HomeMy WebLinkAboutReg 2024-04-15 Item 7C - Handout Distributed at Meeting - Budget ResourcesMunicipal Budgeting
For elected officials
(and other leaders in the process)
Mike Bailey, Finance Consultant
Effective Fiscal Planning: Roles and Responsibilities
•Some terminology
•Fund accounting
•Requirements for municipal budgets
•Key elements of budget best practices
(aka: budget policies)
•Getting the most from your budget process
Introduction to Goal Setting for Upcoming Budget
Agenda
A Budget Construct
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Policy Role
(what, how much & ground rules)
Operations Role
(how, when & with what / who)
Finance Role
(which resources)
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GFOA’s Budget Peer Review Program Framework
GFOA –Government Finance Officers Association
Roles of the Budget Makers
•Policy makers (council) –make policy!
•Provide policy guidance at the beginning
•Confirms budget meets direction by adoption
•Monitors for conformity and results
•CEO/CAO (Mayors, city managers) –
•Propose policy at the beginning
•Develops organization strategy to implement policy
•Departments
•Develop operational strategy
•Provide service (departments can be passionate about this!)
•Accountable for “day-to-day”
•Public –“stakeholders”
•Observes results and “counsels” policy makers
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Roles (and related tools)
Community
(media / outreach efforts)
Policy / Accountability
(briefings, reports, questions)
Organizational Management
(briefings, reports, high level data)
Functional Area Management
(reports, mid-level data)
Program Management
(line item level data, transactions)
Residents, business,
investors
Council /
Commission
Mayor / Manager
Chief Executive Officer
Department
Directors
Managers /
Supervisors
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“Reporting Pyramid”
•BARS –Budgeting, Accounting &
Reporting System (WA)
•GAAP –Generally Accepted
Accounting Principles
•Cash Basis aka: OCBOA –Other
Comprehensive Basis of
Accounting
•There is a “BARS Manual” for
both GAAP and Cash
Government Accounting Terms and
Acronyms
Budgeting, Accounting and Reporting System
Legal authority (RCW 43.09.200):
•The state auditor shall formulate, prescribe, and
install a system of accounting and reporting for
all local governments, which shall be uniform for
every public institution, and every public office,
and every public account of the same class
•Provides a common chart of accounts for local
government comparative statistics (LGFRS)
“BARS” –What is it?
CITY OF TUKWILA
FINANCIAL
OVERVIEW
April 2024
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TABLE OF CONTENTS
I. CITY FUNDS
A. FUND DEFINITIONS (Page 24 of 2023-2024 Budget)
B. FUND TYPES (Page 466 of 2023-2024 Budget)
1. General Fund
2. Special Revenue Funds
3. Debt Service Funds
4. Capital Project Funds
5. Enterprise Funds
6. Internal Service Funds
7. Fiduciary Funds
8. Agency Funds
C. FIGURE 1: FUND TYPES
II. POLICIES
A. FINANCIAL POLICIES (Resolution 2014, Page 440 of 2023-2024 Budget)
1. Purpose
2. Budgeting
3. Revenues
4. Expenditures
5. Grants
6. Capital Improvement Program
7. Enterprise Funds
8. Debt
9. Reserves
10. Investments
11. Minimum Reporting Requirements
B. DEBT POLICY (Resolution 1840, Page 447 of 2023-2024 Budget)
1. Purpose, Type and Use of Debt
2. Responsibilities
3. Method of Sale of Bonds
4. Refunding Bonds or Notes
5. Structural Elements
6. Credit Objective
7. Use of Professionals & Other Service Providers
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8. Post-Issuance Compliance Procedures
C. PURCHASING POLICY (Resolution 2015)
1. Procurement Policy Table
2. Administration
3. Determining Total Cost
4. Vendor Relations
5. Grants & Federal Funding
6. Controlled Commodities
7. Types of Projects & Contract Approval Levels
8. Threshold Cost Negotiation Requirements
9. Public Works Projects
10. Competitive Bidding Process
11. Service Categories
12. Materials, Supplies & Equipment
13. Exceptions to the Competitive Process
14. Disposal of Surplus Property
15. Additional Considerations
16. References
17. Glossary
III. BOND RATING
A. RATING OVERVIEW
B. RATING SCALE
C. CRITERIA USED BY RATING AGENCIES
D. DEBT SERVICE SUMMARY
E. DEBT CAPACITY
IV. PRIORITY BASED BUDGETING
A. WHAT IS PRIORITY BASED BUDGETING (PBB)
1. Priority Based Budgeting Process
2. Chart – General Fund Program Allocation by Tier
3. Chart – Program Allocations by Department
B. HOW WILL PBB BE USED IN THE 2025-2026 BUDGET PROCESS
1. Program Alignment and Categorization
2. Program List by Category
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CITY FUNDS
FUND DEFINITIONS
The City of Tukwila’s accounting and budget structure is based upon governmental fund accounting to
ensure legal compliance and financial management for various restricted revenues and program
expenditures. Fund accounting segregates certain functions and activities into separate self-balancing
funds created and maintained for specific purposes (as described below). Resources from one fund used
to offset expenditures in a different fund are budgeted as either a ‘transfer to’ or ‘transfer from’.
The City of Tukwila budget is organized in a hierarchy of levels, each of which is defined below:
Fund A fund is an accounting entity used to record the revenues and expenditures of a
governmental unit which is designated for the purpose of carrying out specific activities or
attaining certain objectives. For example, Fund 104, the Arterial Street Fund, is designated
for the purpose of maintaining the arterial streets within the City.
Department A department designates a major function of City operations, e.g., Public Works or Parks
and Recreation.
Program A specific distinguishable line of work performed by the department, or departments, for
the purpose of accomplishing a function for which government is responsible. For
example, “Traffic Control” is included within the Street Funds.
Object The appropriation unit (object of expenditure or expense) is the level of detail used in the
budget to sort and summarize objects of expenditure, or expense, according to the type
of goods or services being purchased, e.g., salaries, supplies.
FUND TYPES
General Fund: used to account for and report all financial resources not accounted for and
reported in another fund.
The General Fund supports the general operations of the City government. These include administration,
the legislative function, legal services, public safety, planning and community development, enforcement
of local codes, parks, recreation, and cultural activities. Taxes are the principal source of revenue for the
General Fund: property, sales, utility, and gambling taxes. Other important resources are shared revenue
from other governments, licenses and permits, charges for services, and fines and forfeitures.
The Contingency, or Reserve Fund, is an accumulation of fund balance that is greater than 10% of
previous year General Fund revenue, exclusive of significant non-operating revenue. Amounts held in
this fund can be used for more restrictive, emergency-type purposes. This fund is a sub-fund of the
general fund.
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Special Revenue Funds: used to account for and report the proceeds of specific revenue
sources that are restricted or committed to expenditure for a specific purpose other than debt
service or capital projects.
These funds receive revenue from a variety of sources, including Federal and State grants, taxes, and
service fees. These revenues are dedicated to carrying out the purposes of the individual special revenue
fund.
Special Revenue
Fund # Name
101 Lodging Tax
109 Drug Seizure
Debt Service Funds: used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for principal and interest for governmental debt issues.
Debt limits are based on percentages of assessed valuation, with voted debt requiring a 60% majority of
the city electorate.
Debt Service
Fund #Name
2XX Various Debt Service
Capital Project Funds: used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays including the acquisition or construction
of capital facilities or other capital assets.
Revenues for capital funds consist of federal and state grants, contributions from operating funds and
bond proceeds. These revenues are usually dedicated to capital purposes and are not available to
support operating costs. Capital projects are adopted on a multi-year basis.
Capital Project
Fund #Name
103 Residential Street
104 Bridges and Arterial Streets
301 Land Acquisition, Rec. and Prk Dev.
302 Urban Renewal
303 General Government Improvement
304 Fire Improvement
305 Public Safety Plan
306 City Facilities
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Enterprise Funds: used to report any activity for which a fee is charged to external users for
goods or services. Enterprise funds are required for any activity whose principal revenue
sources meet any of the following criteria:
Debt backed solely by the pledge of the net revenues from fees and charges
Legal requirement to recover cost
Policy decision to recover cost
Internal Service Funds: used to report any activity that provides goods or services to other
funds or departments of the government on a cost-reimbursement basis.
Fiduciary Funds: used to account for assets held by a government in a trustee capacity or as
an agent for individuals.
Agency Funds: used to report resources held by the government in a purely custodial capacity
(assets and liabilities).
Enterprise
Fund #Name
401 Water
402 Sewer
411 Golf Course
412 Surface Water
Internal Service
Fund #Name
501 Equipment Rental and Replacement
502 Self Insured Healthcare Plan
503 LEOFF I Retiree Self-Insured Healthcare Plan
Fiduciary
Fund #Name
611 Firemen's Pension
Fiduciary
Fund #Name
640 Agency Fund
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POLICIES
FINANCIAL POLICIES
The City’s Financial Policies are intended to serve as a Council-approved set of values and expectations
for Council Members, City staff, citizens and other interested parties who may do business with the City.
The use of the term “City” refers to all City officials and staff who are responsible for the activities to carry
out these policies. The policies describe expectations for financial planning, budgeting, accounting,
reporting and other management practices. They have been prepared to ensure prudent financial
management and responsible stewardship of the City’s financial and physical resources. The policies
are reviewed on a biennial basis and updated as needed. The latest revision of the financial policies was
adopted December 2020 via Resolution 2014.
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DEBT POLICY
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CITY OF TUKWILA DEBT POLICY
A debt policy and appropriate management of debt issued by the City of Tukwila (the "City") is an
important factor in measuring its financial performance and condition. Proper use and management
of borrowing can yield significant advantages. From a policy perspective, the City uses debt as a
mechanism to equalize the costs of needed improvements to both present and future citizens.
SECTION 1. PURPOSE, TYPE AND USE OF DEBT
In the issuance and management of debt, the City shall comply with the Washington State
constitution and with all other applicable legal requirements imposed by federal, state and local
laws, rules and regulations. Approval from the City Council (the "Council") is required prior to the
issuance of all debt. Long-term debt will only be used for improvements that cannot be financed
from current revenues or to fulfill the purposes set forth in the first paragraph of this Debt Policy
(the "Policy").
Long-term debt will only be issued after reviewing the impact on the Six Year Financial Planning
Model and its policy guidelines. When both tax exempt and taxable debt is under consideration,
priority will be given to issuing the tax-exempt debt, unless otherwise justified.
Limited Tax General Obligation (LTGO) Bonds. The City is authorized to sell LTGO bonds
under RCW 39.36.020, subject to the approval of the Council. LTGO bonds will be issued only
if: (1) a project requires funding not available from alternative sources; (2) the project has a useful
life longer than five years, and the Council determines it is appropriate to spread the cost over that
useful life, to achieve intergenerational equity, so those benefiting will also be the ones paying;
(3) matching money is available which may be lost if not applied for in a timely manner; or
(4) emergency conditions exist as determined by the Council. LTGO (non-voted) debt of the
City shall not exceed an aggregate total of 1.5 percent of the City's assessed value of taxable
property within the City.
Unlimited Tax General Obligation (UTGO) Bonds. The City is authorized to sell UTGO
bonds under RCW 39.36.020, subject to the approval of the Council, and subject to voter
approval. UTGO debt will be used for capital purposes when the use of an excess tax levy is
necessary for debt service payments. No combination of UTGO (voter approved) debt and LTGO
debt of the City shall exceed an aggregate total of: (a) 2.5 percent of the City's assessed value
of the taxable property within the City for general purposes; (b) 2.5 percent of the City's assessed
value of the taxable property within the City for parks, open spaces and capital facilities
associated with economic development; and (c) 2.5 percent of the City's assessed value of the
taxable property within the City for utility purposes.
Revenue Bonds. The City is authorized to sell revenue bonds under RCW 35.41.030, subject
to the approval of the Council. Revenue bonds will be issued to finance the acquisition,
construction or improvements to facilities of enterprise systems operated by the City, in
accordance with a system and plan of improvements. The enterprise system must be legally
authorized for operation by the City. There are no legal limits to the amount of revenue bonds
the City can issue, but the City will not incur revenue obligations without first ensuring the
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ability of an enterprise system to meet all pledges and covenants customarily required by
investors in such obligations during the term of the obligation.
Local Improvement District Bonds. The City is authorized to sell local improvement district
(special assessment) bonds ("LID bonds") under RCW 35.45.010, subject to the approval of the
Council. LID bonds are issued to finance projects that will provide special benefit to certain
property owners. The specially benefiting property owners are levied an assessment, based
upon a formula developed to fairly reflect the benefit received by each property owner in the
local improvement district. After consideration and review, the City may form local improvement
districts upon petition of benefiting property owner(s), unless the Council determines to establish
such districts by resolution, pursuant to statutory authority. LIDs for utility improvements may be
authorized as ULIDs, which may be financed through issuance of Revenue Bonds.
Lease Purchase Financing. Lease purchase financing may be used when the cost of borrowing
or other factors make it in the City’s best interest.
Short-Term Debt. The City is authorized to incur short-term debt under chapter 39.50 RCW,
subject to the approval of the Council. Short-term debt may be issued to meet: (1) the immediate
financing needs of a project for which long-term financing has been identified and is likely or
secured but not yet received; or (2) cash flow needs within authorized budgets and anticipated
receipts for the budget year.
The Finance Director is authorized to make loans from one City fund to another City fund for periods
not exceeding twelve months. The Finance Director or designee is required to assure that the loaning
fund will have adequate cash balances to continue to meet current expenses after the loan is made
and until repayment from the receiving fund. All interfund short-term borrowing will bear interest
based upon prevailing Local Government Investment Pool rates.
SECTION 2 . RESPONSIBILITIES
The primary responsibility for debt management rests with the City’s Finance Director.
The Finance Director shall (or shall cause the following to occur):
• Provide for the issuance of debt at the lowest cost and risk;
• Determine the available debt capacity;
• Provide for the issuance of debt at appropriate intervals and in reasonable amounts as
required to fund approved projects;
• Recommend to the Council the manner of sale of debt;
• Monitor opportunities to refund debt and recommend such refunding as appropriate;
• Comply with all Internal Revenue Service (IRS), Securities and Exchange Commission
(SEC) and Municipal Securities Rulemaking Board (MSRB) rules and regulations
governing the issuance of debt pursuant to the City’s Post Issuance Compliance Policy;
• Provide information for and participate in the preparation and review of bond offering or
disclosure documents;
• Comply with all terms, conditions and disclosures required by Ordinances governing the
debt issued;
• Submit to the Council all recommendations to issue debt;
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• Distribute to appropriate repositories, such as the EMMA repository managed by the
Municipal Securities Rulemaking Board, information regarding financial condition and
affairs at such times and in the form required by contract, regulation and general
practice, including Rule 15c2-12 regarding continuing disclosure;
• Provide for the distribution of pertinent information to rating agencies;
• Coordinate and lead presentations to rating agencies, when appropriate;
• Maintain a database with all outstanding debt;
• Apply and promote prudent fiscal practices;
• Select a qualified financial advisor with experience in municipal finance in Washington, and
registered with the SEC and MSRB as a “municipal advisor,” and
• Account for and pay all bonded indebtedness for the City , by specifically providing for the
timely payment of principal of and interest on all debt; and ensuring that the fiscal agent
receives funds for payment of debt service on or before the payment date.
The Council shall:
• Approve the Debt Policy;
• Approve indebtedness;
• Approve budgets sufficient to provide for the timely payment of principal and interest on
debt;
• Determine the most appropriate financing plan for proposed debt, based on
recommendation from the Finance Director, upon advice of the City’s financial advisor; and
• By Ordinance, delegate broad or limited authority to the Finance Director relative to
execution of a financing plan approved by the Council.
SECTION 3: METHOD OF SALE OF BONDS
Competitive Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a competitive bid basis. City debt
issued on a competitive bid basis will be sold to the bidder proposing the lowest true interest
cost to the City. Such bid may take the form of electronically transmitted offers to purchase the
bonds.
Negotiated Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a negotiated basis. If debt is sold on a
negotiated basis, the negotiations of terms and conditions shall include, but not be limited to,
prices, interest rates, redemption provisions and underwriting compensation. The Finance Director,
with the assistance of its financial advisor, shall evaluate the terms offered by the underwriter
including comparison of terms with prevailing terms and conditions in the marketplace for
comparable issues. If more than one underwriter is included in the negotiated sale of debt, the
Finance Director shall establish appropriate levels of liability, participation and priority of orders
and, with the assistance of its financial advisor, oversee the bond allocation process.
Private or Direct Placement. When deemed appropriate to minimize the direct or indirect
costs and risks of a debt issue, the Finance Director will, upon the advice of the City's financial
advisor, submit to the Council a request to incur debt issue through a private placement or direct
bank placement.
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SECTION 4. REFUNDING BONDS OR NOTES
Refundings will be conducted in accordance with chapter 39.53 RCW. Unless otherwise justified,
the City will refinance debt to either achieve debt service savings as market opportunities arise,
or to eliminate restrictive covenants.
Unless otherwise justified, an "advance refunding" transaction will require a present value savings
of five percent of the principal amount of the debt being refunded. In addition to the savings, any
determination to refund debt should take into consideration all costs and negative arbitrage in
the refunding escrow.
A "current refunding" transaction will require present value savings in an amount or percentage
to be determined by the Finance Director based upon the advice of the City's financial advisor.
SECTION 5. STRUCTURAL ELEMENTS
Maturity Term. The City shall issue debt with an average life less than or equal to the
average life of the assets being financed. Unless otherwise stated in law, the final maturity of the
debt shall be no longer than 40 years (RCW 39.46.110).
Debt Service Structure. Unless otherwise justified and deemed necessary, debt service
should be structured on a level annual basis. Refunding bonds should be structured to produce
debt service savings as determined by the Finance Director, based upon the advice of the City's
financial advisor, to be in the best interest of the City. Unless specifically justified and deemed
necessary, debt shall not have capitalized interest. If appropriate, debt service reserve funds
may be used for revenue bonds.
Maturity Structure. The City's long-term debt may include serial and term bonds. Unless
otherwise justified, term bonds should be sold with mandatory sinking fund requirements.
Price Structure. The City's long-term debt may include par, discount and premium bonds.
Discount and premium bonds must be demonstrated to be advantageous relative to par bond
structures, given applicable market conditions and the City's financing goals.
Interest Payments. Unless otherwise justified and deemed necessary, long-term debt will bear
interest payable semiannually.
