the City of Tukwila; and WHEREAS, the City Council has determined that Initiative 1033 would create barriers to economic development within the City inhibit redevelopment and be a disincentive to future iob growth; and WHEREAS, Initiative 1033 would permanently the City's budget to recessionary levels from 2009, with minimal future growth, which would limit the City's ability to offer future programs and services to meet the needs of the residents of the City; and WHEREAS, the City Council finds that an expression opposing Initiative 1033 is appropriate; and WHEREAS, in accordance with RCW 42.17.130, the opportunity for public statements and comments was afforded by the City Council; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: The City Council of the City of Tukwila expresses its opposition to Initiative 1033, which will be presented to the electorate on November 3, 2009. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2009. ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney W \Word Processing \Resolutions \Oppose Initiative 1033.doc SH:ksn 9/23/2009 DRAFT Joan Hernandez, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 1 of 1 ESTIMATING IMPACTS OF INITIATIVE 1033 (2009 -2015) Assumptions outlined by the Association of Washington Cities (see more on assumptions below) Updated September 3, 2009 CY 2009 CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 AWC NOTES TUKWILA NOTES IPD (March to March) (Note 1) 0.50% 1.80% 2.00% 1.80% 1.80% 1.70% 1.70% Population Growth Estimate* (Note 2) GF Forecast w /out 1 -1033 (Note 3) 36,075,118 36, 976,996 37,901,421 39,038,4638 40,209,617 41,818,002 Forecasted Growth in GF Revenues* (Note 3) Levy w /out "Lower City Property Tax Account" Transfer* IRMP 12,406,029 12,530,089 12,780,691 13,036,305 13,427,394 13,830,216, Growth in Prop Tax w /out "Lower City Property Tax Account" Transfer Estimated* (Note 4) Estimated Actual GF Revenues w /out Limit (Note 5) 36,075,118 36,075,118 36,976,996 37, 897,403 39,026,798 40,179, 396 41,747,767 Gen Fund Revenue w/ Limit (Note 6) 36, 075,118 36,346,132 36,816,281 37,646,488 38,419,936 39,209,273 39,975,520 Revenue and expenditure projections include assumed gradual increases in revenue and assessed valuations beginning in CY 2014. Projected population increases conservatively estimated at 0.5% per year. Projected increases in property taxes includes increases in assessed valuations due to development, redevelopment, and annexation. GF Revenue forecast for CY 2009 is the adopted budget for applicable revenue items as outlined in OFM Fiscal Note. Inflation estimates for 2016 -2020 assume gradual increase in prices. Lesser of GF Revenue Limit (J) or GF Actuals growing at rate in column F (I) 36,075,118 36,075,118 36,816,281 37,646,488 38,419,936 39,209,273 39,975,520 Increase in Gen Fund Limit or Actual Revenues (Column K) 0.00% 2.05% 2.25% 2.05% 2.05% t95% Amount Over /Under Revenue Limit (I J) 271,014 160,715 250,915 606,862 970,123 1,772,246 Transfer to "Lower City Property Taxes Account" 0 0 1 60,715 250,915 606,862 970,123 Property Tax After "Lower City Property Tax Account" Transfer (Note 7) 12,283,197 12,406,029 12,530,089 12,619,976 12,785,390 12,820,532 12,860,093 (1) IPD estimates for CY 2009 -CY 2011 are from the June 2009 Washington State Economic and revenue Forecast. Inflation estimates for CYs 2012 -15 are from the June 2009 HIS Global Insight forecast (OFM) (2) Population growth estimates provided are based on OFM's forecasted population increases for cities in urban counties; cities should replace with own estimates (3) General fund revenues and revenue growth should reflect current forecasts without 1 -1033 (4) Growth should reflect anticipated councilmanic increases plus increases due to new construction /improvements, annexation, electric generation wind turbine facilities and state assessed