Citizen Harry: Edmonds officials explore financial realities, options

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By Harry Gatjens

Edmonds City Councilmember D.J. Wilson hosted a public meeting Thursday night to focus on City of Edmonds finances and alternatives for keeping solvent while maintaining or increasing city services. In addition to the presentations, Wilson sought input from the 30 or so in attendance about the current situation and future ideas.

The meeting started out with a presentation by Mayor Mike Cooper about the current budget awaiting council approval and the implications, as it is projected out over the next five  years. The city has done a great deal of belt-tightening over the past decade and has done an excellent job of pushing out into the future the day when tax increase become necessary, Cooper said. Even through 2011, the City still maintains services while retaining adequate reserves.

The mayor also mentioned the difficulties that the City of Lynnwood is having because it did spend down its reserves and is now facing massive budget cuts in an attempt to get out of a financial disaster it has created. Edmonds is being very proactive in closely monitoring its reserves to make sure that doesn’t happen here, Cooper explained.

Wilson then spoke about the efforts of the 2009 Levy Committee, recapping its advice to submit to voters a levy request for $3.75 million and suggesting that the city put together an Economic Development Commission to explore ideas that would help Edmonds’ economy — and hence, its revenue opportunities. The Edmonds City Council at first unanimously approved the Levy idea, but as political winds and pressures changed, ultimately decided to put it off. The Council did move forward and appoint an Economic Development Commission.

Frank Yamamoto of the Edmonds Economic Development commission then spoke about the commission’s work and its recommendations to the City Council. Most of the discussion revolved around the need for a “Strategic Plan” that would include surveying citizens and would serve as a roadmap for future discussions.

Several long-time residents asked how this new strategic plan would differ from several plans developed and paid for over the past 20 years and not acted upon. Yamamoto suggested that the prior plans weren’t true strategic plans and didn’t capture the real wants of the citizens.  As to why this one would be different, he stated that it would be developed by professionals who know how to properly conduct these services and research and would more accurately capture the wants of the citizens. The commission was requesting $100,000 to make sure they could hire very competent consultants.

Next to speak was City Councilmember Diane Buckshnis, who gave an overview of the work of the current Citizens Levy Committee. She will make a full presentation of this work at a council meeting next month, so this is a condensed version. The Levy Committee’s number-one goal is to determine the need for a levy and then — if the council agrees to place it on the ballot — to make sure that it will pass.

Sentiment has been expressed that the current Levy Committee has been spinning its wheels since it is difficult to find too many accomplishments so far. The committee has been extensively auditing the finances of the City for the past several months, much to the annoyance of City staff as this takes much time. However, now that the auditing is done, the committee can go to the citizens of Edmonds and say “We are confident that there is little waste in the City’s operations.” This lends credibility to any finding that a levy may be needed.

Also, the committee has made a model that allows for quick calculations of what the financial impact on any homeowner would be based upon the value of any levy that is needed. The commitee is also waiting for the council to pass the city’s 2011 budget, since a key ingredient in knowing how much of a levy might be needed is a starting point of where we are financially. Once the budget is approved, we will have that.

The other task the committee has completed is extensive research on why or why not levies have passed in nearby jurisdictions.  According to our research, the major factors are 1.  clear demonstration of the need and 2. integrity of the message and the messengers. Without both of those factors, a levy is sure to fail.

Phil Williams, Edmonds Public Works Director, was then asked talk about the recently failed Transportation Benefit District Proposition 1.  While Williams made it clear that he is not a politcal analyst and not qualified to know why the proposition failed, he did identify several problems: In addition to being affected by the general state of the economy, Proposition 1 was confusing to the public because it combined street maintenance needs with suggested future projects. In addition, the fee structure was consider regressive to some and the measure had lukewarm support from the council.

