Councilmember Diane Buckshnis: My perspective on the levy

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By Diane Buckshnis

In addition to being a participant of the 2009 Levy Committee, I spent months with the 2010 Levy Committee, providing them with my research and listening to their findings. The committee did a significant amount of research encompassing expenditures, revenues, financial management/reporting and compliance to our financial ordinance. It also met with other cities’ financial officers, as well as the Superintendent of the Edmonds School District, to gain insight regarding the requisites to pass a voter-approved levy.

While doing research for our financial reporting policy, I spent months investigating other cities’ financial statements and Governmental Financial Officer Association policies and meeting with other finance officers from neighboring cities. As I have stated on many occasions, my largest concern has been that the public is not afforded the financial clarity found in other cities,  which would be a road map as to why a levy is needed. I am hopeful that eventually the administration will comply with the financial ordinance that was unanimously approved by the Edmonds City Council in April 2010.

Next year, according to the City’s financial forecast (for which supporting information has been requested), our general fund projections will not meet the one-month reserve and it is off (down) $600,000. That number does not include a $1.9-million “catastrophic reserve” and a $1.3-million reserve potentially targeted to changing health insurance to self-insurance. For this reason, the levy committee, mayor and two councilmembers recommended a $1 million general fund levy.  Since council is still engaged in labor negotiation, certain council members are not supportive of this type of levy.

The levy committee recommended individual targeted levies and I concur with this idea. This approach is fair and allows citizens the right to participate in the budgetary process; it acknowledges the personal economic situation of many and the reluctance of some to support additional taxes.

Despite what political strategists fear when utilizing a multiple levy proposal — that all will fail — I believe if levy proposals are clearly and concisely defined and provided to the voters in November in a simple and straightforward format, some, if not all, will pass. We also need to consider the possibility that constituents may not have the appetite for a larger, more broadly defined, general fund levy. Can the political strategists guarantee that this type of levy will pass?

The tax increase for these propositions is based on a $375,000 property tax appraised value. The levies will be for three years and tied to the consumer price index (CPI), which was used by the City of Shoreline. Although more specific details will be provided by the respective department directors, the breakdown of the four proposals is provided:

Proposal 1 is $700,000 for street overlays and it is approximately one half of what is needed yearly. It is basic blacktop and will cost the taxpayer $41 a year or $3.39/month.

Proposal 2 is $400,000 for city building deferred maintenance and will cost the taxpayer $23 a year or $1.94/month. This proposal is shy of estimations, but with the current economy, costs to upgrade should be less expensive. A good example was the restoration of the Edmonds Museum, which was budgeted at $100,000 and came in at $78,000.

Proposition 3 is $300,000 for parks upgrades and deferred maintenance; passing this proposal will cost the taxpayer $17 a year and will cost the taxpayer $1.45/month.

Proposition 4 is $1 million representing half of the deficit of our obligation to Fire District One.  Fire District 1 can be separated from the general fund so that citizens can see that levy money dedicated to this expense. Approving this proposal will cost the citizens $58 a year or $4.84/month.

If all proposals were to pass, it would cost the taxpayer approximately $11.63 a month or about $140 a year.  Councilmember Petso has said she will be “sharpening my pencil” as she would like to get the yearly cost down to $100 a year…so stay tuned.

18 COMMENTS

  1. The need for street overlays,building maintenance, parks upgrades, and a supplemented general fund reserve are all worthy of funding. What I, and some others like Joan Bloom, have been frequently objecting to is the source of that funding. Council members, with the exception of Michael Plunkett, are only interested in raising property taxes to get the funds; they are showing no interest in cutting expenses – compensation to be specific.

    The city has done its regular compensation survey for 2011, and as a result of those findings the pay ranges have been increased. However, not at all considered is the fact that the employees of many of the surveyed cities are having their compensation reduced by continuing furloughs, pay cuts, etc,

    For the years 2009, 2010 and 2011, let’s look at what’s happening in comparable
    cities. I also believe that it would be valuable to have Snohomish county, King county and state workers included in the benchmarking, as those workers have made considerable concessios. The results of that benchmarking would be a good indicator for what should be done with the compensation for Edmonds employees.

