HomeMy WebLinkAboutCOW 2014-11-24 Item 4I - Ordinance - Sunset Provision Extension on Interfund Utility TaxCOUNCIL AGENDA SYNOPSIS
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11/24/14
12/01/14
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E Bid Award
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E Public Hewing
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SPONSOR E Council C Mayor E HR E DCD 11 Finance J Fire E IT E PR Pohce 1 V
SPONSOR'S The City currently assesses a 10% tax rate on the revenues of City operated facilities. The
SUMMARY tax is set to end Dec. 31, 2015. Staff is recommending a 6-year extension to the existing
utility tax on City operated utilities.
RFV1Ew1:D BY I: COW Mtg. E CA&P Cmte Z F&S Cinte E Transportation Cmte
E Utilities Cmte 1 Arts Comm. E Parks Comm. E Planning Comm.
DATE: 11/18/2014 COMMITTEE CHAIR: SEAL
ITEM INFORMATION
ITEM No.
4.1.
189
STAFF SPONSOR: PEGGY MCCARTHY
ORIGINAL AGENDA DATI.: 11/24/14
AGENDA ITUM TFITU
Interfund Utility Tax Extension
11/24/14
E Motion
Mtg Date
E Resolution
AI Is Dale
E Bid Award
ilits Date
E Public Hewing
Alts Date
E Other
Mtg Date
(2,\TI(;01tY n Di:ccussion
II Ordinance
Mtg Date
Alt Date 12/01/14
SPONSOR E Council C Mayor E HR E DCD 11 Finance J Fire E IT E PR Pohce 1 V
SPONSOR'S The City currently assesses a 10% tax rate on the revenues of City operated facilities. The
SUMMARY tax is set to end Dec. 31, 2015. Staff is recommending a 6-year extension to the existing
utility tax on City operated utilities.
RFV1Ew1:D BY I: COW Mtg. E CA&P Cmte Z F&S Cinte E Transportation Cmte
E Utilities Cmte 1 Arts Comm. E Parks Comm. E Planning Comm.
DATE: 11/18/2014 COMMITTEE CHAIR: SEAL
RECOMMENDATIONS:
SPoNsoR/ADMIN.
CommrITHE
Finance
Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
EXPUNDITL. RE, RUQUIRUD AMOUNT BUDGETED APPROPRIATION REQUIRED
$ $ $
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
11/24/14
MTG. DATE
ATTACHMENTS
11/24/14
Informational Memorandum dated 11/4/2014
Ordinance in Draft Form
Minutes from the Finance and Safety Committee meeting of 11/18/14
12/01/14
189
190
TO:
FROM:
BY:
DATE:
SUBJECT:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
Peggy McCarthy, Finance Director
Jennifer Ferrer-Santa Ines, Senior Fiscal Coordinator
November 4, 2014
interfund Utility Tax extension
ISSUE
Approve a 6-year extension to the existing utility tax on City operated utilities.
BACKGROUND
The City currently assesses a 10% tax rate on the revenues of the City operated utilities. The
tax is set to end December 31, 2015.
The City Council passed Ordinance No. 2258 on October 19, 2009 adopting a utility tax on City
operated water, sewer, and surface water utilities. The Ordinance provided for a rate of 15% of
gross revenue from the utility funds until April 30, 2010, then 10% effective May 1, 2010 through
December 31, 2012.
It was amended by Ordinance No. 2298 on July 19, 2010 to extend the sunset provision from
May 1, 2010 through December 31, 2015. This decision was part of the revenue enhancement
options considered in preparation of the 2011-2012 biennial budget.
DISCUSSION
Extending the sunset provision through the end of 2015 was part of a three-pronged approach
in the last biennium to address declining revenues, particularly in sales tax, and increasing
expenses outside of the City's control including pension plan contributions and contractual
increases. Last year, the City recognized nearly $1.7 million of interfund utility tax receipts.
Below shows the amount recognized each year in the general fund for interfund utility taxes.
Water
Sewer
Surface Water
Total
2009
676,241
754,017
383,019
1,813,277 $
2010 2011
501,592 475,210
618,096 561,831
378,094 335,339
1,497,782 $1,372,380
2012
518,461
647,043
369,077
1,534,581
Year to Date
2013 2014
561,931 473,799
736,739 623,816
388,189 424,036
1,686,859 $ 1,521,651
The decision to not extend the sunset provision would require other measures, which could
include budget reductions or review or alternative revenue sources.
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INFORMATIONAL MEMO
Page 2
FINANCIAL IMPACT
The general fund has received $1.5 million of interfund utility taxes year to date through
September 30, 2014.
RECOMMENDATION
The Finance and Safety Committee is being asked to approve a 6-year extension of the utility
tax for City operated utilities and consider this item at the November 24, 2014 Committee of the
Whole meeting and subsequent December 1, 2014 Regular Meeting.