All of these factors, along with some others, played into the defeat of the measure, Williams said. One member of the audience said she supported most every tax or fee increase but in this case

Wilson then decided to make the meeting more interactive by polling those in attendance about why the initative failed. He offered several reasons for people to vote no and asked for a show of hands for each reason. Only a couple just thought that $40 created an economic hardship for some. A few others felt the “project list” was to blame. Most thought the problem was either a lack of clear communication of the need or a feeling that somehow the need was misrepresented. The amounts being raised couldn’t possibly solve the problems either for street maintenance or the projects, so this would be a never-ending fee.

All in all, this first half of the meeting was very informative and prompted good conversation.

Now to the meat of the meeting: Government 2.0, which essentially takes all the services provided by the city in the past and tries to split them off into various new entities. We have already seen this in the past with the Edmonds Library and last year with the Fire Department.

 Under Government 2.0, areas like the Parks Department will become their own entities and tax citizens directly rather than going through the City’s budget. Hence, your property taxes to the city would be reduced; however, you would now have new taxes for these “spun off” departments.

Government 1.0 is where we are now. Geographic location dictates what services you get and whom you pay for them. The city is kind of the feudal lord that provides all the services — fire, parks, police, libraries, streets, water, etc. — and you pay taxes to the city for all of those services.

With Government 2.0, each of those services is provided by their own entity, perhaps county- wide or even larger geographically, and you pay taxes and fees separately to those entities. The thought being each of those entities may be more efficient by specializing in what they do. However, you are now paying several taxes rather than just one. Some of those entities may work more efficiently and save you money, however, some may not.

So is Government 2.0 cheaper for the citizen than Government 1.0? Hard to say. Several audience members questioned the true net results of such a move. Over a decade ago, the  city spun off the Library and saved $1.2 million annually. The question was asked where those saving somehow returned to the citizens, who now had to pay a new library tax?

The thought behind this whole process is that it is easier to get people to approve taxes for individual services than it is to get them to approve general-fund tax increases. This is in part due to general mistrust of government and what they do with tax money. If I vote for a parks tax, I know it goes to parks.

Fire Chief Willis then made a presentation about the regionalization of Fire District 1 and how Edmonds participates in that. Currently, Edmonds is not part of Fire District 1. The City of Edmonds has a contract with Fire District 1 to provide fire services. What is the difference?

As a customer of the Fire District, it is still up to Edmonds government to collect taxes and then they pay a fee to Fire District 1. If Edmonds were regionalized into Fire District 1, you would then pay a tax to Fire District 1 and elect fire district commissioners. The City of Edmonds would not be involved in its management. Is this better? Cheaper?

Currently it costs about half as much to be an Edmonds resident and receive fire service than it does to receive fire service as a District 1 resident. But this may be temporary, as Fire District 1 is trying to reconfigure its pricing structure and perhaps in a year the costs would be comparable. Better? Depends on whether your would prefer to deal with a regional commission or your current local government when you have issues.

This discussion was followed by a general question-and-answer session. One feeling expressed was that people won’t vote for general levies anymore and that it would be best to break out various services and have separate levies (for example, a Parks Levy or Road Levy). Another point of view was that these ideas were just ways to get around the fact that we are asking citizens to raise taxes, and that reclassifying a tax increase to a more limited use would make it easier to pass.

Councilmember Wilson said he plans to have a continuing series of these meetings to further explore the possibilities.

Edmonds resident “Citizen Harry” Gatjens is providing regular reports to My Edmonds News on the workings of the Edmonds city government, including the 2010 Citizens Levy Committee and the Citizens Technology Advisory Committee.

11 COMMENTS

  1. Harry

    Yes, very good report. I do feel the need though to expand on your reference to the library. When the Edmonds library became part of the Sno Isle Library District, the $1.2 million to operate it was no longer an expense for the city as its funding became another element of property taxes. Currently the taxes collected by the library district from Edmonds property taxpayers amount to about $3 million.