    So I say to the mayor, city council members, and to the officers of the various unions, show us some coureagous leadership by determining just how the concessions given by the employees of Edmonds stack up against other government workers in our state. The union negotiators do a thorough job learning how the compensation of their members stacks up against their peers; it’s very likely that they’re also well acquainted with the concession data.

    Finally, I believe that there is merit in the concern about the staffing level of Development Services. The number of construction projects started to crash 3 years ago. Further evidence of the sharp reduction in construction is the frequent cancellation of Architectural Design Board (ADB) meetings. Yet the staffing level of those departments involved with construction activities has not been reduced. One of Murphy’s Laws says tha work expands to fill the time available. So we are not only not benefiting from reduced staff savings, there’s a good possibility that staff will have to be increased when construction activity returns to a more normal level.

    A 3-hour council work session on levy options has been scheduled for June 28th. I suggest that the council needs to start off the meeting by taking some action on expense cuts. If some serious work is done with expenses it is more likely that a reduced levy would pass in November.

  2. Ron B.:

    As you probably guessed, I didn’t see your first posting before I wrote mine. I don’t think that I need add anymore at this time except to say that I totally agree with the following paragraph you wrote that is really the gist of our messages:

    “It appears to me blocking any new taxes is the only way we can get our city government to hit a big RESET button with respect to addressing expenses and if necessary reorganize operations. These projected deficits are simply not sustainable. I’m afraid if we give in to any tax increases (at this time) it will just be more of the same.”

  3. * The Seattle Times published an interesting article about public employee salaries that listed the Fire Department leadership as the highest paid employees in Seattle, especially after adding O/T.
    * I’ve asked the Mayor twice for info on which streest would receive an overlay IF a levy passed. No response. Big issue. Which neighborhoods would receive the benefit from all we taxpayers, knowing that any further overlay would be years down the road.
    * I don’t know of many, if any, city governments that completed ISO, but it’s an interesting consideration give the usual benefits realized by businesses. But first…you gotta have the money to pay for the process.

  4. Jim, Good article in the Times. Before we sold the FD to FD1 our rate of growth for the non capitlal part of the fire service exceeded 9%/year. Now the growth rate is about 2%. Before the sale the costs were over $8m and now down to $6.2m. The sources of funds for the $6.2 are EMS taxes=$3.2m, transport fees bring in another $700+ and the remaining $2m+ come from the GF. Diane’s idea for a levy dedicated to helping pay about half of the contribution from the GF while it would not be revenue netural it would add the the GF while beginning to provide more transparency to how we pay for FD1. Council has a decision to make in 2014 on what to do about the contract with FD1 while there are other forces advocating a larger fire district in the form of Regional Fire Authority we still have a choice of how to provide our fire service. The current method costs about $.85/1000 and the estimates for a RFA are much much higher. We need to urge council to study this issue starting now in order to make sure we make the correct decision for Edmonds. Those pushing the RFA are pushing for an election in the fall of 2013, one year before the Edmonds Council is slated to make the a decision in 2014.

    On street overlays a permenant source of funds are needed to pave our streets on a cycle that paves residential streets every 30 years or so and arterials on a cycle of 18-20 years. Look at the map at this link to see the condition of the streets around town.

    http://www.ci.edmonds.wa.us/transBDTransProjectsRank1.stm

    If our voting for streets is based on the notion of mine first and the others can wait we will not ever end up working for a plan that dedicates money to put all the streets on the correct cycle. The bottom line is the right way is to do all the streets on a cycle and we are 3-4 years without doing any. The cheapest method is grind and fill but if the roads are allow to deteriate then sub surface work will be needed and that can double and tripple the costs. The sooner we begin the more we reduce the risk of major repairs to go along with a simple overlay.