Redemption Features. For each transaction, the City shall evaluate the costs and benefits
of call provisions.
Capitalization. Debt service reserves may be capitalized for enterprise activities only. Costs
of issuance may be capitalized for all debt. Interest costs may be capitalized upon the advice of
the City's financial advisor for any type of debt.
Bond Insurance. The City may evaluate the costs and benefits of bond insurance or other
credit enhancements. Any credit enhancement purchased by the City shall be competitively
procured unless otherwise justified.
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Tax-exemption. Unless otherwise justified and deemed necessary, the City shall issue its debt
on a tax-exempt basis. Taxable debt may be justified based on a need for flexibility in use of
proceeds, or when expected to reduce burdens relative to IRS rules.
SECTION 6. CREDIT OBJECTIVE
The City shall seek to maintain and improve its bond rating or ratings, as applicable.
SECTION 7. USE OF PROFESSIONALS AND OTHER SERVICE PROVIDERS
Bond Counsel. All debt issued by the City will include a written opinion by bond counsel
affirming that the City is authorized to issue the debt, and that all statutory requirements have
been met. The bond counsel opinion and other documents relating to the issuance of debt
will be prepared by nationally recognized bond counsel with extensive experience in public
finance and tax issues. Bond counsel will be appointed by the Finance Director consistent
with the City’s general authority to contract.
Financial Advisor. The Finance Director will appoint a financial advisor for each debt issue, or
for a specified term, consistent with the City's general authority to contract. The financial advisor
shall be nationally recognized, have comprehensive municipal debt experience, including debt
structuring and pricing of municipal securities, be registered as a “municipal advisor” with the
MSRB and SEC, and have knowledge of State laws relating to City finances. The City financial
advisor is to be available for general purposes, and will assist the City with all financing issues.
In no case shall the financial advisor serve as underwriter for the City's debt issues.
Underwriter. The Finance Director in consultation with the City's financial advisor will select
an underwriter for any negotiated sale of bonds. The selection of an underwriter may be for
an individual bond issue, series of financings or a specified time period, as determined by the
Finance Director. Depending upon the nature and amount of each financing, the Finance
Director is authorized, in consultation with the City's financial advisor, to appoint more than
one underwriter for each financing and to designate one underwriting firm as the managing
underwriter.
Other Service Providers. Professional services such as verification agent, escrow agent or
rebate analyst shall be appointed by the Finance Director in consultation with the City's
financial advisor and/or bond counsel.
Other City Policies and Procedures. The City shall comply with its Post-Issuance Tax
Compliance Policy, and shall provide the appropriate department heads and staff with
educational opportunities to ensure they are aware of requirements that may pertain to bond
financed facilities and assets relating to their duties.
SECTION 8. POST-ISSUANCE COMPLIANCE PROCEDURES
Continuing Disclosure Obligations for All Bonds
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Purpose. At the time of issuance of any Bonds, regardless of tax status, the City is required
to enter into a Continuing Disclosure Undertaking (“Undertaking”) in order to allow the
underwriter of the Bonds to comply with Securities and Exchange (“SEC”) Rule 15(c)2-12. The
Undertaking is a contract between the City and the underwriter in which the City agrees to
provide certain information to an “information repository” operated by the Municipal Securities
Rulemaking Board (“MSRB”) to ensure investors have access to annual updates and related
events that occur during the year.
Responsibility for Undertaking. The Finance Director is responsible for negotiating the
terms of and complying with each of the City’s Undertakings. The Finance Director will
negotiate the terms of the Undertaking at the time of each bond issuance, with a goal of
meeting the requirements of Rule 15(c)2-12, without undue burden on the City. The Finance
Director will strive to ensure that each Undertaking is similar to prior Undertakings to the extent
possible, to simplify future compliance.
Compliance with Undertaking. The Finance Director will have responsibility for ensuring
compliance with each Undertaking, which activities may be delegated to staff within the finance
department. This will require certain annual filings, by a set due date, as well as periodic filings
as certain specified events arise. Filings are to be made through the Electronic Municipal
Market Access (“EMMA”) portal, managed by the MSRB. The Finance Director is responsible
for knowing the terms of the City’s Undertakings, and ensuring appropriate staff within the
finance department and other departments of the City are aware of the events that may require
a filing.
Certification of Compliance. At the time of each subsequent bond issue, the Finance
Director is responsible for reviewing all prior compliance, and providing a statement as to that
prior compliance, as required by Rule 15(c)2-12. Each official statement will include a
statement that describes compliance (or non-compliance) with each prior undertaking, which
statement will be certified by the Finance Director.
Compliance Relating to Tax Exempt Bonds
Purpose. The purpose of these post-issuance compliance procedures (“Compliance
Procedures”) for tax-exempt bonds and other obligations issued by the City for which federal
tax exemption is provided by the Internal Revenue Code of 1986, as amended (the “Code”), is
to facilitate compliance by the City with the applicable requirements of the Code that must be
satisfied after the issue date of the bonds to maintain the tax exemption for the bonds after the
issue date.
Responsibility for Monitoring Post-Issuance Tax Compliance. The City Council of the City
has the overall, final responsibility for monitoring whether the City is in compliance with post-
issuance federal tax requirements for the City’s tax-exempt bonds. However, the City Council
has delegated the primary operating responsibility to monitor the City’s compliance with post-
issuance federal tax requirements for the City’s bonds to the Finance Director and has
authorized and directed the Finance Director of the City to adopt and implement on behalf of
the City these Compliance Procedures.
Arbitrage Yield Restriction and Rebate Requirements. The Finance Director will maintain
or cause to be maintained records of:
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(a) purchases and sales of investments made with bond proceeds (including amounts treated
as “gross proceeds” of bonds under section 148 of the Code) and receipts of earnings on
those investments;
(b) expenditures made with bond proceeds (including investment earnings on bond proceeds)
in a timely and diligent manner for the governmental purposes of the bonds, such as for
the costs of purchasing, constructing and/or renovating property and facilities;
(c) information showing, where applicable for a particular calendar year, that the City was
eligible to be treated as a “small City” in respect of bonds issued in that calendar year
because the City did not reasonably expect to issue more than $5,000,000 of tax-exempt
bonds in that calendar year;
(d) calculations that will be sufficient to demonstrate to the Internal Revenue Service (“IRS”)
upon an audit of a bond issue that, where applicable, the City has complied with an
available spending exception to the arbitrage rebate requirement in respect of that bond
issue;
(e) calculations that will be sufficient to demonstrate to the IRS upon an audit of a bond issue
for which no exception to the arbitrage rebate requirement was applicable, that the rebate
amount, if any, that was payable to the United States of America in respect of investments
made with gross proceeds of that bond issue was calculated and timely paid with Form
8038-T timely filed with the IRS; and
(f) information and records showing that investments held in yield-restricted advance refunding
or defeasance escrows for bonds, and investments made with unspent bond proceeds after
the expiration of the applicable temporary period, were not invested in higher-yielding
investments.
Restrictions on Private Business Use and Private Loans. The Finance Director will adopt
procedures calculated to educate and inform the principal operating officials of those
departments, including utility departments, if any, of the City (the “users”) for which land,
buildings, facilities and equipment (“property”) are financed with proceeds of tax-exempt bonds
about the restrictions on private business use that apply to that property after the bonds have
been issued, and of the restriction on the use of proceeds of tax-exempt bonds to make or
finance any loan to any person other than a state or local government unit. In particular,
following the issuance of bonds for the financing of property, the Finance Director shall provide
to the users of the property a copy of these Compliance Procedures and other appropriate
written guidance advising that:
(a) “private business use” means use by any person other than a state or local government
unit, including business corporations, partnerships, limited liability companies,
associations, nonprofit corporations, natural persons engaged in trade or business activity,
and the United States of America and any federal agency, as a result of ownership of the
property or use of the property under a lease, management or service contract (except for
certain “qualified” management or service contracts), output contract for the purchase of
electricity or water, privately sponsored research contract (except for certain “qualified”
research contracts), “naming rights” contract, “public-private partnership” arrangement, or
any similar use arrangement that provides special legal entitlements for the use of the bond-
financed property;
(b) under section 141 of the Code, no more than 10% of the proceeds of any tax-exempt bond
issue (including the property financed with the bonds) may be used for private business
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use, of which no more than 5% of the proceeds of the tax-exempt bond issue (including the
property financed with the bonds) may be used for any “unrelated” private business use—
that is, generally, a private business use that is not functionally related to the governmental
purposes of the bonds; and no more than the lesser of $5,000,000 or 5% of the proceeds
of a tax-exempt bond issue may be used to make or finance a loan to any person other
than a state or local government unit;
(c) before entering into any special use arrangement with a nongovernmental person that
involves the use of bond-financed property, the user must consult with the Finance Director,
provide the Finance Director with a description of the proposed nongovernmental use
arrangement, and determine whether that use arrangement, if put into effect, will be
consistent with the restrictions on private business use of the bond-financed property;
(d) the Finance Director is to communicate with the City’s bond counsel and/or financial
advisor relative to any proposed change in use or special use arrangement that may impact
the status of the bonds, before entering into such agreement.
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PURCHASING POLICY
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BOND RATING
RATING OVERVIEW
Tukwila’s General Obligation (GO) bond rating acts as the City’s credit rating and is a measure of the overall
financial stability of the City. In order to fund large capital projects, the City issues bonds, or debt, and the
purchase of those bonds provides the financing for these capital projects. The GO bond rating indicates how
safe of an investment the City’s bonds are to potential purchasers. There are three main municipal bond rating
agencies: Moody’s, Standard & Poor’s, and Fitch.
Each rating agency has a proprietary methodology for assigning ratings to a municipality.
RATING SCALE
Tukwila has a Limited General Obligation bond rating of AA+ with Standard & Poor and A1 with Moody.
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CRITERIA USED BY RATING AGENCIES
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DEBT SERVICE SUMMARY
Existing LTGO Debt
SCORE Limited Tax, GO Bonds, Refunded 2019 (Moody’s rating “Aa2” and S&P rating “AA+”):
Pay for portion of the construction costs of SCORE jail, a correctional facility, in partnership with
five other cities. Original issue amount $51,055,000 with $4,921,702 allocated to the City of
Tukwila. SCORE plans to pay the debt service on behalf of the owner cities, which includes
Tukwila. The debt has a 20-year repayment schedule with interest rates ranging from 1.24% to
3.08% and is callable on December 1, 2029.
Limited Tax GO Bonds, 2015 (S&P rating “AA+”): Funding for Interurban Avenue South and
Boeing Access Road Bridge projects. Interurban Avenue South consisted of designing and
constructing sidewalks, pavement restoration, as well as drainage and lighting work. Boeing
Access Road Bridge project rehabilitated the existing bridge with a 340’ long concrete or steel
bridge structure. Original issue amount of $5,825,000. The debt has a 20-year repayment
schedule with interest rates ranging from 2.25% to 3.00% and is callable on June 1, 2025.
Limited Tax GO Bonds, 2017 (S&P rating “AA+”): Funding for 42nd Street and 53rd Street
Sidewalk projects. Original issue amount of $8,180,000. The debt has a 20-year repayment
schedule with interest rates ranging from 3.00% to 3.50% and is callable on June 1, 2027.
Limited Tax GO Refunding Bonds, 2017 (private placement): Funds used to purchase property
in the City’s Urban Renewal area. Original issue amount of $2,276,000 with a balloon payment
due December 1, 2022. Interest rate ranges from 2.60% to 3.00%. Anticipated land sale
revenue will be utilized to repay this debt.
Limited Tax GO Bonds, 2018 (S&P rating “AA+”): Funding to purchase land for the Public Works
Shops facility. This debt is part of the Public Safety Plan. Original issue amount of $18,365,000.
The debt has a 20-year repayment schedule with interest rates ranging from 1.95% to 3.50%
and is callable on June 1, 2027. Anticipated land sale revenue will be utilized to repay a portion
of this debt.
Limited Tax GO Bonds, 2019 (S&P rating “AA+”): Funding for Public Safety Plan projects
including the construction of a Justice Center, two fire stations, and PW Shops. Original issue
amount of $22,830,000. The debt has a 20-year repayment schedule with interest rates ranging
from 3.00% to 5.00% and is callable on June 1, 2029. Anticipated land sale revenue will be
utilized to repay a portion of this debt.
Limited Tax GO Refunding Bonds, 2020 (private placement): Funding for Southcenter Parkway
and Howard Hansen Dam projects. Original issue amount of $1,995,000. Interest rate for the
life of the issue is 1.29%.
Limited Tax GO Bonds, 2021A (private placement): Funding for Public Works Shops Phase I
project. Original issue amount of $2,867,300. Interest rate for the life of the issue is 1.70%.
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Limited Tax GO Refunding Bonds, 2021B (private placement): Original proceeds were used to
purchase property in the City’s Tukwila Redevelopment (Urban Renewal) area. Original issue
amount of $2,780,900. Interest rate for the life of the issue is 2.70%.
Limited Tax GO Refunding Bonds, 2021C Taxable (private placement): Original proceeds were
used for arterial street capital projects. Original issue amount of $1,072,300. Interest rate for the
life of the issue is 1.15%.
Existing UTGO Debt
Unlimited Tax GO Bonds, 2016 (S&P rating “AA+”): Funding for Public Safety Plan projects
including the purchase of land and construction of a Justice Center and two fire stations. Original
issue amount of $32,990,000. The debt has a 20-year repayment schedule with interest rates
ranging from 4.50% to 5.00% and has an optional redemption date of December 1, 2026.
Unlimited Tax GO Bonds, 2019 (S&P rating “AA+”): Funding for Public Safety Plan projects
including the construction of a Justice Center and two fire stations. Original issue amount of
$37,770,000. The debt has a 20-year repayment schedule with interest rates ranging from
3.00% to 5.00% and is callable on June 1, 2029. This issue is being repaid by an excess property
tax levy.
Existing Local Improvement District Debt
Local Improvement District #33, 2013 (S&P rating “BBB”): Funding to improve access to the
Southcenter area. Original issue amount of $6,687,500. The debt has a 20-year repayment
schedule with interest rates ranging from 3.15% to 5375%. Debt is being repaid from
assessments on property within the LID #33 boundaries.
Planned Debt
Public Works Shop Phase II: Amount to be determined.
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Historical Debt Capacity (2017-2023) with Projected Assessed Value and Projected Debt
Capacity
Without a Vote
of the People
Year LTGO Debt UTGO Debt
Total Long-
Term Debt Assessed Value %Change AV
1.5%2.5%
Remaining
Non-Voted
Debt
Capacity
Remaining
Total Debt
Capacity
2017 35,014,277 32,990,000 68,004,277 6,184,943,263 7.31% 92,774,149 154,623,582 57,759,872 86,619,305
2018 48,358,749 31,875,000 80,233,749 6,685,919,176 8.10% 100,288,788 167,147,979 51,930,039 86,914,230
2019 71,439,055 68,405,000 139,844,055 7,351,973,382 9.96% 110,279,601 183,799,335 38,840,546 43,955,280
2020 72,205,534 67,035,000 139,240,534 7,883,057,562 7.22% 118,245,863 197,076,439 46,040,329 57,835,905
2021 73,117,643 66,335,000 142,302,643 8,010,892,032 1.62% 120,163,380 200,272,301 44,195,737 57,969,658
2022 70,734,706 65,375,000 138,650,706 8,970,452,548 11.98% 134,556,788 224,261,314 61,281,082 85,610,608
2023 64,094,790 63,595,000 129,921,790 9,496,535,922 5.86% 142,448,039 237,413,398 76,121,249 107,491,608
2024 59,643,954 61,615,000 123,181,954 9,923,880,038 4.50% 148,858,201 248,097,001 87,291,247 124,915,047
2025 55,602,406 59,210,000 116,426,406 10,370,454,640 4.50% 155,556,820 259,261,366 98,340,414 142,834,960
2026 51,941,964 56,565,000 109,811,964 10,837,125,099 4.50% 162,556,876 270,928,127 109,309,912 161,116,163
2027 48,157,300 53,660,000 102,813,300 11,324,795,728 4.50% 169,871,936 283,119,893 120,718,636 180,306,593
2028 44,231,450 50,485,000 95,403,450 11,834,411,536 4.50% 177,516,173 295,860,288 132,597,723 200,456,838
2029 40,164,314 47,025,000 87,567,314 12,366,960,055 4.50% 185,504,401 309,174,001 144,962,087 221,606,687
2030 36,414,928 43,290,000 79,773,928 12,923,473,258 4.50% 193,852,099 323,086,831 157,368,171 243,312,903
2031 32,218,328 39,270,000 71,488,328 13,505,029,555 4.50% 202,575,443 337,625,739 170,357,115 266,137,411
2032 28,515,314 34,950,000 63,465,314 14,112,755,884 4.50% 211,691,338 352,818,897 183,176,024 289,353,583
2033 24,683,322 30,315,000 54,998,322 14,747,829,899 4.50% 221,217,448 368,695,747 196,534,126 313,697,425
2034 20,723,662 25,360,000 46,083,662 15,411,482,245 4.50% 231,172,234 385,287,056 210,448,572 339,203,394
2035 16,626,052 20,075,000 36,701,052 16,104,998,946 4.50% 241,574,984 402,624,974 224,948,932 365,923,922
2036 12,652,810 14,440,000 27,092,810 16,829,723,898 4.50% 252,445,858 420,743,097 239,793,048 393,650,287
2037 8,926,072 8,440,000 17,366,072 17,587,061,474 4.50% 263,805,922 439,676,537 254,879,850 422,310,465
2038 5,070,838 4,335,000 9,405,838 18,378,479,240 4.50% 275,677,189 459,461,981 270,606,351 450,056,143
2039 1,640,000 - 1,640,000 19,205,510,806 4.50% 288,082,662 480,137,770 286,442,662 478,497,770
2040 - - - 20,069,758,792 4.50% 301,046,382 501,743,970 301,046,382 501,743,970
2041 - - - 20,972,897,938 4.50% 314,593,469 524,322,448 314,593,469 524,322,448
2042 - - - 21,916,678,345 4.50% 328,750,175 547,916,959 328,750,175 547,916,959
2043 - - - 22,902,928,870 4.50% 343,543,933 572,573,222 343,543,933 572,573,222
City of Tukwila
Historical Debt Capacity with Projected Assessed Value and Projected Debt Capacity
With a Vote of
the People
Legal Debt Limit
Voted debt cannot exceed the
aggregate of: 2.5% for general
purposes, 2.5% for parks and
open spaces, & economic
development, and 2.5% for utility
purposes
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PRIORITY-BASED BUDGETING (PBB)
WHAT IS PRIORITY BASED BUDGETING?
