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HomeMy WebLinkAbout2002-09-30 Special MinutesSPECIAL PRESENTATIONS: TUKWILA CITY COUNCIL September 30, 2002 7:00 p.m. Tukwila City Hall Council Chambers SPECIAL MEETING MINUTES CALL TO ORDER: Calling the meeting to order at 7:00 p.m. was Mayor Steven M. Mullet. ROLL CALL: Calling the roll of Council was Bob Baker, Deputy City Clerk. Present were Council President Richard Simpson; and Councilmembers Joe Duffie, Joan Hernandez; Pam Carter; Pamela Linder, and Dave Fenton. FENTON MOVED; DUFFIE SECONDED; TO EXCUSE THE ABSENCE OF COUNCILMEMBER JIM HAGGERTON. The motion carried 6 -0. OFFICIALS: Steven M. Mullet, Mayor; Rhonda Berry, Assistant City Administrator; Lucy Lauterbach, Legislative Analyst; Bob Baker, Deputy City Clerk; Alan Doerschel, Finance Director and Fire Chief, Tom Keefe. PROPOSED UTILITY TAX DISCUSSION (Third of three public meetings) Utilizing the previously shown Power Point presentation, Alan Doerschel, Finance Director, provided a financial overview of the City as well as an economic forecast for the ensuing years, through 2007. Reiterating many of the same facts presented at prior public meetings on the proposed utility tax, Mr. Doerschel noted it may take four to eight years to get to where Tukwila was, just two years ago, in terms of finances. Since September 11, 2001, the Nation has seen a dramatic reduction in terms of economics. At nearly 8 Washington State is cited with the highest unemployment rate in the nation since that time. Mr. Doerschel spoke of the current economic situation as it relates to Norwest economy, sales tax, property taxes and other revenues. Next, he spoke about long term projections, especially with regard to Boeing, technology (in general), Northwest forecasts and national forecasts. Next, the Finance Director reviewed estimated revenues and expenditures between the years of 2002 and 2007. In that timeframe the revenues peak at $38.2 million (in 2007), while expenditures peak at $43.3 million without any reductions to the general fund. With a 5% reduction by 2007, the City faces a $41.4 million deficit. Reviewing cash flow projections between 2002 and 2007, Mr. Doerschel reported a $21.9 million deficit with no budget reductions; and $13.9 million, with a 5% reduction to the general fund. Council was reminded that a 5% cut results in a reduction in the number of people to do the work, not to mention a reduction in services and /or programs currently offered. Next, the General Fund 2002 Budget Analysis was reviewed by type of expenditure. Salary and wages make up 57.5% of the general fund, while personnel benefits add another 14.4 Supplies, other services and charges, intergovernmental services, capital and other expenses create the remainder of the general fund. A total expenditure of $31,859.759.00 is anticipated for 2002. Citing a reduction in service levels across the board, along with the Capital Plan, Mr. Doerschel noted the need for increased revenues. The City could impose, yet are not currently planning for a Business and Occupation Tax and a Property Tax Lid Levy Lift. Alternatively, however, City Administration is proposing implementation of a Utility Tax. Said utility tax would be imposed at 6% on such items as brokered natural gas, telephone and cellular telephone services. Additionally, such items proposed for taxation include cable, Internet access, gas and electricity. While businesses will generate approximately 83% of the anticipated utility taxes, community members are expected to pay the remaining 17 With that thought in mind, City Administration anticipates community members can expect to pay somewhere between $4.50 and $9.50, per month, for the proposed utility tax. At this rate, the City can anticipate an approximate $3.5 or $4.0 million per year. Beyond receipt of the 6% utility tax, the City could be expected to fund the remainder of the shortfalls, after making the proposed, and necessary 5% reduction in the general fund. Additionally, creation of the proposed utility tax could potentially reduce the need to reduce City services and /or programs beyond 5% at the end of 2005. City of Tukwila Page 2 of 2 City Council Special Meeting Minutes September 30, 2002 At 7:40 p.m., Mr. Doerschel completed his formal presentation. At the same time, Mayor Mullet opened the microphone to community members present and wishing to address the Council with questions, comments and /or concerns. Al Pieper. 17083 53` Avenue South. spoke against the imposition of new taxes. He stated unanticipated surplus revenues (in the past) could have been saved, rather than choosing a project on which to expend the funds. He noted than even in "good times" taxes are not eliminated. Mr. Pieper then spoke in favor of forming a committee comprised of three to five community members who could review the proposed budget and find areas where cuts could be made to such items as staff and services. Finally, he volunteered to serve on the committee. Mr. Doerschel reminded all those present that City staff is lean and not any larger than those of similar sized and /or surrounding cities. Cuts in staff would indeed result in a reduction in services internally and externally. Dennis Robertson. 16038 40 Avenue South, Tukwila, asked if an emergency fund still exists. Mr. Doerschel responded in the affirmative and noted that it is $1.1 million and likened that fund balance to a "minimum amount" in a checking account. He stated these are monies the City just doesn't spend without a real, short -term emergency. Next, Mr. Robertson asked what surrounding cities are charging for utility taxes. Mr. Doerschel noted Renton imposes 6 Auburn imposes 5 and Kent charges 4.5 to 6% (varies). Currently, he reported, SeaTac is not imposing a utility tax. Additionally, Mr. Robertson inquired about a 5 -year growth plan and sought same from Mr. Doerschel. Finally, he asked what the City's plans to do (if considered yet) when times get harder and the utility tax revenues are below that which is anticipated. He noted that most items listed for taxation are wanted items, versus necessary, and that when items begin being taxed; some community members will discontinue receiving services for their "wants" (i.e., cellular phones, cable and /or internet services). Mr. Doerschel reported salary adjustments of non represented employees are being considered by City Administration and will be forwarded to the Finance and Safety Committee meeting on October 7, 2002. Beyond that, he noted, no other salaries could be considered, especially due to the fact that many have just been negotiated, settled and /or recently signed. No other citizen comments or inquiries were received. Mayor Mullet noted City staff would work through this issue and do all that is possible to preserve staff and /or services. If /when a proposed utility tax is presented to the Council, public hearings are sure to follow. No current dates and /or times for such have been set. ADJOURNMENT: 7:56 p.m. DUFFIE MOVED; HERNANDEZ SECONDED; TO ADJOURN THE SPECIAL MEETING. The motion carried 6 -0. --qcstiQ Ni\ Steven M. Mullet, Mayor TIbeht 1k_cth Robert H. Baker, CMC, Deputy City Clerk Date minutes approved: October 7, 2002