    I believe that it is generally true that total property taxes are higher whenever services are spun off into additional taxing districts. The city’s deal with Fire District 1 did not make FD1 a new taxing district – it’s simply a contract for fire services at a cost than is less than what it cost the city to operate the fire department.

  2. Based on both the making the library part of Sno Isle district and the contract with fire District 1 where the city saved money but the citizens didn’t receive reduced taxes it appears that the comment “these ideas were just ways to get around the fact that we are asking citizens to raise taxes, and that reclassifying a tax increase to a more limited use would make it easier to pass.” is the true purpose of Government 2.0. There is a danger if the things citizens want like police, fire, parks, and libraries are all separate, who would ever vote to increase the city administration taxes?

  3. Mary makes a good point. The challenges are to try and figure out what the majority of people want for a range of services provided by government. Once we figure out what we want as a total list then we need to figure out how to pay for it. Today we pay for some services with individual taxes and we lump other services an pay for them our of a single bucket like the General fund.

    Mayor Cooper started a process to ask the people some questions their views on the budget and he also initiated a poll to see how people think about City services. Great start.

    The City has a build in polling capability on the City web site. My Edmonds News has a similar capability. If you carefully read the poll results you can begin to see how people are thinking. You can find the results on the City web site as the lead item right under the banner.

    That poll should just be the start of gathering information and input from our citizens. When people have a chance to input to a process many folks come forward. It is easier to answer a poll or a question of the week than it is to stand up at the microphone for 3 minutes at a Council meeting. The 3 minute democracy idea is not the full answer to citizen input. It seems the 3 minute process is used mostly by a few number of people and some have a hard time seeing the red light.

    So lets figure out how to get some real input what the citizens want tthe government to do and and we can figure out along the way how best to pay for it.

    As Mary said we may have problems paying for all of government if we simply isolate the popular services and pay for them separately. Deciding what government is to do and how to pay for it should not be shell game of financial tricks. People will tell you want they want if you ask them and they will pay for it if we provide what the want in the most efficient way.

  4. We need to be careful with these poll ‘results’ as it’s not clear how representative the samples would be of all Edmonds’ citizens. If as I suspect, a small percent of the whole use these polls, it’s not a representative sample and should not be a gauge of public opinion.

  5. Jim is correct. Polls can be poorly done. Questions can be tainted. Results can be misinterpreted. But they can give some insight to what people may be thinking.

    I recall some references to representative sample size in some consultant studies to suggest we need somewhere between 300-400 people. Also it can’t be 4 people answering 100 times each. The Mayor’s questionnaire had close to 300 people and was designed in a way to prevent multiple entries. The results for the Mayor’s questionnaire showed how people actually answered the question not just an average. Look at the way people answered the question about how they would like to be taxed. Look at what they said about parks. Look at what they said about fire services. The answers were insightful and tend to show how a number of people are thinking.

    When Council holds a public hearing about a topic some people step up to the mike and state their views. If it is a hot topic we may be 20 plus people talking. If it is a really hot topic we could get up to 50 folks. A review of the minutes or a view of the TV replay often shows the same people talking on almost every topic. So how would you rank the following? A. 4 people talking at the mike. B. 20 people at the mike all saying the same thing. C. 50 people at the mike split 50-50 on a topic. D. 200+ people responding to a questionnaire. E. A representative sample of 300-400 people with the results 75-25.

    For fear of offering an opinion I will not select from the above. But as we move forward we are confronted with some very important issues: from taxation, what services do we want to consolidate, who are we going to select for our 4 council seats our and mayor next November. Ultimately we are a town of 41,000, with about 20,000 voters, and 13,000 who vote. The winning vote is usually around 7,000. We just need to figure out a way to get more people involved up front and not wait for election night to then sit back and wonder what happened. Asking the right questions of people now and correctly viewing the answers can help us shape the discussion that needs to take place to make Edmonds a better place.

  6. A word on polling and surveying, in response to Jim and Darrol, as designing these kinds of inquiries is part of what I do for a living.