Priority Based Budgeting (PBB) is the City’s priority-driven budgeting process that will better show
how resources are allocated to the programs and services that provide the greatest value to our
residents.
The first phase of the City’s implementation of PBB was to apply the process to the General Fund for
the 2019-2020 biennium. The second phase of the implementation was to apply PBB to the Enterprise
Funds for the 2021-2022 biennium. Please note that due to lack of resources during the COVID-19
pandemic in 2020 that programs for the Enterprise funds were not scored into tiers. The City expects
to complete this part of Phase 2 during the next budget cycle.
PBB helps the City and the community evaluate how well the City’s resources are aligned with the
adopted Strategic Plan and community priorities, and engage in strategic decision-making regarding
funding, adding, and/or eliminating programs and services.
The foundation of the process is to:
Prioritize services: Evaluate the relative importance of individual programs and services
rather than entire departments.
Do the important things well: In a time of revenue decline, a traditional budget process often
attempts to continue funding all the same programs it funded last year, although at a reduced
level. The priority-driven budgeting process focuses on identifying the services that offer the
highest value.
Question past patterns of spending: An incremental budget process does not seriously
question the spending decisions made in years past. The priority-driven budget process puts
all the money on the table to encourage more creative conversations about services.
Know the true cost of doing business: Focusing on the full costs of programs ensures that
funding decisions are based on the true cost of providing a service.
Provide transparency of community priorities: When budget decisions are based on a well-
defined set of community priorities, the government’s aims are not left open to interpretation.
Provide transparency of service impact: In traditional budgets, it is often not entirely clear
how funded services make a real difference in the lives of citizens. Under priority-driven
budgeting, the focus is on the results the service produces for achieving community priorities.
Demand accountability for results: Traditional budgets focus on accountability for staying
within spending limits. Beyond this, priority-based budgeting demands accountability for results
that were the basis for a service’s budget allocation.
Evaluating programs based on their influence in achieving the Strategic Goals: Tukwila’s
programs were scored against the City’s adopted Strategic Plan, as well as criteria that
incorporates mandates, reliance on the city to provide the program, cost recovery, portion of the
community served, and change in demand. Programs were also scored based on ability
to achieve community and/or good governance results. All department scores were reviewed by
peer review teams as part of a quality control process.
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PRIORITY BASED BUDGETING (PBB) PROCESS
Program Inventory: The first step of the PBB process was to establish a program inventory that
encompassed all the activities the City performs. Each department developed a comprehensive list of
programs and services offered. Each program was then classified as either a community-based or
governance-based program. Governance-based programs contribute to the City’s structure as a
municipal organization.
Personnel Costs and FTE: Once the program inventory was developed, the next step was to input
department personnel costs. Each department allocated the percentage of each employee’s time that
is spent on specific programs. These percentages were then used to allocate personnel costs to
programs as well as calculate the allocation of full-time equivalence (FTE). Employee time is classified
by FTE, on a scale of 0-1 (with 1 being the equivalent of a full-time employee).
Non-Personnel Costs: Non-personnel cost types were also allocated in the model. Non-personnel
costs include supplies, services, intergovernmental, and capital.
Program Scoring: The next step to PBB was to score each program on several dimensions. Staff
scored each program on five basic program attributes (BPAs), using a scale of 0-4: The BPA’s include:
Level of program mandate
Reliance on the City to provide the program
Cost recovery of the program
Portion of the community served by the program
Change in the demand for the program
Next, each program was scored against either the City’s four adopted Strategic Plan goals (in the case
of community programs), or five governance goals (in the case of governance programs). Each
program’s performance for each result was graded on a 0-4 scale. The community program Strategic
Plan goals are as follows:
A community of inviting neighborhoods and vibrant business districts.
A solid foundation for all Tukwila residents.
A diverse and regionally competitive economy.
A positive community identity and image.
The governance program goals are:
Ensure City facilities are safe, efficient, and inviting to the public.
Continue to innovate and develop as an organization and support individual growth.
Advance Tukwila’s interests through participation in regional partnerships.
Use Tukwila’s Vision, Mission, and Strategic Plan to focus and prioritize City efforts.
Ensure the long-term fiscal sustainability of the City.
Program Rankings – Tiers 1, 2, 3 & 4
The analysis described above resulted in a final score for each program. The score was developed
using a formula that provides additional weight/emphasis for a program’s alignment with the strategic
goals, and for the level of mandate identified within the BPA analysis.
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The final product splits programs into four tiers and provides a visual representation of how much
money is being spent on the programs that fall into each tier. In this representation, the first tier (T1)
identifies programs with the most direct connection and support of the City’s strategic goals and other
contributing attributes. The fourth tier (T4) identifies the programs with the lowest relative connection to
the results and other attributes. It should be noted that while a program may fall into the fourth tier, it
may be mandated at either the state or federal level to provide the program.
The following graph represents the City’s general fund budgeted for the current biennium (2023-2024)
on programs that fall into each tier. The length of the bar indicates total dollars budgeted, with the longer
bars representing a higher budgeted amount.
Tier 1 programs are determined by the PBB model to be those most closely aligned with the City’s
strategic goals, followed by the other tiers. Tier 4 programs are also important, and may reflect strongly
held community values, but receive a lower relative rank using the PBB scoring framework. An example
of a tier 1 program is Police patrol services. An example of a tier 4 program is court hearings, a program
identified by the Municipal Court. While this particular program may indirectly impact the strategic goals,
there is no direct linkage between court hearings and the strategic goals. However, this program is a
necessary function of City government. Anyone cited within the City limits has a right to a court hearing
which is mandated at both the federal and state level.
Beginning with the 2023-2024 biennium, a Tier 5 was added. Tier 5 represents budgeted items that are
not tied to programs. These include debt service requirements as well as costs associated with the Fire
Department. With the Fire Department transitioning to a contract for services, it was not possible to
accurately determine a program budget.
Budgeting by program helps to illustrate the City’s ongoing effort to ensure that resources are aligned
with the programs and services that have been identified as most critical. Across all program types, the
City is currently providing the greatest level of resources to tier 1 and tier 2 programs, with $37.9 million
and $39.4 million allocated to tier 1 and tier 2 programs in 2023 and 2024 respectively.
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Analyzing the data from a different perspective, the charts below show how programs are allocated by
tier at a department level.
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Programs Alignment and Categorization
Beginning with the 2025-2026 biennial budget, programs will be allocated to categories. This method
will allow for the review of programs that have similar attributes at the same time. Programs within each
category will still maintain all relevant PBB data points including tier, legal level, and whether a program
is a community facing program or a governance (internal service) program. Budgetary information that
is expected to be included for each program includes:
2023-2024 final budget,
2025-2026 proposed budget,
FTE count,
FTE budget,
Supplies/services budget
Revenue generated by program
Aligned & Innovative Services:
Prioritizes timely and reliable solutions efficiently and effectively across internal programs
and services.
Strategic & Responsive Engagement:
Endeavors to foster an inclusive community characterized by open communication,
transparency and equitable access to municipal services for all residents.
Connected & Vital Infrastructure:
Strategically allocates resources to enhance assets and infrastructure and ensures the
provision of safe and sustainable utilities for both residential and commercial communities.
Accessible Mobile Networks:
Prioritizes investments in mobility and well-maintained transportation routes throughout the
city, encompassing streets, sidewalks, and trails, to facilitate safe, accessible and efficient
travel for both residents and visitors
Healthy & Sustainable Community:
Values a healthy environment and exemplifies a well-planned and structurally sound city,
offering a diverse array of cultural and recreational amenities that supports an active
community.
Integrated Operations:
Offers comprehensive support in financial management, technology integration, and policy
development to various program areas within the city.
Safe & Resilient:
Committed to fostering a structurally sound community, ensuring both residents and visitors
feel safe and secure.
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Program List by Category
Service Area: Aligned and Innovative Services
Program Definition Tier Required (Y/N) Type FTE
End-User
Hardware
Services
End-user hardware services; laptops, desk
phones, PC, point of sale, first responder
(rugged tablets and cameras).
2 Y - Federal/State Governance 0.64
Recruiting &
Hiring: Non-Police
This program is tasked with finding, attracting,
evaluating, and hiring top talent. Recruitment for
non-Police. Includes lifecycle of recruitment from
vacancy to onboarding.
2 Y - City Code Governance 0.84
Professional
Development &
Training
Development of operational and strategic
knowledge and skills to support staff
development and better outcomes for the
community and organization.
3 Y - Ord/Res Governance 3.53
Accounts Payable Process invoices for payment, review
department coding and data input, issue 1099s.
Review and post purchase card transactions
3 Y - Federal/State Governance 1.78
Benefit Plan
Management
Managing health, retirement and other benefits.
Claims processing 3 Y - Federal/State Governance 0.40
Classification &
Compensation
Job descriptions and compensation studies for
rep and non-rep employees 3 Y - Ord/Res Governance 0.22
Labor & Employee
Relations
Contract/collective bargaining negotiations.
Complaints, grievances, investigations, and
contract interpretation.
3 Y - Federal/State Governance 0.44
Police Support
Operations
Support Operations staff provides help to officers
in the street (both Tukwila officers as well as
other agencies). This Division is also required to
fulfill State mandated public disclosure requests.
3 Y - State Governance 7.75
Network
Infrastructure
Services
Network design and support, maintenance.
3 N - Best Practice Governance 0.49
Technology
Mobility Services
Cell phones, in-car wireless, virtual private
networks, iPads, IoT (internet of things
connected smart devices). monthly data fees
and management of services.
4 N - Best Practice Governance 0.40
Payroll & Benefit
Administration
Provide payroll preparation and processing to all
City employees, administer LEOFF 1 pension
plan
4 Y - Federal/State Governance 1.61
TIS Service Desk Tier 1/2 support and triage (Basic IT support and
Training). Advanced Troubleshooting, Device
Provisioning and Service Fulfilments.
4 N - Best Practice Governance 2.12
Service Area: Strategic and Responsive Engagement
Program Definition Tier Required (Y/N) Type FTE
Equity
Implementation
Implementation of City Equity policy, support for
EPIC (Equity Policy Implementation Committee),
equity training and regional/national partnerships
and memberships in equity-focused
organizations.
1 Y - Ord/Res Community 0.61
Governmental
Affairs & Regional
Issues
Liaise with other government and regional
entities. Includes travel and registrations to
regional, state, and national boards
1 Y - Federal/State Community 1.43
Legislative &
Budget Oversight
Study information and attend meetings to provide
policy direction and budget authority for City
services
1 Y - Federal/State Governance 5.95
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Administration General functions for standard operations of all
departments, including purchasing, timecards,
budget development and oversight, culture and
internal communications, recruiting and hiring,
employee supervision and performance
evaluations.
2 Y - Federal/State Governance 19.61
Communications
& Community
Engagement
Fosters more inclusive public participation and
relationship building. 2 N - Best Practice Community 11.56
Council
Agenda/Meeting
Functions
Administration, agenda production, agenda
review and long-term planning, meeting
facilitation, minutes, legislative history
2 Y - Federal/State Governance 0.79
Council
Legislative
Support
Oversees and coordinates with city staff in
preparation for City Council meetings; Provides
information to Council for their deliberation.
Supports and implements Council policy
decisions.
2 Y - Federal/State Governance 0.28
Ordinance,
Resolution & City
Code
Development
Legislation creation and review, amending and
repealing documents, ongoing TMC
development, and significant department-led
code changes.
2 Y - Federal/State Governance 1.23
Public Defense
Program
Oversight of the Public Defense Program,
processing invoices, reports, complaints.
Prepares annual program report. Applies for
grant funds to support the program. Oversight of
Office of Public Defense Grant funds. Prepares
reports as required
2 Y - Federal/State Community 0.10
Boards/Commissi
ons/Committees
Support
Staffing, participating and other support for the
successful development and administration of
Board and Commission recruitment, trainings,
and meetings. Also includes assisting with
appointments and monitoring terms of
appointment and training requirements. Receive
applications and compiles memo for Mayor,
schedule interviews, as requested, maintains a
roster with all appointees and expiration dates,
send memos for approved appointment for city
council agenda, issue press releases, send
thank you, regrets and/or congratulations letters
to residents
3 Y - City Code Governance 1.43
Digital Records
Center
Growth and development of system, microfilming
and digitization, importing new record series,
GET-IT, policies, training, new initiatives,
maintenance costs professional development.
3 Y - Federal/State Governance 0.97
Public Record
Req & Record
Management
Adherence to public records laws.
4 Y - Federal/State Community 8.98
Court Case
Management
The constellation of court rules, business
practices, culture and governance, and staffing
and technology infrastructure assembled to
achieve the objectives of timely, cost-effective,
and procedural fairness.
4 Y - Federal/State Community 2.35
City
Administration
Support
Preparation of correspondence, memos,
presentations. Oversight of scheduling for Mayor
and City Administrator
4 N - Best Practice Governance 0.44
Court Interpreter
Program
In compliance with RCW 2.43 the court provides
AOC Certified Court Interpreters to all court
customers for criminal and non-criminal
hearings, mitigation and contested hearings,
front counter assistance and Court Support
Services.
4 Y - Federal/State Community 0.30
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Service Area: Connected and Vital Infrastructure
Program Definition Tier Required (Y/N) Type FTE
Projects & Capital
Improvements
Management
Planning and executing community infrastructure
investments 1 N - Best Practice Community 2.77
Levees Management of the City's 205 Levee and
cooperation with FEMA and King County Flood
Control District.
1 Y - Federal/State Community 1.00
Pump Station
Monitoring &
Maintenance
Staff time and supplies for comprehensive sewer
maintenance and operations. 1 Y - Federal/State Community 0.03
Ditches, Ponds,
Bioswale
Staff time and supplies for maintenance of
surface water ditches, ponds, and bioswales by
the City's surface water crew
2 Y - Federal/State Community 0.90
Manholes/Catch
basins
Staff time for maintenance and supplies for City's
manholes/catch basins. Includes using the
Vactor truck and costs for proper disposal of
drainage waste
2 N - Best Practice Community 1.88
Meter Reading
and Maintenance
Staff time for meter reading (majority are radio
reads) and maintenance and replacement of
water meters
2 N - Best Practice Community 1.05
Surface Water -
NPDES
Compliance
Includes staff time and supplies to adhere to the
requirements Surface Water National Pollutant
Discharge Elimination System (NPDES) Permit.
Includes annual reporting, public education and
outreach, staff training, and inspections of public
and private systems. Includes staff response to
illicit discharge events in City's right-of-way.
2 Y - Federal/State Community 4.18
Outfall/Flap
Gates/Trash racks
Outfalls, Flap Gates, and Trash racks-Staff time
and supplies for maintenance of surface water
outfalls, flap gates, and trash racks by the City's
surface water crew. Includes all staff time for
monitoring the Green/Duwamish River in high
water events
2 N - Best Practice Community 1.55
Reservoir/Water
Supply Stations
Reservoir/ Water Supply Stations/ Pressure
Reducing Stations
Covers all work at the City's reservoir, supply
stations, and includes CWA fees for purchased
water that supplies the City's water district
2 Y - Federal/State Community 1.05
Surface Water
Mains
Staff time for maintenance and supplies for City
surface water mains 2 Y - Federal/State Community 1.88
Utilities/Surface
Water
Staff time and supplies for surface water main
maintenance and replacement by the City's
crew.
2 Y - City Code Governance 0.00
Utility Billing Provides support to the water, sewer, and
surface water management departments.
Provides all aspects of billing services, leak
adjustments, financial reporting, etc.
3 Y - Federal/State Governance 1.84
Water
Mains/Service
Lines
Staff time and supplies for water main
maintenance and replacement by the City's
water crew
3 Y - Federal/State Community 1.30
Water
Quality/Backflow
Prev
Staff time and supplies for water quality
maintenance and replacement. Includes a full-
time water employee to maintain backflow
prevention records to meet City codes in order to
protect the water quality throughout the City's
water district
3 Y - Federal/State Community 1.20
Fire Hydrants Staff time and supplies for fire hydrant
maintenance and replacement. Includes flushing 4 N - Best Practice Community 1.25
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the fire hydrants as well as billable workorders
after accidents
Sewer
Mains/Service
Lines
Staff time and supplies for sewer main
maintenance and replacement by the City's
sewer crew
4 N - Best Practice Community 1.70
Service Area: Accessible Mobility Networks
Program Definition Tier Required (Y/N) Type FTE
Sidewalks Staff time and supplies for sidewalk maintenance
and replacement by the City's crew. 1 Y - City Code Community 0.43
Snow & Ice
Control
Staff time and supplies for snow removal by the
City's crew. 1 Y - City Code Community 0.88
Traffic Control
Devices
Repair and maintenance of traffic signals,
signage, and buttons. 1 Y - Federal/State Community 2.33
Roadway Repair
& Maintenance
Repair of minor structural issues with streets and
roadways. Program 10163-Pothole/Litter Control
was rolled into this Program.
2 N - Best Practice Community 0.38
Street Cleaning Street sweeping, tree removal, etc. 2 Y - Ord/Res Community 0.78
Street Lighting Repair and maintenance of streetlight poles. 2 Y - Ord/Res Community 2.10
Trail Maintenance Landscape maintenance at city numbered trails,
Green River Trail, and Interurban Trail 3 N - Best Practice Community 0.61
TIB Bus
Stop/Streetscape
Bus stop cleanup, repair and maintenance. 3 N - Best Practice Community 2.10
Service Area: Healthy and Sustainable Community
Program Definition Tier Required (Y/N) Type FTE
Community
Investment
Providing Tukwila community members with
resources to improve quality of life and access to
opportunities such as financial support for rental
assistance, food insecurity, health and well-
being, minor home repair.
1 N - Best Practice Community 7.56
Long-Range &
Comprehensive
Planning
In compliance with state law, develop long range
plans for Tukwila Land Use (i.e., City
Comprehensive and Subarea Plans) and
functional plans such as Public Works plans
(e.g., Stormwater, Transportation, Water, etc.),
as well as Economic Development, Parks,
Emergency Management, etc.
1 Y - Federal/State Governance 1.56
Current Planning Review of land use permits such as SEPA,
design review, rezones, conditional use permits
etc.
1 Y - Federal/State Community 1.96
Business &
Development
Attraction/
Retention
Attracting businesses and developments to
Tukwila.
Building and maintaining relationships with
businesses, including networking, providing
general assistance, and helping businesses
resolve issues related to the City.
