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Home My WebLink AboutSpecial 2015-11-10 COMPLETE AGENDA PACKET��,� ►�a �qs 041 of Tukwila 6200 Southcenter Boulevard 9 Tukwila, Washington 98188 Jim Haggerton, Mayof- x Boa Tukwila City Council Workshop: Revenue Considerations for Fire Service Decision November 10, 2015 5:30 — 7:30 Tukwila Council Chambers Welcome and workshop overview II. Exercise III. Facilitated discussion IV. Next steps and close Attachment: Memorandum DWIr 111 1117i 1 r 1111 6200 Southcent r , out v rd ukLi l , [Vashington 98188 fihi Haggerton, Mayor To: Tukwila City Councilmembers From: Moira Bradshaw and Rachel Bianchi Date: November 6, 2015 Subject: Preparation for Council Workshop: Revenue Considerations for Fire Service Decision Issue If the Council determines that it wants to forward the RFA option to Tukwila voters, it will need to determine what it wants to do with additional property tax capacity that will be retained by the City, should the RFA be approved by the voters. The Council has the option to: • Retain no additional property tax beyond what is needed to fund the existing level of City services (without the Fire Department) • Retain a portion of the property tax to fund additional City services • Retain the entire property tax capacity to fund additional City services Background The Council has expressed a desire to deliberate potential scenarios that may be associated with annexation into the RFA. The workshop scheduled for November 10 is that opportunity. We appreciate the Council's clear commitment to ensuring transparency in this process. Ultimately, should the Council forward the RFA to the ballot, voters will want to know what will happen with the City property tax capacity created by annexation into the RFA. This workshop is not to discuss the merits of actual annexation into the RFA. That discussion will come at a subsequent meeting after the RFA Steering Committee completes their process. Discussion This workshop will include an interactive exercise to determine potential priorities for the City Council as it evaluates additional opportunities that may be available with annexation into the Kent RFA. Included in the scenarios is the option of city property debt that would pay for capital related to fire service (including facilities, apparatus and other equipment,) so that the Council sees an apples -to- apples comparison across the different options. Five Scenarios The following examples will be discussed at the workshop. They show the potential tax impact on six different "typical" tax payers and five different City service - related scenarios: • No annexation to the RFA, dedicated City levy to fund fire capital needs and no enhanced services • Annexation to the RFA, minimum amount of property tax retained and no enhanced services • Annexation to the RFA, low amount of property tax retained, $2,000,000 in enhanced services • Annexation to the RFA, medium amount of property tax retained, $4,000,000 in enhanced services • Annexation to the RFA, maximum amount of property tax retained, $6,000,000 in enhanced services The attachment to this memo shows the property tax impact on property owners of the five scenarios described above. Each of the examples on the attachment are specific properties in Tukwila with the specific amount of taxes and fees that would be leveled based on the different scenarios. It is important to point out that, because there are a variety factors that go into the Fire Benefit Charge, the cost of the RFA will not be the same for every property in Tukwila that has the same assessed value as the examples attached. In fact, the cost is greatly affected by square footage and, for commercial properties in particular, specific attributes that may make fire suppression more difficult such as storage of hazardous materials, etc. In order to inform the discussion as to what additional priorities the Council may desire to fund, staff created a list of potential priorities that the Council may want to fund, and have assigned them a dollar amount for the purposes of this exercise. The amounts were rounded up to easy to add figures and include necessary related funding, such as equipment for a police officer. At the workshop, Councilmembers will be able to identify additional priorities and staff will be there to assist identifying a ball park cost associated with the new ideas. If Councibneinbers have additional ideas in advance of the workshop that they would like included on the list, please reach out to Rachel Bianchi with the list of other priorities. Sample City funding priorities Staff developed the following list after reviewing the CIP, other unfunded capital needs, as well as service enhancements brought forward in various forums from both Council and the public. • 1 new code enforcement officer: $150,000 (includes SWB and equipment) • 1 new police officer: $200,000 (includes SWB & necessary equipment costs) • Tukwila South Trail: $300,000 (20 year debt service on bonds) • Duwamish Hill Preserve Phase 3: $800,000 (20 year debt service on bond) • Tukwila Pond: $800,000 (20 year debt service on bond) • Residential street improvements: $800,000 per mile — top shelf street improvements to include