property (5) CY 2010 revenue calculated as:(CY 2009 GF REV X GF forecasted growth) CY 2009 GF REV; CY 2011 and subsequent years calculated as ((CY 2010 GF REV transfer to Lower City Property Tax Account) X GF forecasted growth) CY 2010 GF REV; For simplicity the same forecasted growth rate is assumed with or without passage of 1 -1033. (6) CY 2010 revenue limit calculated as: CY 2009 GF REV X (1+ 2009 Change Pop) X (1+ 2009 Change IPD); CY 2011 and subsequent years limit calculated as: CY 2010 GF REV transfer X (1 2010 Change Pop) X (1 2010 Change IPD) (7) Lower City Property Taxes Account is applied to previous year's full levy, reflecting any limit factor increase (plus new construction /improvements, annexation, electric generation wind turbine facilities and state assessed property). Reflects the amount of the levy set for collection in following year ESTIMATING IMPACTS OF INITIATIVE 1033 (2009 -2020) Assumptions outlined by the Association of Washington Cities (see more on assumptions below) Updated September 3, 2009 IPD (March to March) (Note 1) CY 2009 0.50% CY 2010 1.80% CY 2011 2.00% CY 2012 1.80% CY 2013 1.80% CY 2014 1.70% CY 2015 1.70% CY 2016 1.80% CY 2017 1.80% CY 2018 2.00% CY 2019 2.00% CY 2020. 2.50% AWC NOTES TUKWILA NOTES Population Growth Estimate* (Note 2) GF Forecast w /out 1 -1033 (Note 3) 36,075,118' 36,976,996, 37,901,421 39, 038,463 40,209,617 41,818,002 43,490,722;° 45,665,2581 47,948,521 50,825,432 53,874,958 Forecasted Growth in GF Revenues* (Note 3) Levy w /out "Lower City Property Tax Account" Transfer* 12,406,029 12,530,089 12,780,691 13,036,305 13,427,394 13,830,216 14,383,424 14,958,761 15,706,700 16,492,034 17,481, 557 Growth in Prop Tax w /out "Lower City Property Tax Account" Transfer Estimated* (Note 4) Estimated Actual GF Revenues w /out Limit (Note 5) 36, 075,118 36,075,118; 36,976,996] 37,897,403 39,026,798 40,179,396 41, 747,767 43,346,787 45, 384, 625 47,469,515 50,029,152 52,653,036 Gen Fund Revenue w/ Limit (Note 6) 36,075,118 36,346,132 36,816,281 37, 646,488 38,419,936 39,209,273 39,975,520 40,756,742 41,697,815 42,660,618 43,731,399 44, 940, 572 Revenue and expenditure projections include assumed gradual increases in revenue and assessed valuations beginning in CY 2014. Projected population increases conservatively estimated at 0.5% per year. Projected increases in property taxes includes increases in assessed valuations due to development, redevelopment, and annexation. GF Revenue forecast for CY 2009 is the adopted budget for applicable revenue items as outlined in OFM Fiscal Note. Modest population increases beginning in 2016, primarily from development of Tukwila South. Inflation estimates for 2016 -2020 assume gradual increase in prices. Lesser of GF Revenue Limit (J) or GF Actuals growing at rate in column F (I) 36,075,118 36,075,118 36,816,281 37,646,488 38,419,936 39,209,273 39,975,520 40,756,742 41,697,815 42,660,618 43,731,399 44,940,572 increase in Gen Fund Limit or Actual Revenues (Column K) 0.00% 2.05% 2.25% 2.05% 2.05% 1.95% 1.95% 2.31% 2.31% 2.51% 2.77% Amount Over /Under Revenue Limit (I J) 271,014 160,715 250,915 606,862 970,123 1,772,246 2,590,045 3,686,809 4,808,898 6,297,753 7,712,464 Transfer to "Lower City Property Taxes Account" 0 0 160,715 250,915 606,862 970,123 1,772,246 2,590,045 3,686,809 4,808,898 6,297,753 Property Tax After "Lower City Property Tax Account" Transfer (Note 7) 12,283,197 12,406, 029 12,530,089 12,619,976 12,785,390 12,820,532 12,860,093 12,611,178 12,368,716 12,019,890 11,683,137 11,183,803 (1) IPD estimates for CY 2009 -CY 2011 are from the June 2009 Washington State Economic and revenue Forecast. Inflation estimates for CYs 2012 -15 are from the June 2009 HIS Global Insight forecast (OFM) (2) Population growth estimates provided are based on OFM's forecasted population increases for cities in urban