2 N - Best Practice Community 0.40
Construction
Permit Review &
Inspection
Internal and contracted review of Building,
Plumbing, Electrical, ROW, and Mechanical
Permits for compliance with State Building Code
and City requirements. Inspect to ensure
construction is per plan.
2 Y - Federal/State Community 6.69
Destination
Development
Developing the City as a destination for tourism
by investing in facilities and infrastructure. 2 N - Best Practice Community 0.03
Environmental
Stewardship
Activities focused on environmental
sustainability, such as Recycling, Transportation
Demand Management, and environmental
stewardship. Activities to benefit City of Tukwila
2 Y - Ord/Res Community 3.90
63
residents include, community outreach and
programs, grant-writing, and other supportive
activities.
Rental Housing
Program
Compliance with City Rental Housing Licensing
and Inspection Ordinance 2 Y - City Code Community 1.23
Tourism Marketing Program to attract daytime and overnight visitors. 2 N - Best Practice Community 0.15
Older Adult
Services and
Programs
Services and programs for senior adults ages 50
and above 3
N - No Mandate Community
1.80
Administrative
Code Compliance
Previously Business License Admin; expanded
for Minimum Wage compliance.
Administrative Code compliance including both
Business License admin and Minimum Wage
admin. Provide customer service to both internal
and external customers, review, and route
applications to other departments for review
before issuing licenses. Perform reviews of
businesses to ensure compliance with Tukwila's
minimum wage laws.
3 Y - City Code Governance 0.15
Facility Rentals Schedule use of over 20 rental facilities
throughout the Parks and Recreation system:
including the Community Center, picnic shelters,
ball fields, and rental services (equipment rental)
3 N - No Mandate Community 0.53
Homeless
Encampment
Response
Maintenance and cleanup of identified homeless
encampment sites within the city 3 N - Best Practice Community 0.18
Parks
Maintenance
Landscape maintenance at city parks 3 N - Best Practice Community 3.53
Park Restrooms
Contract
Contracted services for restroom closures at city
parks 3 N - Best Practice Community 0.01
Permit Intake,
Issuance,
Coordination
Intake approximately 1,800 construction permits,
manage review, and issue approval or denials 3 Y - Federal/State Community 4.94
Preschool
Services and
Program
Implement play-based preschool programming
for ages 3 to 5 3 N - No Mandate Community 0.60
Streetscapes/Medi
an Landscape
Street landscaping. 3 N - Best Practice Community 0.75
Wellness & Adult
Services &
Programs
Fitness memberships and classes offered for
ages 13+ and adult sport activities 3 N - No Mandate Community 1.05
Youth & Teen
Services and
Programs
Programming and activities for youth ages 5-18
3 N - No Mandate Community 2.04
City Property
Development &
Management
Coordinating management, development, and/or
sale of select city owned properties including the
following: Healthpoint Health & Wellness Center,
Newporter Site, George Long Shops, Minkler
Shops, Old Fire Station 51, and Longacres.
4 N - No Mandate Community 0.33
Facility
Management &
Improvements
Staff time for maintenance and supplies for the
City facilities. Staff time for
Improvements/additions and supplies for City
Facilities. Includes using hired vendors and
costs for maintenance such as the HVAC
system, roof, and other structural repairs.
Program 10118-Park Fac Maintenance (TCC)
was rolled into this program.
4 N - Best Practice Governance 7.75
Fleet
Management
Maintenance of all carts, vehicles, and
equipment necessary for City operations 4 N - Best Practice Governance 0.90
64
Grounds
Maintenance-City
Facilities
Landscape maintenance of city hall campus,
Tukwila Justice Center, and fire stations 4 N - No Mandate Governance 0.72
Lodging Tax
Application,
Oversight and
Support
Lodging Tax Application oversight & Support:
Administrative oversight of Lodging Tax
committee business including funding requests. 4 Y - City Code Community 0.09
Graffiti, vandalism
& garbage
Clean-up of damage around City. 4 N - Best Practice Community 1.50
Service Area: Integrated Operations
Program Definition Tier Required (Y/N) Type FTE
Administration General functions for standard operations of all
departments, including purchasing, timecards,
budget development and oversight, culture and
internal communications, recruiting and hiring,
employee supervision and performance
evaluations.
2 Y - Federal/State Governance 19.61
Geographic
Information
Systems (GIS)
Includes staff time and consultant services to
maintain the geographic information system
(GIS) data necessary for customer inquiries,
daily operations and infrastructure maintenance.
2 Y - City Code Governance 0.27
Budget/CIP
Development
Facilitate development of the biennial budget,
review, and file budget with State Auditor.
Process budget amendments. Plan and develop
6-year CIP document addressing current and
future city-wide capital needs.
2 Y - Federal/State Governance 1.29
Business
Application
Services
Business application which include financial,
asset management (fleet, facilities, parks, and
city infrastructure e.g. water, sewer, surface
water and street), human resources support
2 Y - Federal/State Governance 0.28
Business Data
Management &
Support
Maintaining and supporting enterprise application
relational databases to ensure integrity of
application data
2 Y - Federal/State Governance 0.58
City Policy
Development
Work on general City policies. Includes reviewing
policy changes proposed by other departments,
participating on policy development teams, and
recommending policy changes. Program 10125-
Policy Development/Compliance (Duties related
to the development of Human Resources
policies) was combined with this program.
2 Y - Federal/State Governance 0.70
Recruiting &
Hiring: Police
Officers
Civil service recruitment, testing and hiring for
Police 2 Y - Federal/State Governance 1.97
Data Analytics Provide quantitative management data of
delivered city services by organizing, managing
and extracting insights from diverse systems and
data sets. Proactively inform staff if services are
not meeting expected service levels.
2 N - Best Practice Governance 0.15
Financial
Reporting &
Analysis for
Departments
Assist departments with financial management
needs, maintain general ledger, regular reporting
to Council and Council committees. 2 Y - Federal/State Governance 0.54
Video & Fiber Staff time and supplies for video and fiber
maintenance and replacement by the City's
crew.
2 Y - City Code Community 0.80
Mandatory
Training
Trainings required by Federal, State, Local laws
and/or City of Tukwila organizational policy. 3 Y - Federal/State Governance 2.65
65
Accounts
Receivable
Accounts Receivable, billings, LID, cashiering,
treasury, banking. Track and report costs and
outstanding balances owed to the City. Maintain
Local Improvement District #33 database and
manage assessment billing.
3 Y - Federal/State Governance 1.57
Capital Asset
Accounting
Monitor, review and update capital asset records
and transactions in preparation of financial
reporting purposes including computation of
depreciation
3 Y - Federal/State Governance 0.08
Financial
Reporting: ACFR,
Audit, GL Admin
Preparation and review of annual comprehensive
annual financial report (ACFR), work with State
Auditor, continuing disclosure on EMMA and
administration of the General Ledger.
3 Y - Federal/State Governance 1.05
Grant
Administration &
Accounting
Preparation of grant related contracts;
processing invoices for payment, reviewing
department coding and data input. Reviewing
and posting change orders, pay estimates,
retainage and other transactions. Tracking and
monitoring of grant funds spent and received.
3 Y - Federal/State Governance 1.60
Long-Range
Financial Planning
Model
Update long-range model to ensure sound
financial decisions are made 3 Y - City Code Governance 0.06
Police
Professional
Standards
This program manages and maintains the Police
Department's local governing policies 3 Y - Federal/State Governance 1.56
Debt Management Support judicious borrowing by the City within
the framework of its written debt management
policy. Finance coordinates with bond attorneys,
rating agencies and other financial professionals
and provides required reporting and disclosures
to the State and investors
4 Y - Federal/State Governance 0.06
Indirect Cost
Allocation Admin
Allocate overhead costs in compliance with
Budgeting, Accounting, Reporting System
(BARS) and other authoritative guidance
(GAAP). Ensure the costs are allocated each
year
4 Y - Federal/State Governance 0.03
Investment &
Cash
Management
Investment of City funds and reporting to Council
on investment activity. 4 Y - Ord/Res Governance 0.23
Sales and Other
Tax Administration
Track and research tax revenue: sales tax,
property tax, utility taxes, gambling tax,
admissions tax, parking tax, real estate excise
tax and others ? to ensure amounts owed the
City are received by the City; analyze trends
relative to economic activity to forecast future
receipts. Stay apprised of new developments
and make recommendations for increases.
Review and update data in preparation of
financial reporting
4 Y - Federal/State Governance 1.52
Service Area: Safety and Resiliency
Program Definition Tier Required (Y/N) Type FTE
Emergency Prep
& Response
Emergency training, continuity of operations
plans, developing backup systems. Governance
program, internal facing to ensure departments
are prepared. Differs from 10074 because that
program in community facing.
1 Y - Federal/State Governance 1.07
Police Patrol
Services
Police Patrol Services is responsible for
responding to the immediate needs of the
Tukwila community. Providing a constant
presence, both during and between calls for
1 Y - City Code Community 36.06
66
service, and building the trust of the community,
the members of this program are the City's law
enforcement first responders. The employees
assigned to this program are also tasked with
nearly all facets of police work, requiring a high-
level of expertise and an ever-increasing amount
training
Investigation:
Traffic
Enforcement &
Crash
This program houses the Police Department's
Traffic Unit, which investigates serious traffic
incidents and is tasked with enforcing the City's
roadway laws
1 Y - Federal/State Community 4.50
Code
Enforcement
Seek compliance with City laws and regulations
for land use, zoning, building, housing,
landscaping and environmentally sensitive areas
2 Y - City Code Community 3.21
Community
Policing
The goal of this program is to establish a
relationship between the Tukwila Police, Tukwila
Community Members, and business owners to
allow for a more proactive police role in the
community. Patrolling on foot, bicycles, and via
traditional vehicles, this program’s activities will
develop relationships in a focused effort to
identify opportunities for cooperation and
increased safety.
2 N - Best Practice Community 4.92
Community Risk
Reduction
Fire Marshal Office: inspections, development
review and other FM services. Fire Marshal is
responsibility of City even after annexation to
RFA.
2 Y - Ord/Res Community 0.00
Critical Incident
Response
The Tukwila Police Department is an active
member of Valley SWAT/Hostage Negotiator
Team and The Valley Civil Disturbance Unit,
regional teams whose mission it is to support the
extraordinary law enforcement needs of the
participating agencies through the use of
specialized tactics and techniques. The teams
are highly trained and well-equipped to respond
to and effectively resolve a variety of high-risk
and large-scale situations.
2 N - Best Practice Community 1.65
Cyber
Security/Business
Continuity
Application of technologies, processes and
controls to protect City systems, networks,
programs, devices and data from cyber attacks.
Restore technology services to maintain critical
city services in the event of a natural disaster or
cyber security attack..
2 N - Best Practice Governance 0.89
Emergency
Management
Program
A comprehensive program for ensuring the City
and the community can mitigate against, prepare
for, respond to, and recover from emergencies
and disasters. Activities involve training all City
departments and engagement with the whole
community. This program also works with the
Police Department, the City government as a
whole, and with other area governments to
provide for continuity of operations to ensure
essential services are maintained in the event of
a large scale disaster.
2 Y - Federal/State Community 2.00
Investigation:
Felony & Juvenile
Crime
This is our Major Crimes Unit, whose primary
responsibility is to investigate a wide variety of
crimes, including homicide, robbery, burglary,
felony assault, crimes against children and the
elderly, felony theft, fraud, forgery, sexual
assault, missing persons, and matters relating to
registered sex offenders
2 Y - City Code Community 11.40
67
Investigation:
Narcotics &
Human Trafficking
This program's primary responsibility is to
investigate drug and prostitution related crimes
that affect the people of Tukwila. The unit also
addresses other crimes as assigned, often
relying on special equipment and undercover
skills to conduct those investigations.
Employees assigned to this program also
participate with a variety of local, State, and
Federal investigators in an effort to curb crime
using combined resources
2 Y - Federal/State Community 6.30
Prosecution
Services
Contracted Prosecuting Attorney services 2 Y - Federal/State Community 0.03
Animal Control The City contracts with King County Animal
Control to provide these services 3 Y - City Code Community 0.00
City Attorney
Services
Contracted City Attorney services 3 Y - Federal/State Community 0.02
Emergency
Software Services
Police emergency application support. 3 N - Best Practice Governance 0.19
Employee Health
& Safety
Accident prevention plan, safety plan. Employee
injury/illness reports. Training related to health
and safety.
3 Y - Federal/State Governance 0.27
Risk Management Maintain adequate insurance coverage for
liabilities, property, and employee errors &
omissions. Review claims and file reports as
needed. Includes WCIA insurance premiums.
3 Y - Federal/State Governance 0.05
School Zone
Safety Cameras
Program created to reduce speeding in school
zones. Includes technology equipment,
processing, and staffing for Police & the Court
3 N - Best Practice Community 3.14
Detention &
Incarceration
Services
This program covers all tasks and responsibilities
associated with bringing offenders to justice,
including the management of our relationships
with jails, courts, and all probation programs.
Includes monthly cost for SCORE.
4 Y - Federal/State Community 0.25
Evidence and
Property
Management
Proper chain of custody is imperative to
safeguarding the Department's property and
evidence system, creating better case integrity,
and returning lost or stolen items to their lawful
owners. Evidence and Property staff ensures the
proper chain of custody and evidence security,
storage and disposition for items taken in by the
Tukwila Police Department.
4 Y - Federal/State Community 2.20
Valley
Independent
Investigative
Team
The mission of this program is to conduct WAC
139-12 (LETCSA) mandated investigations
involving police use of deadly force. This is a
multi-agency program providing services for
valley agencies along with additional agencies
who have requested assistance.
4 Y - State Community 0.52
Court Support
Services
Court Support Services (known in the industry as
Probation) is a multi-faceted program that
enhances public safety by providing supervision
for people convicted of misdemeanor offenses
while increasing the chance of successful re-
entry into the community through less-restrictive
alternatives to jail, support and guidance for
clients working on meeting court conditions,
educational programming, provision of food,
clothing, and hygiene items, and connections to
community resources.
4 Y - Federal/State Community 1.64
•Appropriation –Legal authorization
granted by council to make
expenditures
•Reserved Fund Balance –balance not
available for appropriation because it
is legally restricted
•Unreserved Fund Balance –balance
available for appropriation, may also
be known as “ending” fund balance
•Inter-Fund Transfer –Flow of assets
(such as cash) without equivalent flow
in return and without requirement to
repay
More Accounting Terminology
•Inter-Fund Loan –Loan mechanism authorized between funds if legislative authority adopts, provides for concise repayment plan
•GO Debt –General obligation debt. Repayment obligation uses property tax revenues as funding source
•Revenue Debt –Typically associated with proprietary funds; repayment obligation funded with user fees
•Government accounting systems are
organized and operated on a fund basis
•Used to segregate resources related to
specific activities
•Often used to segregate restricted
resources
•Defined as a fiscal and accounting entity
with a self-balancing set of accounts
What is “Fund Accounting”?
Basic Fund Types
General
Hotel/Motel Tax
City Street (Gas Tax)
Impact Fees
Special Revenue
General Obligation
Debt Service
Arterial Street (Gas Tax)
Construction in Progress
Capital Projects
General Governmental
Water
Sewer
Storm
Electric
Golf
Enterprise
Data Processing
Equipment Rental
Print Shop
Unemployment Compensation
Internal Service
Proprietary
Trust
Agency
Pension
Permanent
Fiduciary
FUND TYPES
General Fund (aka: Current Expense)
•Chief operating fund of state/local government
•Used to account for all financial resources except those
required to be accounted for in another fund (everything not
in other funds)
•Can include sub-funds (Contingency or Reserve Fund)
Special Revenue Funds
•Account for proceeds of specific revenue sources that are
legally restricted to expenditures for specific purposes
•Tukwila Examples: Lodging tax, Drug Seizure Funds
Governmental Fund Types
Capital Projects
•Account for financial resources to be used for
acquisition or construction of major capital facilities
•Does not include capital facilities financed by
proprietary funds/trust funds
•Tukwila has a variety of capital project funds by type
Debt Service
•Account for accumulation of resources for, and payment
of, general long-term principal and interest
•Tukwila has debt service funds for its GO bonds
Governmental Fund Types (cont.)
Revenue Types:
•Taxes –
•Property tax
•Retail Sales tax
•Business & Operations and Utility taxes, gambling, leasehold, motor vehicle fuel tax, etc.,
•Charges for services
•Licenses/permits
•Intergovernmental –state shared revenues and grants
•Rental fees
•Assessments
Primary Resources of
Governmental Funds
Enterprise Funds
•Operated/financed similar to private business, where
intent of governing body is cost recovery
•Account for operations financed through user charges
•In Tukwila these are: Water, Sewer, Surface Water and the
Foster Golf Course
Internal Service Funds
•Finance goods/services provided by one
department/agency to other government departments
•Used to allocate cost of providing services to other funds
•In Tukwila: Fleet and Self-Insurance Funds
Proprietary Funds
Proprietary Funds:
*Enterprise –
Ex. Utilities
*Internal Service
Revenue Types:
•Charges for services
•Connection fees
•Sale of merchandise
•Inter-departmental costs
•Rental fees
•Assessments
•Grants/loans/bonds
Primary Resources for
Proprietary Funds
Trust & Agency Funds
•Assets held by governmental entity in trustee
capacity or as an agent for individuals, private
organizations, other governmental units, and/or
other funds
•Expendable trust funds
•Non-expendable trust funds
•Pension and Investment trust funds
•Agency funds
•In Tukwila this is the Fire Pension Fund
Fiduciary Funds
•Budgeting
•Appropriation ordinance for immediate needs
•Strategic planning (long-term)
•Reporting
•Internal and external
•Oversight (Internal Control)
•Review
•Monitoring
•Policies
Key Elements of City Finance
•Budget is economic plan that focuses
entity’s financial & human resources on
the accomplishment of specific goals &
objectives established by policymakers
•Establishes annual (or biennial)
expenditure levels for all departments &
funds
•Expenditure levels are called
appropriations & represent spending
limits
Budgeting
Mission of budget process is:
•Help decision makers make
informed choices about provision of
services and capital assets
•Promote stakeholder participation
in the process
Budgeting Mission
Source: National Advisory Council on State and Local Budgeting
Fundamentally -Budget adopted prior to start of fiscal year
Steps:
1.Request for budget estimates (RCW 35.33.031)
2.Estimates filed with Clerk (RCW 35.33.031)
3.Clerk presents preliminary estimates to CAO (RCW 35.33.051)
4.CAO presents Preliminary Budget to Legislative (RCW 35.33.135)
5.CAO files “Final Budget Proposal” with Clerk (RCW 35.33.055)
6.CAO Files “Final Budget Proposal / Budget message” with Legislative (RCW 35.33.057)
7.Publication and conduct of hearings (RCW 35.33.061 & 057 & 071; also RCW 84.55.120)
8.Legislative Adopts a Budget (RCW 35.33.075)
Requirements
Effective Government Finance
•Strategic Financial Plan
•Long-term financial stability
•Taxpayer interests
•Financial and Operational Performance Transparency
•“Conservative” financial projections
•Capital investments strategies
•General Government
•Utility
•Operating Implications
•Use of Debt
21
Sample topics to consider:
1.Type of budget (priority-based budgets)
2.Duration (annual or biennial)
3.Use of one-time resources / definition of balanced budget
4.Fund balance targets
5.Amending the budget
6.Budget calendar / approach
7.Fees / user charges
Budget Policies
This Photo by Unknown Author is licensed under CC BY
Priority Based Budgeting
•Prioritize services:
•Do the important things well
•Question past patterns of spending
•Know the true cost of doing business
•Provide transparency of community priorities
•Provide transparency of service impact
•Demand accountability for results
•Evaluate programs based on their influence in achieving the Strategic
Goals
23
Policy Elements
•Strategic focus / alignment with policy goals
•High level description of value delivered
•Budget message
•Budget “highlights” section
•Financial Policies
•Operational Elements
•Capital investments
•Debt program
Getting the Most…
Clearview, ON Strategic Goal Budgeting
Operations
•Translating policy guidance into action
1.Organization chart
2.Authorized employees (with comparison)
3.Department descriptions
1.Or similar organizational unit information
2.Goals, accomplishments, action plans, performance data
Getting the Most…
Financial Elements
•Strategic Financial Plan
1.Sources and uses of funds (including the appropriation)
1.Multiple years for comparison
2.Operating unit budgets (departments, divisions)
3.Description of revenues / basis for forecasts
4.Long-range forecast (description and schedule)
Getting the Most…
Communication Elements
•Organizational transparency (it’s other people’s money!)