undergrounding, curbs, gutters, sidewalks, bike lanes, new stormwater treatment facilities. (20 year debt service on bonds) (1 mile = S. 1541h — S. 1371h Street) • Public works campus only: $1,000,000 (assumes enterprise funds covers half the cost) - (20 year debt service on bonds) • Criminal justice facility only: $2,000,000 (20 year debt service on bonds) • City Hall campus only: $2,000,000 (20 year debt service on bonds) • New BNSF access bridge: $2,000,000 (20 year debt service on bonds) • Strander extension: $2,000,000 (20 year debt service on bonds) • Fully fund facilities (listed individually above): $5,000,000 Other priorities (to be filled out by Councilmembers either prior to the workshop or at the meeting). Page 2 of 3 At the workshop, Councilmembers will have the opportunity to identify their individual priorities given a $2 million budget, a $4 million budget and a $6 million budget. Each Councilmember will have the opportunity to "spend" up to the limit for the various scenarios described above. After this exercise, Councilmembers will be asked to discuss — in general terms — which scenarios make the most sense for the majority of the Council. The point of this exercise is to not focus on the policy decision of the RFA as much as the associated policy decisions, which include what (if anything) the Council would like to do with any property tax authority retained by the City. Recommendation The goal of the workshop is for the Council and the staff to better understand the Council's direction with respect to spending priorities and property tax impacts inherent in the RFA decision. This direction will be used by staff in developing a targeted and refined proposal for the Council to consider that will complement the decision - making on the RFA. City staff will collect all of the information and provide Council with results of the workshop so that when it does deliberate in more detail on the RFA, there will be a summary of the priorities and scenario discussions for consideration at that time. In addition, this information will be critical when conducting public outreach regarding any potential recommendation. If Councilmembers have questions in advance of the workshop, please do not hesitate to reach out to either one of us. Attachment: Scenarios and Impacts to Property Owners Page 3 of 3 REVENUE CONSIDERATIONS FOR FIRE SERVICE DECISION: SCENARIOS AND IMPACTS TO PROPERTY OWNERS All of these scenarios are based on specific properties in Tukwila, the associated existing property taxes and the actual cost of the RFA assessment as determined by the Kent RFA. The assessment for the RFA varies depending on a number of factors, including square footage, fire- suppression logistics and others. As such, the assessment will vary depending on these factors, and the examples here may not be the same for other properties in Tukwila with the same assessed values. - - - - ASSESSED VALUATION EXAMPLES - - - - HO M [OWNER _ M PACTS :__> 30 Oi CURRENT CITY PROPERTY TAX ($2.84/$1,000) $ 426 $ 710 $ 853 CITY FIRE CAPITAL LEVY 70 117 140 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 496 827 993 ASSESSED VALUATION EXAMPLES COMM=RC A= PROPERTY IMPA `, :__> CURRENT CITY PROPERTY TAX ($2.84/$1,000) $ 2,858 $ 14,125 $ 28,623 CITY FIRE CAPITAL LEVY 470 2,327 4,715 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 3,328 $ 16.452 $ 33,338 - - - - ASSESSED VALUATION EXAMPLES - - - - HOMEOWNER IMPACTS _ 00,000 ii CITY PROPERTY TAX ($0.97/$1,000) $ 146 $ 243 $ 291 KENT RFA ASSESSMENT 380 567 963 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 526 $ 810 $ 1,254 - - - - ASSESSED VALUATION EXAMPLES - - - - O EOWNER _ FACTS _ t 00,000 ii CITY PROPERTY TAX ($1.37/$1,000) $ 206 $ 343 $ 411 KENT RFA ASSESSMENT 380 567 963 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 586 $ 910 5 1,374 ASSESSED VALUATION EXAMPLES CO E °Ai PROPERTY IF RACTS _ I O OO CITY PROPERTY TAX ($0.97/$1,000) $ 976 $ 4,826 $ 9,780 KENT RFA ASSESSMENT 3,001 10,687 23,816 TOTAL ANN_ UAL COST TO PROPERTY OWNERS $ 3,977 $ 1 , 13 $ 33,596 ASSESSED VALUATION EXAMPLES COMMERCIAL PROPERTY IMPACTS _ .`' CITY PROPERTY TAX ($1.37/$1,000) $ 1,379 $ 6,814 $ 13,809 KENT RFA ASSESSMENT 3,001 10,687 23,816 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 4,380 $ 17,501 5 37,625 - - - - ASSESSED VALUATION EXAMPLES - - - - HOMEOWNER .MFAC S 4,_ f log OOO $3AOO ii CITY PROPERTY TAX ($1.77/$1,000) $ 266 $ 443 $ 531 KENT RFA ASSESSMENT 380 567 963 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 646 5 1,010 $ 1,494 ASSESSED VALUATION EXAMPLES COMv3M=RC A= PROPERTY .Mv3PACTS 4,_ f log OOO CITY PROPERTY TAX ($1.77/$1,000) $ 1,781 $ 8,802 $ 17,837 KENT RFA ASSESSMENT 3,001 10,687 23,816 TOTAL ANNUAL COST TO PROPERTY OWNERS $ 4,782 $ 19.489 5 41,653 imumm - - - - ASSESSED VALUATION EXAMPLES - - - - HOMEOWNER IMPACTS 4,_ 000,000_ CITY PROPERTY TAX ($2.325/$1,000) $ 2,338 CITY PROPERTY TAX ($2.325/$1,000) $ 349 $ 581 $ 698 KENT RFA ASSESSMENT 380 567 963 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 729 1,148 1,661 ASSESSED VALUATION EXAMPLES COMMERCIAL PROPERTY IMPACTS 000,000_ CITY PROPERTY TAX ($2.325/$1,000) $ 2,338 $ 11,556 $ 23,417 KENT RFA ASSESSMENT 3,001 10,687 23,816 TOTAL ANNUAL COST TO PROPERTY OWNERS 5 5,339 5 22,243 5 47,233