ATTACHMENTS
Draft Ordinance
W:12014 F&S\Utilty Tax Extensionl .doc
192
RAFT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUKWILA, WASHINGTON; AMENDING ORDINANCE
NOS. 2298 §1 (PART) AND 2258 §3, AS CODIFIED AT
TUKWILA MUNICIPAL CODE SECTION 3.54.030,
EXTENDING THE CITY UTILITY TAX SUNSET
PROVISION; PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, at the time Ordinance No. 2298 was passed, the City Council wished to
extend the sunset provision for the collection of City utility taxes to December 31, 2015;
and
WHEREAS, the City Council and Mayor have reviewed the current General Fund
status and operating budget and determined that it is in the best interest of the citizens
of Tukwila to extend the current sunset provision to 2021;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 3.54.030 Amended. Ordinance Nos. 2298 §1 (part) and
2258 §3, as codified at Tukwila Municipal Code Section 3.54.030, are hereby amended
as follows:
3.54.030 Tax Rate
A. There is levied upon water, sewer and surface water utilities, taxes in the
amount to be determined by the application of rates given against gross earnings as
follows:
1. Upon the City water, sewer and surface water funds, a tax equal to 15% of
the total gross revenue from such business from all customers in the City during the
period for which the tax is due. Such tax shall be effective from December 31, 2008
through April 30, 2010.
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2. Upon the City water, sewer and surface water funds, a tax equal to 10% of
the total gross revenue from such business from all customers in the City during the
period for which the tax is due. Such tax shall be effective from May 1, 2010 through
December 31, 202145.
Section 2. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section /subsection numbering.
Section 3. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 4. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force five days
after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel Turpin, City Attorney
Jim Haggerton, Mayor
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Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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Finance & Safety Committee Minutes November 18, 2014 - Page 2
D. Ordinance: Sunset Provision Extension on Interfund Utility Tax
Staff is seeking Council approval of an ordinance that would extend the sunset provision for the
collection of City utility taxes to December 31, 2021. Currently a 10% tax is assessed on the
revenues of City- operated utilities which is set to end on December 31, 2015. In 2013 the City
recognized nearly $1.7 million of interfund utility tax receipt, and as of September 302, 2014 the
general fund has received $1.5 million. If the sunset provision is not extended the City will have
to consider budget reductions or alternate revenue sources beginning in 2016. UNANIMOUS
APPROVAL. FORWARD TO NOVEMBER 24, 2014 COMMITTEE OF THE WHOLE.
E. Ordinance: Tow Truck Licensing
Staff is seeking Council approval of an ordinance to repeal Tukwila Municipal Code Chapter
5.44, "Tow Truck Businesses" in its entirety. Because tow truck businesses are regulated by the
Department of Licensing and trucks are inspected by the Washington State Patrol, staff is
recommending that an additional City inspection and licensing process is not needed. In 2014
to date the City has licensed 40 trucks totaling $1,000 in revenue, and in 2013, 39 trucks totaling
$975. This revenue does not cover the staff time associated with the inspections so there is no
significant financial impact from this proposal. Other City business licensing requirements will
continue to apply. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 24, 2014
COMMITTEE OF THE WHOLE.
F. Police Department Quarterly Report
Chief Villa updated the Committee on items of significance that occurred in the Police
Department during the third quarter of 2014. The information included highlights, staffing
information, crime statistics and crime reduction strategies. A map of residential burglary
locations was distributed to the Committee.
G. Resolution: Wages and Benefits for Non - Represented Employees
Staff is seeking Council approval of a resolution that would provide a 2% cost of living
adjustment (COLA) to all non - represented employees effective January 1, 2015. Resolution No.
1796 provides that in odd - numbered years a COLA based upon 90% of the Seattle- Tacoma-
Bremerton Consumer Price Index (CPI -W) Average (June to June) be applied to the non -
represented employee pay schedule. The CPI -W June is 2.2 %, 90% of which is 1.98 %.
Because non - represented employee wages have lagged behind those of represented
employees, staff recommends a 2.0% increase to mitigate effects such as salary compression.
The proposed resolution will also approve a Summary of Benefits and a Longevity Pay Plan in
addition to the Salary Schedule. No changes are being proposed to either of those from previous
years. Staff distributed an updated Attachment A that included two positions inadvertently
omitted, and an updated Attachment B that corrects the title of the Deputy Police Chief. The
Committee requested the previous Salary Schedule be included in the packet for Committee of
the Whole discussion. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 24, 2014
COMMITTEE OF THE WHOLE.
III. MISCELLANEOUS
Meeting adjourned at 6:37 p.m.
Next meeting: Tuesday, December 2, 2014 - 5:30 p.m. - Hazelnut Conference Room
Minu 6s by LH
Gommittee Chair Approval
195