1.Budget message (again)
1.Also highlights
2.Clearly organized
(include a table of contents / glossary)
3.Environmental scan (what’s changed that you are reacting to?)
4.Charts, graphs
Getting the Most…
Charts and graphs
Budget comparison
•How are year-to-date expenditures and revenue
estimates compared to budget appropriations?
•Understand what the variables are
Fund balance
•Do you have any funds with cash flow issues?
Debt analysis
•Are you considering additional debt?
•Are there interfund loans?
•Do you presently reserve for future capital needs?
Reports –What to Look For
Policy level
Senior staff level
Middle staff level
Line staff level
Transactions
Reporting “Pyramid”
•State Auditor’s Office (SAO) established
by state constitution
•RCW 43.09.200 states that SAO shall
prescribe the accounting and reporting to
be used by governmental entities
•Center for Government Innovation
“The Center”
State Auditor’s Office
•AWC (wacities.org) –workshops/training
•MRSC (mrsc.org) –webpages & trainings
•mrsc.org/financialpolicies
•mrsc.org/budgeting
•Call/email with questions
•GFOA (gfoa.org/publications)
•Publication series for elected officials
•Best practice series
•WA State Auditor’s Office (sao.wa.gov)
•The Center –performance@sao.wa.gov
•SAO Helpdesk
Resources
Questions?
City of Tukwila
2024
REVENUE
GUIDE
2
Table of Contents
Introduction .............................................................................................................................................................. 4
Taxes ......................................................................................................................................................................... 6
Property Tax .................................................................................................................................................7
Retail Sales and Use Tax ...........................................................................................................................10
Utility Taxes .................................................................................................................................................12
Interfund Utility Taxes .................................................................................................................................17
Franchise Fees ............................................................................................. Error! Bookmark not defined.
Gambling Tax………………………………………………...……………………………………………………23
Leasehold Excise Tax ................................................................................................................................23
Admissions Tax ...........................................................................................................................................25
Lodging Tax ................................................................................................................................................27
Affordable Housing Tax ............................................................................................................................29
Real Estate Excise Tax ...............................................................................................................................31
Commercial Parking Tax ..........................................................................................................................34
Business & Occupation Tax……………………………………………………………………………………..36
Licenses, Permits and Other Fees/Charges ....................................................................................................... 37
Business License Fees (including Revenue Generating Regulatory License Fees)............................38
Impact Fees ...............................................................................................................................................40
Parks & Recreation Activity Fees .............................................................................................................42
Building Permit Fees...................................................................................................................................44
Plan Check & Land Use Review Fees .....................................................................................................46
Rental Housing License .............................................................................................................................47
Intergovernmental Revenues............................................................................................................................... 48
State-Shared Revenues ............................................................................................................................49
Grants (Operating)....................................................................................................................................51
Grants (Capital) .........................................................................................................................................52
Streamlined Sales Tax Mitigation .............................................................................................................55
Fines, Penalties and Other Revenues .................................................................................................................. 57
Fines & Penalties ........................................................................................................................................58
Fire Insurance Premium Tax ......................................................................................................................60
3
Investment Income ...................................................................................................................................61
Local Improvement Districts (LIDs) ..........................................................................................................62
Enterprise Funds ..................................................................................................................................................... 63
Water Utility Charges for Service .............................................................................................................64
Sewer Utility Charges for Service .............................................................................................................65
Surface Water Utility Charges for Service ...............................................................................................66
Recap of Tax & Fee Restrictions and Uses .......................................................................................................... 67
Water Utility Charges for Service: ....................................................................................................................71
Additional Revenues for Consideration .............................................................................................................. 72
4
Introduction
Washington State laws provide cities with the power to establish and levy taxes, fees, and charges to
finance public services. The City of Tukwila collects revenue from many of these sources, and deposits
that revenue into one of the 31 funds managed by the City. The City is legally required by State law
and/or Tukwila Municipal Code to account for different revenue sources in different funds. For example,
revenues collected by water utility charges must be deposited into a Water Utility Fund and are
restricted by law to be used for financing the operating and capital needs of the water utility.
City revenues are often impacted by local economic conditions and events such as changes to laws or
precautionary measures in response to a public health emergency. In February 2020, the Governor of
the State of Washington declared a state of emergency in response to the spread of the deadly new
COVID-19 outbreak. In the months that followed the declaration, precautionary measures to slow the
spread of the virus were ordered. These measures included closing schools, cancelling public events,
and limiting attendance of public and private gatherings. As a result of these measures the City
experienced sharp declines in many revenue sources, retail sales tax revenues experienced the largest
reduction. Most industries saw declines in taxable revenues, but Retail merchandise and Service
businesses were impacted more significantly. Two of the City’s largest sales tax categories,
Clothing/Accessories & Food Services, saw declines of nearly 40% in 2020 compared to the prior
year. Overall, the City’s sales tax revenues were down by $3.6 million, or 18%, in 2020 compared to 2019
levels. Some industries were more resilient to the effects of the pandemic, with Construction,
Manufacturing, Transportation and Wholesale Trade holding steady or performing better than prior
years.
During 2021 the City has seen sales tax levels return to near pre-pandemic levels with some of the
hardest hit categories returning to levels experienced in 2019. Construction is one category where this
trend doesn’t hold true. While this category was resistant to the declines experienced by other
industries in 2020, the results of 2021 were down near 2018 revenues. The Food Services industry has
also not fully recovered, with 2021 results off by 10% from pre-pandemic levels.
The General Fund is the City’s largest fund and is used to account for most city resources. Approximately
55% of Tukwila’s General Fund ongoing revenue is derived from two sources: sales tax (29%), and
property tax (26%). The remainder of the City’s resources are derived from other tax sources, licenses
and permits, grants and state-shared revenues, fines and penalties, investment interest, and other
miscellaneous revenues.
Other major sources of revenue in the City of Tukwila include utility charges for service (accounted for
in the enterprise funds), motor vehicle fuel taxes, real estate excise taxes, impact fees assessed on new
5
construction, and excise taxes on lodging. Revenues collected from these sources are limited in purpose
and can only be used to benefit specific programs.
There are also other revenue sources that the City of Tukwila does not currently collect but may wish to
consider in the future. Those revenues are discussed at the end of this guide.
6
Taxes
7
Property Tax
Description
Property tax is a tax on all property within the City of Tukwila. This revenue
is used to support general governmental purposes. Rates are expressed in
“dollars per $1,000 of assessed value (AV)”.
Base
Collection
Method
Tax is levied on all land, buildings, residential homes, and personal property
within the city limits.
Property taxes are received daily from King County by electronic funds
transfer. The majority is collected in the 2nd and 4th quarters.
Funds GF000100-311100 – Regular Property Tax Levy
DS213100-311100 – Excess Property Tax Levy (Voter Approved Debt)
PR301800-311137 – Land Acquisition, Recreation, and Park Development
Use of Revenue
Restrictions
Supports general operations of city government and funds capital projects
not funded by other sources. Excess levy in GL Key DS213100 is used to pay
debt service costs on 2016 & 2019 UTGO bonds. Revenues for Land
Acquisition, Recreation, and Park Development are Levied by King County,
and a portion is passed thru to the City.
TMC Each year the City sets a property tax rate by ordinance
RCW 84.52.043: Establishes maximum levy rates for the various types of taxing
districts (state, counties, cities, etc.). The maximum Statutory Levy Rate for
the City of Tukwila, as allowed by RCW 84.52.043, is $3.825, which includes
$0.225 for the Firemen's Pension Fund as allowed by RCW 41.16.060;
8
Property Tax Levy Rates
The following table summarizes the local and overlapping regular and special property tax levy rates
for the City of Tukwila. Note, most of the parcels in the City of Tukwila are also in the Tukwila School
District, but there are five other school districts within the city limits.
2023
Direct Regular & Special Levies
City of Tukwila (General Levy) 1.94728
City of Tukwila (Special Levy) 0.50506
Total Direct Regular & Special Levies 2.45234
Overlapping Regular & Special Levies
Tukwila School District 3.69839
Washington State 2.31104
King County (includes KC Library District tax) 1.36024
Port of Seattle 0.09429
Emergency Medical Services 0.20922
Sound Transit 0.15576
Flood Control 0.06717
Tukwila Pool Metropolitan Park District 0.15033
Hospital District #1 0.29817
Subtotal – Overlapping Levies 8.34461
TOTAL DIRECT & OVERLAPPING
LEVIES $10.79695
source: King County Assessor’s Office
84.55.010: Establishes a limitation on the increase in regular property taxes
for taxing districts.
9
Property tax growth is attributed to an annual 1% growth as allowed by law plus new construction and
the addition of a special levy. The Excess Property tax levy for the voted debt will expire when the bonds
are paid in full (final payment on bonds is 2038).
Property Tax Levy Rates vary significantly throughout our city depending on the applicable local and
overlapping regular and special property tax levy rates for the City of Tukwila. Below are all applicable
Levy codes within the City of Tukwila; Levy code 2413 is the Tukwila School District.
10
Retail Sales and Use Tax
Description Revenue from Retail Sales Tax is used to support general city services and
local street repair & maintenance. The sales tax rate for the City of Tukwila
effective for 2023 is 10.1%. While our total tax rate is 10.1% the Local tax rate
received by the City of Tukwila is 0.84%. The criminal justice sales tax is
enacted county-wide, and Tukwila receives its proportionate share.
Base
Collection Method
Sales tax is imposed on all personal and business purchases of tangible
property. The natural gas use tax is collected from the sale of brokered
natural gas.
The Washington Department of Revenue distributes funds monthly to the
City by electronic funds transfer.
Funds
Use of Revenue
Restrictions
TMC
GF000100-313110– Local Retail Sales & Use Tax
GF000100-313610– Natural Gas Use Tax
GF000100-313710– 0.1% voter approved Criminal Justice Sales Tax
Local sales tax revenues are unrestricted and can be used for any lawful
governmental purpose.
Criminal justice sales tax revenue must be used on activities that substantially
assist the criminal justice system.
There is imposed a sales or use tax, as the case may be, upon every taxable
event Sales taxes apply to most retail sales of “tangible personal property”
within Washington.
3.12: Authorizes the sales and use tax rate of 0.50%.
3.16: Authorizes additional sales and use tax rate of 0.50%.
RCW 82.14: Authorizes a city to tax all taxable retail sales and use events.
82.12: Requires that a “use tax” be calculated and paid to make up the
difference if the sales tax paid is less than the rate being levied within the
local jurisdiction.
82.14.340: Authorizes the County legislative authority to impose additional
sales and use tax for criminal justice purposes and the state is required to
distribute monies proportionately to the counties & cities based on
population
82.14.530 Any county may impose a sales tax up to 0.1% for affordable
housing, and any city or town may impose this sales tax if the county has not
done. The affordable housing sales tax has been imposed for Tukwila and
King County since 2019.
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Historical Data
Sales tax rate increased from 9.5% to 10.0% in April 2017. The latest increase
to 10.1% in 2021 was the County’s councilmanic one-tenth for health through
housing.
12
Utility Taxes
Description Utility taxes are charged on cable television, telephones, electricity and
natural gas consumption, and solid waste and recyclable materials collection
services.
Base
Collection Method
Tax is based on gross revenues from the operation of a public or privately-
owned utility.
Utility providers remit payments monthly, Quarterly and Annually by check
depending on size of gross revenues.
Fund
Use of Revenue
Restrictions
GF000100-316410 – Electric Utility Tax
GF000100-316430 – Natural Gas Utility Tax
GF000100-316450 & 316451 – Solid Waste Utility Tax
GF000100-316460 – Cable Utility Tax
GF000100-316470 – Telephone Utility Tax
Utility tax revenues are unrestricted and may be used for any lawful
governmental purpose.
Utility Type Tax Rate Limit per
RCW
Tukwila Tax Rate
Electric 6.0% 6.0%
Natural Gas 6.0% 6.0%
Solid Waste/Recycling No Limit 16.0%
Cable 6.0% 6.0%
Telephone 6.0% 6.0%
TMC
3.50: Authorizes tax on electric energy, natural or manufactured gas,
telephone, or cable television business within the City effective 2/1/2003.
3.51: Authorizes tax on solid waste collection businesses within the City
effective 10/1/2009. TMC 3.51.40 increased Solid waste tax from 6% on
November 1, 2019, said tax rate increased to 11%, and then increased to 16%
effective July 1, 2020.
13
RCW 35.21.870: Establishes a city’s authority to assess a utility tax on electricity,
telephone, natural gas, or steam energy and limits the tax to a maximum of
6.0%.
82.14.230: Establishes a city’s authority to impose a natural or manufactured
gas use tax. Effective July 1, 2015, natural gas sold or used as transportation
fuel is exempt from this tax.
82.18: Establishes a city’s authority to assess a solid waste utility tax.
14
15
Amounts received related to the tax increase in November 2019 and July 2020 are dedicated to street
projects.
16
17
Interfund Utility Taxes
Description Interfund utility taxes are charged on revenues received from city utilities,
including water, sewer, and surface water. Utility tax revenues are used to
support general city operations.
Base
Collection Method
Total revenues from city utility funds.
Finance staff prepare an interfund transfer monthly from the enterprise
funds to the General Fund.
Fund GF000100-316452 – Interfund Utility Tax – Water
GF000100-316454 – Interfund Utility Tax – Sewer
GF000100-316458 – Interfund Utility Tax – Surface water
Use of Revenue
Restrictions
TMC
Utility tax revenues are used to support general city operations.
Utility Type Tax Rate Limit per
RCW
Tukwila Tax Rate
Water No Limit 10.0%
Sewer No Limit 10.0%
Surface Water No Limit 10.0%
3.54: Establishes City’s authority to assess a 10.0% city utility tax. Such tax
shall be effective from May 1, 2010, through December 31, 2021.
RCW 35.22.280: Authority to levy and collect utility taxes.
82.16: Defines public utility tax.
Historical Rates 10.0% rate in effect from 5/1/2010 – 12/31/2021; and has been extended
Another 6 years to 12/31/2027
15.0% rate in effect from 12/31/2008 – 4/30/2010
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19
Franchise Fees
Description Franchise fees are fees levied on public and private utilities for the right to
use city properties, such as streets and alleys, and the term is also often used
to describe the fees imposed to recoup the costs of administering the
agreements.
Base
Collection Method
Revenues can be based on gross revenues or a one-time administrative fee
from the operation of a public or privately-owned utility. The fee structure
will be defined in each individual franchise agreement.
Utility providers remit payments monthly, quarterly or annually by check or
ACH depending on the established franchise contract.
Fund
Use of Revenue
GF000100-321910 – Franchise Fees
GF000100-321911 & 321912 – Small Cell Franchise fees
GF000100-337080 – SCL Franchise agreement
Franchise Fee revenues are unrestricted and may be used for any lawful
governmental purpose.
TMC Various ordinances will be enacted with each franchise fee contract.
RCW 35A.47.040: Establishes a city’s authority to enter into franchise
Agreements. RCW 35.21.860 eliminates the city’s authority to impose a
franchise fee on light and power, natural gas distribution, and telephone for
the use of the city right-of-way.
20
21
Gambling Tax
Description While gambling activities are allowed within the city limits, taxes may be assessed
on amusement games, bingo and raffles, punch boards and pull tabs, and social
card games.
Base
Collection
Method
Based on gross or net receipts of gambling within the city limits, as prescribed by
State law and TMC. Net receipt is defined as gross receipts less amounts awarded
as cash and merchandise. Currently we have 4 card room establishments.
Gambling establishments remit tax proceeds to the City monthly by check.
Fund
GF000100-316810 – Punch Boards & Pull Tabs
GF000100-316820 – Bingo & Raffles
GF000100-316830 – Amusement Games
GF000100-316840 – Card Games
Use of Revenues
Restrictions
RCW 9.46.113 states that gambling tax revenue must first be used for the purpose
of public safety.
Gambling Activity Type Tax Rate Limit per RCW Tukwila Tax Rate
Amusement Games 2% of net receipts 1 2% of net receipts
Amusement Games –
Charitable or Non-Profit
2% of net receipts
(>$5,000 in net receipts),
2% of net receipts
Bingo & Raffles 5% of net receipts 5% of net receipts
Punch boards & Pull tabs
5% of gross receipts, or
10% of net receipts
5% of gross receipts
Punch boards & Pull tabs –
Charitable or Non-Profit
10% of net receipts 10% of net receipts
Social Card Games
1-5 Card Rooms 20% of gross receipts 11% of gross receipts
6 Card Rooms 20% of gross receipts 15% of gross receipts
7+ Card Rooms 20% of gross receipts 20% of gross receipts
TMC
1 Net receipts is defined as gross receipts less amounts awarded as cash and merchandise.
3.08: Authorizes the city to tax any person, association or organization engaging
in gambling activities pursuant to a state license.