counties; cities should reolace with own estimates (3) General fund revenues and revenue growth should reflect current forecasts without 1 -1033 (4) Growth should reflect anticipated councilmanic increases plus increases due to new construction /improvements, annexation, electric generation wind turbine facilities and state assessed property (5) CY 2010 revenue calculated as:(CY 2009 GF REV X GF forecasted growth) CY 2009 GF REV; CY 2011 and subsequent years calculated as ((CY 2010 GF REV transfer to Lower City Property Tax Account) X GF forecasted growth) CY 2010 GF REV; For simplici (6) CY 2010 revenue limit calculated as: CY 2009 GF REV X (1+ 2009 Change Pop) X (1+ 2009 Change IPD); CY 2011 and subsequent years limit calculated as: CY 2010 GF REV transfer X (1 2010 Change Pop) X (1 2010 Change IPD) (7) Lower City Property Taxes Account is applied to previous year's full levy, reflecting any limit factor increase (plus new construction /improvements, annexation, electric generation wind turbine facilities and state assessed property). Reflects the amount of the levy set for collection in following year FINANCE AND SAFETY COMMITTEE Meeting Minutes September 22, 2009 5:00 p.m.; Conference Room #3 PRESENT Councilmembers: Pam Linder, Chair; Joe Duffle and De' Sean Quinn Staff: Shawn Hunstock, Bob Giberson, and Kimberly Matej Guests: Jeremy Eide CALL TO ORDER: Chair Linder called the meeting to order at 5:00 p.m. I. PRESENTATIONS No presentations. City of Tukwila Finance and Safety Committee II. BUSINESS AGENDA A. Seattle Southside Visitor Center Lease This item has been removed from the Committee Agenda, per agreement of the full Council at the Regular Council meeting on September 21, 2009. Since the Seattle Southside Visitor Center Lease is currently in draft form and changes at the staff level are anticipated, Council felt it would be more efficient to review the item once staff has made final changes. Due to time constraints, this item will move directly to the next scheduled COW on September 28, 2009 instead of returning to Committee on October 6. FORWARD TO SEPTEMBER 28 COW FOR DISCUSSION. B. Resolution Ordering the Cancellation of Outstanding. General Fund Claims and Payroll Checks, Municipal Court Checks and Foster Golf Gift Cards Staff is seeking approval of an annual resolution writing -off unredeemed and outstanding items which will be reported to the Washington State Department of Revenue by November 1, 2009. This year's cancellations total $4,602.33. All cancellations will be remitted to the Washington State Department of Revenue Unclaimed Property Section. UNANIMOUS APPROVAL. FORWARD TO SEPTEMBER 28 COW. C. Resolution Onposina Initiative 1033 At the request of the City Council, staff is bringing forward a resolution which opposes Initiative 1033 (I- 1033). Initiative 1033 is scheduled to be on the November 3 General Election ballot. If approved, I -1033 would limit the growth of state, county and city revenue to the annual inflation and population growth. Committee members suggested adding additional language to the resolution that would strengthen the understanding of the initiative's impact on the City, including identifying basic levels of service (i.e.: fire and police) and recession concerns. The Committee discussed possible ways of notifying voters of the importance of opposing this initiative. Shawn Hunstock, Finance Director, will follow -up with the City Attorney to address some of these suggestions and will report out at the September 28 COW. UNANIMOUS APPROVAL. FORWARD TO SEPTEMBER 28 COW. D. Ordinance and Policy Regarding Utility Leak Adiustments Staff is seeking full Council approval of a policy, and subsequent approval of an ordinance, that will provide utility customers with occasional fiscal relief on their water and/or sewer bill due to high consumption as a result of a water leak.