    First, a survey can deliver a statistically valid sample of public opinion without querying everybody in town. Jim, you can poll “a small percent of the whole” and get a solid gauge of public opinion — it just has to be engineered correctly.

    Second, surveys in which the respondent base is self-selected, such as the mayor’s online survey, are inherently less trustworthy than ones in which the invitation is extended proactively to a random sample — via email, phone, clipboard corps on the street, or direct snail-mail campaign. Darrol points out that the same handful of people seem to hog the mike at public forums, which is another form of self-selection. Merely tracking the views of hearing participants is an inherently flawed way of measuring public opinion.

    Third, question design is everything. We’ve all received “push polls” in the mail from various political interests trying to promote a point of view, sometimes subtly, sometimes not. (Questions like: “How big a disaster do you think Proposition X has been? Huge, major, or cataclysmic?”) You need an objective outsider with no interest in the outcome to frame the questions.

    Fourth, the respondent base should be properly filtered — another problem with the mayor’s online poll. How do we know the folks who answered the poll are really from Edmonds, or really over 18, etc.?

    You do want to amass a balanced roster of at least 400 complete surveys, as Darrol says. (Not as slim as it sounds. The Nielsen ratings people deploy only 2,000 or 2,500 people-meters nationwide to report national TV ratings. They once tried deploying a whole lot more to see if they’d get better / more useful data. They didn’t.) To accomplish this you typically have to issue 4,000 to 5,000 invitations through a variety of channels — compensating for the fact that not everyone’s online, more people are dropping landlines, etc., and then balancing for age and income representation.

    There are clear methods Edmonds can pursue for getting a clear, low-error-rate, unbiased view of citizen opinion… and for a heck of a lot less than $100,000, which Harry says is the sum the Edmonds Economic Development Commission is requesting for such work. I’ve seen serious datagathering projects of this scope completed for about half that sum; I’ve led such projects myself. Consulting isn’t wizardry.

  7. Good comments Tom. The City has capabilities on their web site to do surveys and it can be coupled with processes that would allow only Edmonds people respond and respond only once.

    Tom also seems to say we can get some representative information with properly constucted polling. So if we can why not get some thoughts together to get it going. If I understand the process about the development of a strategic plan the City will go out for bid to develop such a plan. It sounds like Tom can design and execute such a plan for about $50k. That will save the City some money and get at the answers as well. Good job Tom. I hope you bid on the project.

  8. The Economic Development Commission has requested $100,000 to get a strategic plan produced for our city. Determining what the citizens of Edmonds want is only one very small element of the plan. Many plans and studies have been done over the years for our city, but I don’t believe that a strategic plan has ever been produced.

    By the way, for those who don’t know it the surveys done by My Edmonds News can only be completed one time by the same respondent. But it is true that where the respondent lives is unknown.

  9. Thanks Tom, for some great information on polls.

    I’d like to add a few comments about the Mayor’s poll. Regardless of whether anyone thinks the results are statistically valid, the phrasing of the questions makes the results pretty useless, in my opinion. For example, say you have two people with strong feelings on the Arts and Cultural Activities. One thinks we are not spending nearly enough, and the other thinks we shouldn’t be spending any money at all on it. Wouldn’t both people say they are not satisfied?

    How do you use these results to prioritize? Let’s say you take money being spent where people are most satisfied and divert it to where they are least satisfied. That would result in taking money out of Emergency Medical Aid and spending it on economic development. Does anybody think that a majority of citizens would support that?

    I’d be interested in hearing what others think we should do with the results of the Mayor’s survey. I can’t think of any good use for the information.

  10. I agree that the survey is of little value. If the city had discretionary money after essential services are adequately funded, then a solid survey could be of value. But the city does not have enough money at this time, like most other municipalities, to fully take care of essentials. So any survey only has the possibility of being useful for medium to long range planning.

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