RCW 9.46.110: Authorizes this tax on gross receipts of gambling activities.
9.46.113: States that the tax collected on gambling activities must be used
primarily for public safety.
22
In 2019 the ‘Card Room’ gambling tax rate was increased from 10% to 11% of gross revenues.
23
Leasehold Excise Tax
Description The City levies an excise tax on occupying or private use of publicly owned
real or personal property.
Base
Collection Method
Property owned by the State, counties, school districts, and other municipal
corporations are subject to leasehold excise tax. The State rate is 12.84% of
which 4.0% is returned to the City. In Tukwila, leasehold excise tax is collected
on billboards, airspace, and private office space on city-owned property.
The Washington Department of Revenue, after deducting an administrative
fee, distributes taxes back to the City bi-monthly via electronic funds transfer.
Fund GF000100-317200 – Leasehold Excise Tax
Use of Revenue
Restrictions
Leasehold excise tax revenues are unrestricted and may be used for any
lawful governmental purpose.
RCW 82.29A.125-138 outlines various real and personal property types that
are exempt from leasehold excise tax.
TMC Ordinance 1062 establishes the City tax rate of 4.0%.
RCW 82.29A.040: Grants authorization to cities to levy and collect a leasehold tax,
up to a maximum of 4.0%.
82.29A.080: Authorizes the Department of Revenue to deduct a percentage
amount, not to exceed two percent of the taxes collected, for administrative
and collection expenses incurred by the department.
82.29A.090: Distributions are made by the Department of Revenue.
24
25
Admissions Tax
Description This tax is levied on admission charges to entertainment venues, and any
other activity where an admission charge is made to enter a facility.
Base
Collection Method
A 5.0% admission tax is levied on charges for general admission, season
tickets, and cover charges. A minimum drink or participation cost in lieu of a
cover charge is also subject to admission tax.
Venues that charge admission fees remit taxes to the City monthly by check.
Fund GF000100-318110 – Admissions Tax
GF000100-318111 – Golf Admissions Tax
Use of Revenue
Restrictions
Admissions tax revenues are used to support general city operations.
There are no restrictions on the use of revenue. However, the maximum rate
the City can levy is 5.0%.
TMC 3.20: Establishes City’s authority to levy tax on admissions for entertainment
purposes.
RCW 35.21.280: Authorizes a city to establish a tax on admissions.
Historical Rates Beginning in 2019, admission tax collected by the golf course will remain in
the golf course fund (411).
26
27
Lodging Tax
Description The lodging tax is levied on all lodging in hotels, rooming houses, tourist
courts, motels, or trailer camps within the City of Tukwila.
Base
Collection Method
Applies to the sale or charge made for furnishing lodging by a hotel, rooming
house, tourist court, motel, or trailer camp. The state maximum lodging tax
rate is 2.0%, however most cities in King County are limited to 1.0% as the
other 1.0% is allocated to the debt payment for T-Mobile Park and Lumen
Fields.
The Washington Department of Revenue distributes funds monthly to the
City by electronic funds transfer.
Fund
Use of Revenue
Restrictions
MR101300-313310– Lodging Tax Special Revenue Fund
Lodging tax revenue is used for the sole purpose of paying costs of tourist
promotion activities.
RCW 67.28.1816 restricts the use of lodging tax revenues for:
(1) tourism marketing; or
(2) marketing and operation of special events designed to attract
tourists; or
(3) supporting the operations and capital expenditures of tourism-
related facilities.
TMC 3.40: Authorizes a tax of 1.0% on lodging
RCW 67.28.120: Authorizes cities to acquire and operate tourism-related facilities.
67.28.180: Authorizes the lodging tax – identifies the maximum rate of 2.0%.
28
29
Affordable Housing Tax
Description The Affordable Housing tax, established in 2019, is enacted to affordable
housing incentive programs providing the development of low-income
housing units through development regulations or conditions on rezoning or
permit decisions, or both, on one or more of the following types of
development: residential, commercial, industrial, or mixed-use.
Base
Collection Method
An affordable housing incentive program may include, but is not limited to,
one or more of the following:
(i) Density bonuses within the urban growth area.
(ii) Height and bulk bonuses.
(iii) Fee waivers or exemptions.
(iv) Parking reductions.
(v) Expedited permitting.
(vi) The city or county may enact or expand such programs whether
the programs may impose a tax, fee, or charge on the development or
construction of property.
The Washington Department of Revenue distributes funds monthly to the
City by electronic funds transfer.
Fund
Use of Revenue
Restrictions
AS004201-313270 – Affordable Housing Tax
Affordable Housing tax revenue is used for the sole purpose of developing
low-income housing, including support provided through loans or grants to
public or private owners or developers of housing. The City has partnered
with the South King Housing and Homelessness Partners (SKHHP) to provide
a portion of the affordable housing tax revenues for regional housing project.
RCW 36.70A.540 restricts the use of Affordable Housing tax revenues for
support of the development of low-income housing.
TMC Chapter 3.14 Sales and Use Tax for Affordable Housing: Imposes the sales tax
as authorized by Washington State and provides the allowed uses for the tax.
RCW 36.70A.040: Allows jurisdictions to enact or expand affordable housing
incentive programs providing for the development of low-income housing
units through development regulations or conditions on rezoning or permit
decisions, or both.
30
The Affordable housing tax was enacted in 2019
31
Real Estate Excise Tax
Description Real Estate Excise Tax (REET) is imposed on the sale of property located
within the corporate limits of the City of Tukwila and is dedicated for local
governmental capital projects.
Base
Collection Method
Sales of property measured by the full selling price, which must include any
liens, mortgages, or other debt. These monies must be used solely for
financing capital projects specified in a capital facilities fund.
The tax is due at the time of sale and is collected by the county when the
documents of sale are presented for recording; the Washington Department
of Revenue distributes funds monthly to the City by electronic funds transfer.
Fund
Use of Revenue
Restrictions
PW104100-318350 – REET 2
PR301800-318340 – REET 1
REET 1 revenues are restricted and may only be used for certain purposes
which depend on the City’s population and whether the city is planning under
the Growth Management Act.
REET 2 revenues are restricted for “capital projects” as identified in the City’s
comprehensive land use plan.
In November 2016, the voters of the City of Tukwila approved the public
safety plan which includes a bond. Since that time, the City has designated
the first $500,000 of REET 1 annually to be placed in fund 305-Public Safety
Plan-Voter approved Project. This allotment is legislated thru 2043.
REET 1 REET 2
Administrative facilities, bridges,
domestic water systems, fire
protection facilities, libraries, parks,
recreational facilities, flood control
projects, sewer systems, sidewalks,
storm systems, street lighting,
traffic signals and trails.
Bridges, domestic water systems,
highways/roads/streets, sewer
systems, sidewalks, storm systems,
street lighting, traffic signals, and
park improvements.
Source: RCW 82.46.010
Source: RCW 82.46.035
32
TMC
3.56: Authorizes the City to impose tax of 0.25% of the selling price on each
sale of real property within the corporate limits of Tukwila (REET 1) with
proceeds placed in Fund 301.
3.60: Authorizes the City to impose tax of 0.25% of the selling price on each
sale of real property within the corporate limits of Tukwila (REET 2) with
proceeds placed in capital or debt service fund.
RCW 82.46.010: Authorizes a city to impose an excise tax of 0.25% on each sale of
real property that shall be used for local capital improvements (REET 1).
82.46.035: Authorizes the imposition of an additional 0.25% excise tax to be
used for local capital improvements (REET 2).
The state rate used to be a flat 1.28% of the purchase price. However,
effective January 1, 2020, the state implemented a graduated REET tax scale
based on the selling price of the property (RCW 82.45.060):
1.1% on the portion of the selling price that is $500,000 and less.
1.28% on the portion of the selling price that is greater than
$500,000 and less than or equal to $1.5 million.
2.75% on the portion of the selling price that is greater than $1.5
million and less than or equal to $3 million; and
3.0% on the portion of the selling price that is greater than $3
million.
These sale price thresholds will be adjusted by the state Department of
Revenue effective January 1, 2023, and every four years thereafter. The
lowest threshold ($500,000) will be adjusted based on the growth of the
Consumer Price Index for All Urban Consumers (CPI-U) for shelter or 5%,
whichever is less, and rounded to the nearest $1,000. If the CPI growth is
negative, the threshold will remain unchanged. The remaining sale price
thresholds will be increased by the same dollar amount as the lowest
threshold.
33
Real Estate Excise taxes are received based on property/land sales and as such, is a highly volatile
revenue source.
34
Commercial Parking Tax
Description Commercial Parking Tax is imposed on commercial parking businesses that
charge a fee for parking or allowing vehicles to be parked. This also includes
instances where a hotel guest is charged a fee to park their vehicle during
days they are no longer staying at the hotel.
Base
Exemptions
Collection Method
The tax is levied on gross receipts from non-exempt commercial parking
businesses at a rate of 15%. There is an added 10% penalty for payment
delinquent 15 days after the due date per month for each month overdue.
1. Local employee parking, with parking spaces provided or reserved for
use by an employee who works within the City, where the employee parks
his or her vehicle in connection with his or her employment, without regard
to whether arrangements or payment for the parking is made by the
employee or by his or her employer.
2. Apartments and condominiums, where parking is provided in
conjunction with arrangements for residential living spaces.
3. Offices, retail establishments, warehouses, and industrial buildings,
where parking is provided in association with tenant arrangements for the
use of such facilities.
Businesses that charge for parking remit taxes to the City monthly.
Fund
Use of Revenue
Restrictions
PW104100-318120 – Arterial Street Fund-Parking Tax
Commercial parking taxes must be used for transportation purposes as
defined in RCW 82.80.070.
No cities may use commercial parking tax revenues to replace, divert, or loan
any revenues currently being used for transportation purposes to non-
transportation purposes.
TMC Chapter 3.48: Authorizes the City to impose a tax on businesses that charge
a fee for parking, effective 2017. In 2019 the tax rate was step-increased
each year, currently the rate is 15% of gross revenues.
RCW 82.80.030: Allows cities to impose a commercial parking tax. Each
municipality may charge any rate they choose and develop their own rules
for collection. Revenue must be restricted for transportation purposes.
35
The Commercial parking tax rate was assessed at 5% of gross revenues through 2018. In 2019 the City
implemented a stepped increase schedule with the 2019 rate increased to 8%, in 2020 it went up to 11%
and in 2021 was increased to the current rate of 15%.
36
Business and Occupation Tax
Description Business and occupation (B&O) tax is broadly imposed on all business
activities within the City unless the activities are specifically exempt.
Base
Exemptions
Collection Method
The tax is levied on the gross income of the business attributable to Tukwila.
The income attribution method is set forth in such a manner to ensure that a
gross receipts tax is not paid twice on the same income in multiple
jurisdictions. The tax rate for retail activities is 0.05% and for other activities
is 0.085%.
Numerous exemptions are set forth in TMC 3.26.090. Some exemptions are
mandated by the state, while others have been adopted at the City’s
discretion. Examples include sales of real estate, motor vehicle fuel, and
credit unions.
B&O tax is generally remitted quarterly. The business may be assigned to file
returns annually or be required to file returns monthly, at the City’s
discretion.
Fund
Use of Revenue
Restrictions
GF000100-316100 – Business and Occupation Tax
B&O tax revenues are used to support general City operations.
There are no restrictions on the use of revenue. However, the maximum B&O
tax rate the City can levy without voter approval is 0.02%.
TMC TMC 3.26 establishes the City’s authority to levy B&O tax. TMC 3.27 provides
administrative provisions to aid the City in administering and enforcing the
tax.
RCW RCW 35.102 allows cities to impose B&O tax and provides certain
requirements, such as following the mandatory provisions of the model
ordinance.
Revenues The tax took effect January 1, 2024. It is expected to raise $3.23 million in 2024.
37
Licenses, Permits and
Other Fees/Charges
38
Business License Fees (including Revenue Generating Regulatory License Fees)
Description Businesses licenses are required for businesses that are located within the City
or that operate temporarily within the City.
Base
Collection Method
Every business enterprise, including those with a temporary or portable sales
location, shall first obtain (1) a state business license, and (2) a city business
license, both available from the Department of Revenue, Business Licensing
Service (BLS) division; Business Licenses are valid for 1 year upon the issuance
date. The annual fee for a business license is based on the number of full-time
and part-time employees working in the City.
The Washington Department of Revenue collects license fees on behalf of the
City and distributes funds to the City multiple times each month by electronic
funds transfer.
Fund GF000100-321990 – Business License Fees
Use of Revenue
Restrictions
TMC
Business license fees are generally designed to recover the administrative costs
of registering businesses, such as issuing licenses and maintaining files.
Business License Fees are receipted into the General Fund.
Cities may charge a flat or tiered fee for business licenses, but the fees charged
should be fair and bear a reasonable relation to the costs.
Title 5 of the Tukwila Municipal Code provides for regulation and enforcement
of business licenses.
RCW 19.02: Establishes business regulations.
35.90: Requires any city with general business license to partner with BLS.
Historical Rates Effective January 1, 2019, the City entered into a service agreement with the
WA State Department of Revenue BLS to process the City’s general business
licenses. The licensing rates are as follows:
BUSINESS LICENSE FEE 2018 2019 2020/21
Per full-time employee $70 $91 $112
Per part-time employee $35 $45 $56
Prior to 2018, fees were calculated on full-time equivalent (FTE) employee
hours and included (1) an annual license fee, and (2) a revenue generating
regulatory license (RGRL) fee (the RGRL fee, or “head tax” was eliminated in
2017). Beginning in 2018, a combined business license fee was implemented.
39
In March of 2019 business license processing was transferred to the State. This resulted in a spike in the
2020 revenues due to realigning license terms/expiration dates to State licenses.
40
Impact Fees
Description
Impact fees are used to mitigate costs associated with city growth and are
imposed on development permits. Impact fees are collected with the permit
application unless a deferral agreement is executed pursuant to the TMC.
Base
Collection Method
Impact fees are charged on development occurring within the City of Tukwila.
Fees are collected from the applicant at the time the building permit is issued.
Fund
PW104100-345840 – Arterial Street Fund (Traffic Impact Fees)
PR301800-345851 – Land Acquisition Fund (Park Impact Fees)
FD304100-345852 – Fire Improvement Fund (Fire Impact Fees)
Use of Revenue
Restrictions
TMC
Revenues may be used for:
(1) Transportation – public streets and roads
(2) Parks – publicly owned parks, open space, and recreation facilities
(3) Fire Protection – fire protection facilities – currently dedicated to the
Public Safety Plan
Impacts fees cannot:
(1) be used to fund operating and maintenance costs or private capital
facilities; and
(2) exceed a proportionate share of the system improvements; and
(3) be relied on solely to fund the improvements.
(4) Must be spent within 10 years of collection
Authorizes the City to impose impact fees on development in Tukwila to fund
facilities that serve the additional growth in the City as follows:
9.48: Transportation Impact Fees
16.28: Park Impact Fees
16.26: Fire Impact
RCW
82.02.050-110: Establishes regulations pertaining to impact fees.
41
Impact Fees are dependent on growth within the City. In years of higher development activity all impact
fees tend to increase, but not at the same rate.
42
Parks & Recreation Activity Fees
Description
Park fees include charges for services at Foster Golf Links, recreational
classes, athletic leagues, senior center activities, concession sales and special
events. The City largely reduced/eliminated P&R fees during the pandemic to
support the community
Base
Collection Method
Parks and Recreation department programs and facilities associated with a
fee.
Fees are collected from participants during the registration process.
Fund
Use of Revenue
PR007100-3476xx – General Fund (Recreation Program Fees - Admin.)
PR007203-3476xx – General Fund (Recreation Program Fees - Teen)
PR411680-347xxx – Foster Golf Course (Greens Fees & Instruction)
PR411680-362xxx – Foster Golf Course (Rental Fees & Concessions)
Parks and Recreation revenues are unrestricted and may be used for any
lawful governmental activity.
TMC
Resolution 1980 – Golf Course Fees
The Parks and Recreation Director has authority to change parks and
recreation fees (including golf) as they see fit.
RCW
67.20.010: Gives cities the authority to acquire and operate certain
recreational facilities.
43
44
Building Permit Fees
Description
Building permit fees include basic building, mechanical and electrical permit
fees. Additional permit fees include plumbing, alarm permits, excavation,
electrical inspection permits, street/curb permits, and other permits.
Base
Collection Method
Fees are assessed on individuals, organizations, or businesses that purchase
permits for construction and/or building related activities.
Permit fees are collected from applicants during the application process.
Fund
Use of Revenue
CD008100-322100 – General Fund (Building Permits)
CD008100-322101 – General Fund (Electrical Permits)
CD008100-322102 – General Fund (Mechanical Permits)
CD008100-322103 – General Fund (Plumbing/Gas Permits)
Building permit fees are unrestricted and may be used for any lawful
governmental purpose.
TMC
Resolution 1947 adopted a consolidated permit fee schedule; Resolution
2012 updates the City's Consolidated Permit Fee Schedule to clarify fees for
tree and landscape permit regulations and zoning verification letters; as well
as “Wireless Communication Facilities;”
RCW
19.27.031: Adoption of the State Building Code by all cities and counties.
19.27.100: Authorizes a city, town, or county of the state to impose fees
different from those set forth in the State Building Code.
45
46
Plan Check & Land Use Review Fees
Description
Revenues in this category include fees charged to developers for plan
checking and land use review.
Base
Collection Method
Fees assessed on individuals, organizations, or businesses to review building
permit plans, and fees for zoning, land use and subdivision approvals.
Plan check and land use review fees are collected from applicants during the
application process.
Fund
Use of Revenue
CD008100-34583x – General Fund (Plan Check & Review Fees)
These fees are unrestricted and may be used for any lawful governmental
purpose.
TMC
16.04.020: Adoption on 02/1/2021 of the 2018 International Building Code;
Resolution 2012 contains the City’s consolidated permit fee schedule.
RCW
19.27.031: Adoption of the State Building Code by all cities and counties.
19.27.100: Gives cities the authority to impose fees different from the State
Building Code.
This revenue is highly dependent on new construction or tenant improvements and can vary greatly
from year-to-year.
47
Rental Housing License
Description
Tukwila requires all owners of residential rental property to obtain an annual
Rental Housing Business License, and an inspection of every unit once every
four years.
Base
Collection Method
This requirement applies to large multi-family developments all the way
down to single-family houses, condominiums, and Accessory Dwelling Units
(mother-in-law apartments) which are rented to tenants.
Rental license fees for existing units are collected beginning January 1 each
year while fees for new rental units are collected prior to occupancy.
Funds General Fund 000 -CD008100-322104
TMC
5.06: Establishes Residential Rental Housing Business License and Inspection
Program
RCW
59.18.125: Provides authority for local municipalities to require that
landlords provide a certificate of inspection as a business license condition.
48
Intergovernmental
Revenues
49
State-Shared Revenues
Description
State-shared revenues are collected by the State and then distributed to
cities based upon crime rate and/or population. Included in this category are:
1. Criminal Justice Funding
2. Liquor Excise Taxes & Liquor Control Board Profits
3. Marijuana Excise Tax
Base
Collection Method
1. State money for criminal justice is distributed to Tukwila based on
crime rate and population.
2. Liquor excise taxes are based on the sale of spirits in their original
package.
3. Marijuana taxes are based on the sale of marijuana in the State of
Washington.
State-shared revenues are remitted quarterly from the State Treasurer’s
Office by electronic funds transfer.
Fund GF000100-33662x – Criminal Justice Funding
GF000100-336641 – Marijuana Excise Tax
GF000100-336694 – Liquor Excise Taxes & Liquor Board Profits
Use of Revenue
Restrictions
These revenues are restricted for funding local law enforcement activities.
Revenues may not be used to supplant or replace existing funding. In
addition, statutory restrictions on use of all criminal justice monies are
additionally subject to review by the State auditor to determine compliance.
RCW
1. Criminal Justice Funding
a. 82.14.320: Municipal criminal justice assistance account –
eligibility and use requirements.
b. 82.14.330: Municipal criminal justice assistance account –
distribution based on crime rate and/or population.
2. Liquor Excise Taxes & Liquor Control Board Profits
a. 82.08.150: Established the tax rate on sales of liquor.
b. 82.08.170: Distribution of funds based on population.
c. 66.24.620: Authorized privatization of liquor sales and
distribution effective June 1, 2012.
3. Marijuana Excise Tax
a. 69.50.101: Defines marijuana.
b. 69.50.540: Creates the dedicated marijuana account and
defines appropriations.
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Criminal Justice, Marijuana and Liquor Excise Tax 10 year history.
51
Grants (Operating)
Description
Types
The City of Tukwila actively seeks Federal, State, and local grant funding for
a variety of programs that benefit the city, such as transportation
improvements, human services, park programs, and police services.
Operating Grants are normally in the General Fund (000) for general
governmental programs
Base
Collection Method
Grants are based on existing programs and competitive applications. Often
there are matching fund requirements to acquire funding.
Most granting agencies remit grant funds to the City on a reimbursement
basis either by check or electronic funds transfer. Occasionally, the City will
receive grant funds prior to being spent, however this is the exception.
Funds Most commonly in the General Fund (000)
TMC
Grants are applied for and approved by City Council.
RCW
n/a
Operating Grant revenue is dependent on availability of funds and selection/award by granting agencies.
Recently, due to the impacts of the pandemic, ARPA and CARES Act grant funds have provided by the
Federal Government to help offset some of those impacts.
52
Grants (Capital)
Description
Types
The City of Tukwila actively seeks Federal, State, and local grant funding for
a variety of programs that benefit the city, such as transportation
improvements, human services, park programs, and police services.
Capital Grants are usually received in proprietary type funds which are
designated for capital assets, improvements, and other such infrastructure.
Base
Collection Method
Grants are based on existing programs and competitive applications. Often
there are matching fund requirements to acquire funding.
Granting agencies remit grant funds to the City on a reimbursement basis
either by check or electronic funds transfer.
Funds Varies but typically in the Capital Project funds (103, 104, 30x) and Utility
funds(4xx’s)
TMC
Grants are applied for and approved by City Council.
n/a
Capital Grant revenue is dependent on availability of funds, applicable projects and selection/award by
the granting agency. In 2020 the City utilized CARES Act funds to offset additional costs for pandemic
related safety measures on multiple public safety plan projects that were in process at the time.
53
Motor Vehicle Fuel Tax
Description
These are state-shared revenues distributed to cities primarily for road
repair. The state motor vehicle fuel tax is 49.4 cents per gallon and the City’s
share is just under 3 cents per gallon, plus additional quarterly distributions
based upon population (per legislation passed in 2015). In addition, effective
beginning in 2016, the City receives the Multimodal Transportation revenue,
which is a result of the 15-year Transportation Package that was passed in
2015.
Base
Collection Method
The state Motor Vehicle Fuel Tax (MVFT) rate is 49.4 cents per gallon.
Fuel taxes are remitted to the City monthly from the Department of
Revenue by electronic funds transfer. Multimodal revenues are distributed
quarterly.
Fund
Use of Revenue
Restrictions
PW103100-336087 / PW104100-336087 – Motor Vehicle Fuel Tax
PW103100-336071 / PW104100-336071–Multi-Modal Transportation
MVFT revenues must be placed in a designated city street fund and used for
highway or street purposes as outlined in RCW 47.24.040. Multimodal
revenue may be spent on any transportation purpose.
Cities must use at least 0.42% of MVFT funds for pedestrian, equestrian, or
bicycle trails, unless such amount would be less than $500 per year.
TMC
Authority is established by the Revised Code of Washington (RCW).
RCW
46.68.090: Distribution of statewide fuel taxes.
47.24.040: Expenditures of MVFT to the street fund.
47.30.050: Expenditures of MVFT to paths and trails.
47.66.070: Multimodal transportation account.
82.38.030: Establishes rate of tax.
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55
Streamlined Sales Tax Mitigation
Description
The Streamlined Sales Tax (SST) Mitigation revenue source was implemented
in 2008 as a way for cities to offset the negative fiscal impact of the
Streamlined Sales and Use Tax Agreement (SSUTA), also known as
“destination sourcing.” Since sales tax is credited at the point of delivery
(instead of the point of origin), Tukwila is one of several cities that lost
significant revenue and now receives a mitigation payment from the
Washington State Department of Revenue to compensate for this loss.
Payments were set to expire October 1, 2019, for all cities; however, the
legislature extended payments for some cities (including Tukwila) through
June 30, 2021.
Due to the Pandemic, there was a pause that the Legislature corrected
through a one-time payment. During the 2020 Legislative session, ESSB 6168,
Section 713 ended SST Mitigation payments on June 30, 2020.
During the 2021 Legislative session, ESSB 5092, Section 1712 provided a one-
time lump sum distribution equal to the amount of payments that would
have been made between June 30, 2020 and July 1, 2021. During this session,
the Legislature also passed ESHB 1521 which extended the payments so that
the last payment will be made June 30, 2026.
Base
Collection Method
Through June 30, 2020, a jurisdiction’s revenue loss is based on a business-
by-business comparison of sales patterns in each jurisdiction before and after
the change to destination-based sales tax.
Payments are calculated by adding the gain from the voluntary compliance
revenue and marketplace facilitator/remote seller revenue to the total loss
in revenue, resulting in a net revenue amount. If the net revenue is a loss
(negative) the jurisdiction will receive a mitigation payment.
Beginning July 1, 2021, quarterly mitigation payments equal the payment
made on June 30, 2020, for cities that received a payment of $60,000 or more
on June 30, 2020.
Beginning July 1, 2022, quarterly mitigation payments are reduced by 20% of
the previous year’s payment for the same quarter.
Streamlined Sales Tax mitigation is remitted to the City quarterly from the
Department of Revenue by electronic funds transfer.
Fund
GF000100-336099 – Sales Tax Mitigation
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Use of Revenue
Restrictions
SST mitigation payments are unrestricted and may be used for any lawful
governmental purpose.
Tukwila had dedicated these funds for use on the Public Safety Plan as they
are considered one-time revenues. When they were reinstated, action was
taken to direct them to the general fund as a partial offset to the effects of
the pandemic.
TMC
N/A
RCW
RCW 82.14.495 – .500 enacts distributions from the state to help compensate
local jurisdictions for sales tax revenues lost.
Streamlined Sales Tax Mitigation revenue is based on a state formula, which decreases payments by 20%
per year. Future years have been included to provide the remaining expected payments, which phase
out in 2026.
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Fines, Penalties and
Other Revenues
58
Fines & Penalties
Description
Fines and penalties are assessed upon individuals violating City code.
Included in this category are fees for false alarms, parking violations, traffic
misdemeanors, and other civil and criminal infractions. Also included are late
fees for City-imposed taxes and fees that are remitted late.
Base
Collection Method
Persons who violate municipal laws which are punishable by fine or fee
within the City of Tukwila.
Traffic infraction revenues are remitted to the municipal court. A portion of
the proceeds are remitted to the State and King County and the City keeps
the remainder.
Fund
Use of Revenue
MC009100-35x
CD008100-35x
GF000100-35x
PD010250-35x
– Various accounts in the General Fund
Traffic and parking fines are unrestricted and may be used for any lawful
governmental purpose.
Recent state legislative changes have resulted in changes in how certain fines
and penalties can be levied by the court.
The School zone speed cameras program revenue is designated to support
the related expenses from that program. Resolution 2909 specifies any
additional revenue above program costs will be dedicated to efforts to
improve traffic and pedestrian safety in school zones.
TMC
RCW
46.63.110 – Various chapters in Title 8 (Public Peace and Safety) and Title 9
(Vehicles and Traffic) authorize the City to impose penalties for code
violations.
Chapter 9.53 Automated Traffic Safety Cameras in School Zones: authorized
the use of automated traffic cameras to detect and record vehicle violations
in school zones within the City.
Various sections governing civil penalties and public safety.
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In 2021 the school zone traffic camera program began, which is indicated separately in the chart above.
Revenues from the school zone speed camera program is designated to support the related expenses
from that program as well as support traffic and pedestrian improvements in school zones.
60
Fire Insurance Premium Tax
Description
The state collects a two percent tax on the premiums of all insurance policies
written. Of the tax collected on fire policies and the fire component of
homeowner and commercial policies, 25.0% is distributed to cities and fire
districts that established their own Firemen’s Pension Fund prior to the
establishment of the LEOFF system on March 1, 1970.
Base
Collection Method
Cities with a pre-LEOFF firefighters’ pension fund receive a share of the tax
based on their proportionate number of paid firefighters.
The Office of the Insurance Commission (OIC) certifies the fire insurance
premiums collected by March 31, and distributions are made in a lump sum
each year on the last business day of May.
Fund
Use of Revenue
Received in General Fund (000), transferred to Firemen’s Pension Fund (611).
Fire insurance premium tax revenues are restricted for the Firefighters’
pension fund as established by RCW 41.16.
TMC
n/a
RCW
48.14.020: Authorizes the state to impose this tax.
41.16.050: Authorizes the distribution of the tax to the city to fund its fire
pension requirements. Distribution is based on the number of paid firemen.
The entire amount is deposited into the Firemen’s Pension Fund (Fund 611).
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Investment Income
Description
This includes interest earnings on investments that are held or sold, net of
investment fees.
Base
Collection Method
Interest earnings from money invested in the state investment pool, interest
on money market accounts, and interest from US Government Securities.
The City receives interest revenue by electronic funds transfer from the
holder of our investments.
Funds Investment interest is distributed to all City funds quarterly based on
proportionate cash balances in each fund.
Authority
This is authorized by the City of Tukwila Investment Policy; Ordinance 2666
repealed Ordinance 1916 and investment policy changes will now be done by
Resolution No. 2034.
RCW
35.39.030: Authorizes cities to invest any excess moneys in certain securities.
62
Local Improvement Districts (LIDs)
Description
LIDs are financing tools only. Local Improvement Districts (LIDs) are a means
of assisting benefiting properties in financing needed capital improvements
through the formation of special assessment districts. Special assessment
districts permit improvements to be financed and paid for over a period of
time through assessments on the benefiting properties. A variation of the LID
is the Utility Local Improvement District (ULID). The difference between
ULIDs and LIDs is that utility revenues are pledged to the repayment of the
ULID debt, in addition to the assessments on the benefiting properties. State
statutes provide that an LID can be converted to a ULID after formation.
The City currently has one existing LID#33.
Base
Collection Method
One of the most important things to note about LIDs is that the entire LID
process is about financing infrastructure improvements, not constructing
them. LID processes lead, ultimately, to the sale of bonds to investors and
the retirement of those bonds via annual assessments on the property
owners within a district. LIDs can be a catalyst for economic growth.
The 2 main goals of the LID process are to present a bond portfolio to
investors that will entice them to invest at as low a rate of return as possible;
and to assess property owners as fairly as possible in relation to special
benefits received.
The City receives periodic installment payments from the benefiting
properties; usually over the length of time of the debt. LID assessment
collections continue through 2028
Funds LID’s can be assessed in General Funds as well as Utility type funds as well.
Authority
LIDs are authorized by the City of Tukwila Municipal code 13.04
RCW
RCW35.43-.56: establishes processes and authorizes cities to create LIDs.
63
Enterprise Funds
64
Water Utility Charges for Service
Description
The Water Utility bills customers a monthly base rate and consumption
charges based on the quantity of water consumed. Approximately 60% of
Tukwila residents are served by the City’s water system, with the remainder
served by several water districts.
Base
Collection Method
Number of water accounts and volume of water consumed.
Utility customers remit their utility payments to the City monthly via cash,
check or credit card.
Fund
Use of Revenue
Water Fund (401)
Water utility revenues collected are restricted for use by the Water Utility
Fund.
TMC
14.04 Authorizes the City to collect charges for water service (actual water
rates are adopted via Resolution. Most recently Res.#2039; effective for 2021
& 2022 rates.
RCW
35.91: Municipal water and sewer facilities act.
35.92.010: Authorizes cities to operate waterworks.
35.92.025: Authorizes cities to charge for connection to the city water
system.
65
Sewer Utility Charges for Service
Description
The Sewer Utility bills customers a fee for wastewater collection and
conveyance to King County for treatment. Approximately 60% of Tukwila
residents are served by the City’s sewer system, with Valley View Sewer
District serving the remaining residents. A few properties remain on septic
systems through a grandfather clause but will be required to use the sewer
system upon sale or major renovation of the residences.
Base
Collection Method
Number of sewer accounts and volume of wastewater discharged.
Utility customers remit their utility payments to the City monthly via cash,
check or credit card.
Fund
Use of Revenue
Sewer Utility Fund (402)
Sewer Utility Fund revenues are restricted for use by the Sewer Fund.
TMC
14.12: Authorizes the City to require owners of real property in Tukwila to
connect to the City’s sewer system.
14.16: Establishes authority for the City to collect charges for sewer services
(actual sewer rates are adopted via Resolution 2016).
RCW
35.91: Defines system of sewage.
35.91.030: Authority to set rates.
35.92.020: Authority to acquire and operate sewerage and solid waste
handling systems, plants, sites or facilities.
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Surface Water Utility Charges for Service
Description
The Surface Water Utility bills customers for management, collection, and
conveyance of surface water runoff from roads and properties.
Base
Collection Method
Number of storm drainage accounts and amount of impervious surface area
such as parking lots. Credits are provided in the event of privately provided
surface water management facilities.
Surface Water fees are billed with property taxes and collected by King
County. The County distributes those fees to the City daily by electronic funds
transfer.
Fund
Use of Revenue
Surface Water Fund (412)
Surface Water Utility revenues are restricted for use by the Surface Water
Fund.
TMC
14.30 defines Surface water Applicability & Standards
RCW
35.21.210: Authorizes cities to provides storm drainage services and systems.
67
Recap of Tax & Fee
Restrictions and Uses
68
TAXES
Retail Sales and Use Tax:
Local sales tax revenues are unrestricted and can be used for any lawful governmental purpose.
Property Tax:
Supports general operations of city government and funds capital projects not funded by other sources.
Excess levy in fund 213 is used to pay debt service costs on 2016 & 2019 UTGO bonds.
Utility Taxes:
Utility tax revenues are unrestricted and may be used for any lawful governmental purpose. With the
exception of the solid waste tax, these are currently capped at 6%; additional taxes would be subject to
a vote. A portion of the solid waste tax revenue is dedicated to streets projects.
Interfund Utility Taxes:
Interfund utility tax revenues are used to support general City operations without restriction.
Gambling Tax:
RCW 9.46.113 states that gambling tax revenue must first be used for the purpose of public safety.
Leasehold Excise Tax:
Leasehold excise tax revenues are unrestricted and may be used for any lawful governmental purpose.
Admissions Tax:
Admissions tax revenues are used to support general City operations.
There are no restrictions on the use of revenue. The maximum rate the city can levy is 5.0%.
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Lodging Tax:
Lodging tax revenue is used for the sole purpose of paying costs of tourist promotion activities.
RCW 67.28.1816 restricts the use of lodging tax revenues for:
(1) tourism marketing; or
(2) marketing and operation of special events designed to attract tourists; or
(3) supporting the operations and capital expenditures of tourism-related facilities.
Affordable Housing Tax
RCW 36.70A.540 restricts the use of Affordable Housing tax revenues for support of the development of
low-income housing.
Real Estate Excise Tax:
REET 1 revenues are restricted and may only be used for certain purposes which depend on the City’s
population and whether the city is planning under the Growth Management Act. REET 2 revenues are
restricted for “capital projects” as identified in the City’s comprehensive land use plan. In November
2016, the voters of the City of Tukwila approved the public safety plan which includes a bond. Since that
time, the City has designated the first $500,000 of REET 1 annually to be placed in fund 305-Public Safety
Plan-Voter approved Project. This allotment is legislated thru 2043.
Restrictions:
REET 1 REET 2
Administrative facilities, bridges,
domestic water systems, fire
protection facilities, libraries, parks,
recreational facilities, flood control
projects, sewer systems, sidewalks,
storm systems, street lighting, traffic
signals and trails.
Bridges, domestic water systems,
highways/roads/streets, sewer
systems, sidewalks, storm systems,
street lighting, traffic signals, and
park improvements.
Source: RCW 82.46.010
Source: RCW 82.46.035
Commercial Parking Tax:
Commercial parking taxes must be used for transportation purposes as defined in RCW 82.80.070.
Restrictions: No cities may use commercial parking tax revenues to replace, divert, or loan any revenues
currently being used for transportation purposes to non-transportation purposes.
Business and Occupation Tax:
Business and occupation tax revenues are used to support general City operations. There are no
restrictions on the use of revenues.
LICENSE, PERMITS & OTHER FEES/CHARGES
70
Business License Fees:
Business License Fees are receipted into the General Fund. Cities may charge a flat or tiered fee for
business licenses, but the fees charged should be fair and bear a reasonable relation to the costs.
Impact Fees:
Revenues may be used for: Transportation – public streets and roads; Parks – publicly owned parks,
open space, and recreation facilities; Fire Protection – fire protection facilities.
Impact fees cannot be used to fund operating and maintenance costs or private capital facilities; and
exceed a proportionate share of the system improvements; and be relied on solely to fund the
improvements.
Parks & Recreation Activity Fees:
Parks and Recreation revenues are unrestricted and may be used for any lawful governmental activity.
Building Permit Fees:
Building Permit fees are unrestricted and may be used for any lawful governmental activity.
Plan Check & Review Fees:
Plan check fees are unrestricted and may be used for any lawful governmental purpose.
Rental Housing License:
Rental Housing License Fees are receipted into the General Fund without restriction on use.
INTERGOVERNMENTAL REVENUES
State Shared Revenues:
These revenues are restricted for funding local law enforcement activities. Revenues may not be used
to supplant or replace existing funding. In addition, statutory restrictions on use of all criminal justice
monies are additionally subject to review by the State auditor to determine compliance.
Grants:
Grant funding is restricted by each contracted grant agreement.
Motor Vehicle Fuel Tax (MVFT):
MVFT revenues must be placed in a designated city street fund and used for highway or street purposes
as outlined in RCW 47.24.040. Multimodal revenue may be spent on any transportation purpose.
Cities must use at least 0.42% of MVFT funds for pedestrian, equestrian, or bicycle trails, unless such
amount would be less than $500 per year. Authority is established by the Revised Code of Washington
(RCW).
71
Streamlined Sales Tax (SST) Mitigation:
SST mitigation payments are unrestricted and may be used for any lawful governmental purpose.
Fines & Penalties:
Traffic and parking fines are unrestricted and may be used for any lawful governmental purpose. Non-
traffic fines & violations are used in the general fund and are not restricted.
Fire Insurance Premium Tax:
Fire insurance premium tax revenues are restricted for the Firefighters’ Pension Fund as established by
RCW 41.16.
Investment Income:
Investment interest is unrestricted and may be used for any lawful governmental purpose.
ENTERPRISE FUND REVENUES
Water Utility Charges for Service:
Restrictions: All revenue received in any enterprise fund is restricted to use only in that fund. TMC 14.04:
Authorizes the City to collect charges for water service. Actual water rates are analyzed & adopted via
Resolution 2016.
Sewer Utility Charges for Service:
Restrictions: All revenue received in any enterprise fund is restricted to use only in that fund. TMC 14.16:
Authorizes the City to collect charges for sewer service Actual water rates are analyzed & adopted via
Resolution 2016.
Surface Water Utility Charges for Service:
Restrictions: All revenue received in any enterprise fund is restricted to use only in that fund. TMC 14.28:
Authorizes the City to collect charges for surface water service Actual water rates are analyzed &
adopted via Resolution 2016.
72
Additional Revenues
for Consideration
73
74
Levy Lid Lifts
Summary
A taxing jurisdiction that is collecting less than its maximum statutory levy rate may ask a simple majority
of voters to “lift” the total levy amount collected from current assessed valuation by more than 1%.
(RCW 84.55.050 – also see WAC 458-19-045, which provides a better understanding of the process than
the statute). The new levy rate cannot exceed the maximum statutory rate.
Levy lid lifts may generate revenue for any purpose, but if the amount of the increase for a particular
year would require a levy rate above the statutory maximum tax rate, the assessor will levy only the
maximum amount allowed by law.
There are two types of levy lid lifts: single-year lifts (sometimes known as “one-year,” “one-bump,”
“basic,” or "original" lifts) and multi-year lifts. However, these names can be confusing, since “single-
year” levy lid lifts typically last for multiple years too.
Use/Restrictions:
Single-Year Levy Lid Lifts
The single-year (“one-bump”) lid lift is the original version created by Initiative 747 in 2001. It allows
your jurisdiction to increase the maximum levy by more than one percent for one year only. That amount
is then used as a base to calculate all subsequent 1% levy limitations for the duration of the levy. Single-
year lid lifts may be used for any lawful governmental purpose, including general government
operations, and there are no supplanting limitations. Single-year levy lid lifts can be temporary or
permanent.
With a temporary single-year lid lift, the levy lid bumps up more than 1% in the first year, and then that
amount is used to calculate all subsequent 1% levy limitations until the measure expires. A temporary
lid lift can be used for any purpose and last for any number of years, but if used to pay debt service it
may not exceed nine years (except Thurston County, which may increase the levy lid for 25 years –
see SHB 1344).
When the lid lift expires, the levy lid reverts to what it would have been if the levy lid lift never existed
and the jurisdiction had increased its levy by the maximum allowable amount each year in the meantime
(RCW 84.55.050(5)).
Permanent Single-Year Lid Lifts, with a permanent single-year lid lift, the levy lid bumps up more than
1% in the first year, and then that amount is used to calculate all future 101% levy limitations. The
measure never expires, and the levy lid never reverts. However, future annual increases may not exceed
1% without going to the voters for another lid lift.
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Multi-Year Levy Lid Lifts
The state legislature added the “multi-year” levy lid lift option in 2003. Unlike the single-year (“one-
bump”) levy lid lift, which bumps up once and is then used to calculate the 1% limitation for the
remainder of the levy, a multi-year levy lid lift authorizes a jurisdiction to bump up or exceed the 1%
limitation each year for up to six consecutive years.
A multi-year levy lid lift may be used for any purpose, but the ballot must state the limited purposes for
which the increased levy will be used (unlike a single-year lid lift, where there is no requirement to state
the purpose).
The lift must state the total tax rate for the first year only – it cannot state the maximum rate in future
years. For all subsequent years, the measure must identify a maximum “limit factor” which the total levy
amount may not exceed (stated as an annual percent increase or a specific inflation index). The limit
factor does not have to be the same for each year.
For instance, the limit factor might be 3% annually, 6% annually for the first two years and 4% annually
after that, or the annual inflation increase as measured by an index such as the Consumer Price Index
(CPI).
Multi-year lid lifts may be temporary (up to six years) or permanent. Multi-year lid lifts may also be used
for debt service for up to nine years, in which case they may fall somewhere in between “temporary”
and “permanent.”
Temporary Multi-Year Lid Lifts- With a temporary multi-year lid lift, the levy lid bumps up more than 1%
each year (subject to the limit factor) for up to six years. When the lid lift expires, the levy lid reverts to
what it would have been if the levy lid lift never existed and the jurisdiction had increased its levy by the
maximum allowable amount each year in the meantime (RCW 84.55.050(5)).
Permanent Multi-Year Lid Lifts- Similarly, with a permanent multi-year lid lift the levy lid bumps up more
than 1% each year (subject to the limit factor) for up to six years. However, the lid lift does not revert,
and the maximum levy is then used as the base to calculate all future 1% levy limitations.
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Excess Property Tax Levy
Summary
An Excess levy is a levy of additional taxes by any type of taxing district. The amount is over and above
the total tax allowed by statute. (RCW 84.52.052) Districts may place bond and levy issues on any
regularly scheduled election. Each ballot measure may have different requirements for passage.
Except for school excess levies, all excess tax levies must meet validation requirements and receive at
least 60% approval to pass.
Excess levies for capital purposes
(1) Any municipal corporation otherwise authorized by law to issue general obligation bonds for capital
purposes may, at an election duly held after giving notice thereof as required by law, authorize the
issuance of general obligation bonds for capital purposes only, which does not include the replacement
of equipment, and provide for the payment of the principal and interest of such bonds by annual levies
in excess of the tax limitations contained in RCW 84.52.050 to 84.52.056, inclusive and RCW 84.52.043.
Such an election may not be held more often than twice a calendar year, and the proposition to issue
any such bonds and to exceed the tax limitation must receive the affirmative vote of a three-fifths
majority of those voting on the proposition and the total number of persons voting at the election must
constitute not less than forty percent of the voters in the municipal corporation who voted at the last
preceding general state election.
(2) Any taxing district has the right by vote of its governing body to refund any general obligation bonds
of said district issued for capital purposes only, and to provide for the interest thereon and amortization
thereof by annual levies more than the tax limitations provided for in RCW 84.52.050 to 84.52.056,
inclusive and RCW 84.52.043. (3) For the purposes of this section, "bond" includes a municipal
corporation's obligation to make payments to the state in connection with a financing contract entered
into by the state by or on behalf of a municipal corporation under chapter 39.94 RCW
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Cultural Access Program Sales Tax
Summary
• Sales tax up to 0.1% – revenues are restricted and must be used to benefit or expand access to
nonprofit cultural organizations.
• Maximum duration of 7 years; may be renewed for additional 7-year periods.
• May be imposed by any city or town. • Requires voter approval. RCW: 82.14.525; chapter 36.160
Any city, town, or county may impose a sales tax up to 0.1% for up to seven years to benefit or expand
access to nonprofit cultural organizations (RCW 82.14.525; chapter 36.160 RCW). The measure requires
voter approval. Counties have similar authority under the same statute. The enabling legislation (see
RCW 36.160.030) provided counties with the first right of refusal and did not allow a city to place this
measure on the ballot unless either (a) the county adopted a resolution forfeiting its right, or (b) the
county did not place such a proposition before the voters by June 30, 2017.
Since the 2017 deadline has passed, any city or town may now place a cultural access program sales tax
on the ballot. While the statutory language is not entirely clear, it is our interpretation that a city and a
county may not impose this sales tax concurrently. In other words, if the county has enacted this sales
tax and created a cultural access program, no city within that county may impose this sales tax as long
as the county’s tax is in place. But if the county has not imposed such a sales tax, or if the county’s tax
expires and is not renewed, the city may still submit this measure to voters.
While most of the provisions within chapter 36.160 RCW refer specifically to counties, not cities, RCW
36.160.030 states that if a city creates a cultural access program, “all references in this chapter to a
county must include a city that has exercised its authority under this subsection, unless the context
clearly requires otherwise.”
Use of Revenues
The revenues must be used in accordance with RCW 36.160.110, which is very detailed. All cities and
counties statewide are subject to the same criteria. The funds may be used for several purposes related
to cultural access programs, including start-up funding, administrative and program costs, capital
expenditures or acquisitions, technology, and public-school programs to increase cultural program
access for students who live in the city.
Ballot Measure Requirements- The sales tax must be approved by a simple majority of voters and may
be submitted at any special, primary,35 or general election. It may be re-imposed for one or more
additional 7-year periods, but voter approval is required each time. According to MRSC’s Local Ballot
Measure Database, as of 2019 Tacoma is the only city to attempt this sales tax authority and the measure
passed. King County also attempted a countywide sales tax, which narrowly failed.
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Revenue Sharing- There are no revenue-sharing provisions. The city retains 100% of the revenue, and
unlike most local sales taxes that have a 1% administrative fee withheld by the Department of Revenue,
this sales tax must be collected and distributed to the city or town at no cost.
Property Tax Alternative- As an alternative, any city or town may also levy a property tax under RCW
84.52.821 for cultural access programs. From a revenue standpoint, the property tax and sales tax
options are roughly equivalent: the amount of revenue generated by the property tax may not exceed
0.1% of the retail sales in the city for the most recent calendar year, both options require a simple
majority vote, and both are capped at seven years but may be renewed with voter approval.
Deciding whether to impose the sales tax or the property tax option is a policy decision for the city to
make, although it is worth noting that the property tax levy could be reduced or eliminated through pro-
rationing if the $5.90 or $10 property tax caps are exceeded. The sales tax and property tax options are
mutually exclusive. If a city imposes the sales tax option it may not impose the property tax option for
as long as the sales tax is in effect, and vice versa (RCW 36.160.080).
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Marijuana Excise Tax
Summary
• A portion of the state’s marijuana excise tax is distributed to cities and counties depending on their
marijuana policies.
• Two separate components: – Per capita share distributed to all cities and counties that do not prohibit
marijuana businesses. – Retail share distributed to cities and counties where marijuana retailers are
located, in proportion to statewide marijuana revenues.
• No clear guidance on use of revenues but stated intent of I-502 is that marijuana legalization will
“[allow] law enforcement resources to be focused on violent and property crimes [and generate] new
state and local tax revenue for education, health care, research, and substance abuse prevention.” RCW:
69.50.540(2)(g)
Initiative 502 (I-502), which was approved by voters in 2012, legalized recreational marijuana and
authorized marijuana excise taxes. Marijuana excise taxes are imposed and collected by the State of
Washington. As of 2018, the state imposes a 37% marijuana excise tax on the retail sale of marijuana,
marijuana concentrates, and marijuana-infused products (RCW 69.50.535 and WAC 314-55-089). Cities
and counties may not impose additional local excise taxes upon the sale of marijuana. However, the
state shares some of the excise tax revenues with cities and counties, as mandated by I-502.58 The actual
revenues received by cities depend on legislative appropriations from the state budget. The state
legislature has previously attempted to reduce local marijuana excise tax distributions, and like all shared
revenues these distributions could be changed in future legislative sessions.
Marijuana excise tax distributions depend in significant part upon local marijuana policies and
regulations. The regulatory approach that each city adopts, as well as the number of local marijuana
retailers, will determine whether the city receives any marijuana excise tax revenue (and how much).
Eligibility and Distribution Formula
There are two separate components to marijuana excise tax distributions:
• Per capita share: Distributed on a strictly per capita (population) basis to all cities, towns, and counties
that allow the siting of marijuana producers, processors, AND retailers. Any jurisdiction that prohibits
marijuana producers, processors, OR retailers is not eligible.
• Retail share: Distributed to all cities, towns, and counties where licensed marijuana retailers are
physically located, and in proportional share to total statewide marijuana retail sales. The different
distribution formulas mean that some jurisdictions will receive both the per capita and retail
distributions, while others may receive only one or the other, and some jurisdictions will receive neither.
The chart below shows a few hypothetical scenarios to illustrate the differences
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The different distribution formulas mean that some jurisdictions will receive both the per capita and
retail distributions, while others may receive only one or the other, and some jurisdictions will receive
neither. The chart below shows a few hypothetical scenarios to illustrate the differences.
Each year by September 15, the LCB must provide the state treasurer with the annual distribution
amount for each county and city.
Use of Revenues
The restrictions on the use of marijuana excise tax revenues are somewhat murky, as there is no clear
statute stating how the funds must be used. However, the notes in RCW 69.50.540 reference RCW
69.50.101 and the stated intent of I-502, which states that marijuana legalization will “[allow] law
enforcement resources to be focused on violent and property crimes [and generate] new state and local
tax revenue for education, health care, research, and substance abuse prevention.”
Timing of Receipts
Payments are distributed quarterly on the last business day of March, June, September, and December.
The State Treasurer’s Office distributes both the “per capita” and “retail” shares together in one
payment.
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Special Taxing Districts
Transportation Benefit District - Vehicle License Fees
Summary
• Any city that has established a transportation benefit district (TBD) may impose a non-voted vehicle
license fee up to $50 or a voted vehicle license fee up to $100.
• Revenues must be used for specified transportation projects. RCW: 82.80.140
Any city or town may form a transportation benefit district (TBD) under chapter 36.73 RCW to raise
revenues for transportation purposes. TBDs may generate revenue through a variety of means, but the
two most popular funding mechanisms are a voted sales tax up to 10 years and 0.2% (see Transportation
Benefit District Sales Tax) and a vehicle license fee (“car tab fee”) up to $100 as described below.
Any TBD (or city, if the city has “assumed” the TBD under chapter 36.74 RCW) may impose a vehicle
license fee up to $50 without voter approval, or up to $100 with voter approval (RCW 82.80.140, RCW
36.73.040(3)(b)), in addition to any vehicle license fees charged by the state. Initiative 976, approved by
voters in 2019, would have eliminated this authority, but the state Supreme Court struck down the
initiative as unconstitutional the following year.
Exemptions
Certain vehicles are exempt under RCW 82.80.140(6), including campers, farm vehicles, mopeds, off-
road and non-highway vehicles, snowmobiles, and private use single-axle trailers.
Application
The TBD vehicle license fee may be imposed in addition to the TBD sales tax if desired, and several
jurisdictions have imposed both concurrently. It is worth noting that these two revenue options are
imposed upon different sources – TBD vehicle license fees are paid solely by city residents who own
vehicles, while TBD sales taxes are paid by anyone who makes retail purchases within the city. The
amount of revenue a city can generate with each option will also vary depending on the rates imposed,
the local economy, and the number of registered vehicles.
Non-Voted Vehicle License Fees Up to $50- The district may only impose a non-voted vehicle license fee
up to $20 initially. After a $20 fee has been in effect for at least 24 months, the district may increase the
fee up to $40. After a $40 fee has been in effect for at least 24 months, the district may increase the fee
up to the maximum $50. However, the portion of the fee above $40 is subject to potential referendum
as provided in RCW 36.73.065(6), even if your city has not otherwise adopted powers of initiative and
referendum. If a district imposes or increases its non-voted vehicle license fee that, when combined with
fees previously imposed by another district within its boundaries, exceeds $50, the district must provide
a credit so that the combined vehicle fee does not exceed $50.
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Voted Vehicle License Fees Over $50- Any vehicle license fee higher than the amounts listed previously,
up to a maximum of $100, must be approved by a simple majority of voters. The measure may be placed
on the ballot at any special, primary,64 or general election. According to MRSC’s Local Ballot Measure
Database, Seattle is the only jurisdiction that has successfully passed a voted vehicle license fee, and
even then, its first attempt was unsuccessful. Other jurisdictions that have unsuccessfully attempted
voted vehicle license fees in the past include King County and the cities of Bremerton, Burien, and
Edmonds.
Use of Revenues
The revenues may be used for eligible “transportation improvements” listed in a local, regional, or state
transportation plan in accordance with chapter 36.73 RCW. Improvements can range from roads and
transit service to sidewalks and transportation demand management. Construction, maintenance, and
operation costs are eligible. However, RCW 82.80.140 states that the revenue may not be used for
passenger-only ferry improvements unless the vehicle license fee is approved by voters.