  5. Ron and Ron, Both of you have copies of the cost and tax model for the FD1 payments and a summary is discussed in 6 above. I am not sure I understand your ideas about not supporting any levy until we cut compensation, people, and benefits. Streets need $1.5m per year just to stay on the correct cycle. There is a list of deferred maintenance items for buildings and parks that will take $700k per year for 3 years just to catch up. Is you idea to save enough money from the cut of headcount, compenstation and benefits to pay for these other items? Or is your idea to just use these items as a lever and then if govt responds with some savings we can then go to the people for money for roads, buildings and parks?

    If you want to generate enought money for just roads it would require us to reduce headcount by about 15 people. The Fire Dept head count was 53 in 2004 and when we sold the dept it was 54. The non fire dept headcount in 2004 was 271, and stayed around that level until 2009 and 2010 when in was down to 266. So to just do roads through headcount reduction would take a reduction of about 15 people more to do the building and parks stuff. Total compensation is about $13m and benefits are about $4.2m. So to do the roads alone it would take a wage freeze to save about $300k and another 10% roll back to just do roads. If we used the new state methods of a 3% rollback that would give us about $400k to work with. To get enough savings just from benefits it would take about a 65% roll back to just do the roads. Not sure how we could make the comp and benefits cut to get the road money so it would have to come form headcount cuts. Development Services are always the target dept because building permits are down. The have 16 people so to do roads would mean just closing the doors.

    While a combination of headcount reductions, comp and benefit reductions could be made to get road, building and park money I would like to see someone make a suggestion of what combination of reductions they would like to see rather than just saying cut the comp, benefits and headcount. Just talking about it is not as useful for th discussion as actually proposing specific numbers.

    I think we are finally getting around to a new normal for government with the cuts we are seeing at the state level and now we need to see what we want to do at the local level. One way to make your feeling known is to participate in the upcomming development of a Strategic Plan for Edmonds. One of the keep components is for the citizens to help define what we consider to be basic services and how we want to pay for them. All who take the time to offer their opinions to MEN should also take the time to offer they suggestions to the Strategic Planning process. Then all the pushy special interest groups in town can have a place at the table and we can all work on some solutions. Sounds like a lot of fun to me. I hope all off us make our ideas known during the process.

  6. Darrol:

    I must be a lousy communicator. I have frequently said that compensation cuts would merely reduce the amount of levy needed, and I don’t recall ever speaking about cutting benefits – that’s probably better handled during the current labor negotiations. I think we all well understand the arithmatic of the issue, so wouldn’t propose something that would causes closing the doors of Development Services. And, by the way, when I say Development Services I’m including Engineering as a component of it.

    At this point in time I am unable to quantify what a reasonable figure is for compensation cuts, and neither can anyone else, but I have provided the methodology for determining what would be appropriate. It’s the benchmarking that I have spoken and written about numerous times – re-read #2 above.

    The following is a portion of a statement by Joan Bloom that hits the nail on the head. “It is my opinion that Council should immediately stop focusing on how to manipulate citizens into voting for a levy, and, instead, direct the Mayor to address these problems. Once it has been demonstrated that the Mayor is able and willing to address what has gotten us into this mess, Council can come back to the citizens with a, hopefully, justifiable appeal for more money.”

  7. Joan always has some good thoughts and through her actions she has lead efforts to make major changes in town. Diane is trying to get the public engaged in a number of issues and I applaude her efforts. Maybe it is time to rally around some ideas and move them forward with the same vigor as we all sometimes bring to MEN. I would like to see our great thoughts put some meat to what we may mean about transparency and what we main by finacial sustanibility.

  8. Ron W points out that the Engineering Dept is included in his thinking. So the budgeted headcount numbers look like this when the Engr and Dev Svc are combined. In 2005 the combined number was 28.8, 2006=26.8, 2007,8,9,10,11 all at 27.1

    Head count for all depts has declined from 219.1 in 2005 to the 2011 budget level of 208.9 or about 10.2 headcount reduction. These are all non fire headcount. If we use the new state roll back of 3% that would produce $400k. The budget going forward also has about $300k of increases so a 3%roll back and wage freeze would generate about $700k. Just some data, not opinion offers or implyed.

    So if we did the freeze and rollback that would reduce the road, building and park funding requirement from $2.2m down to $1.5m. Just some more data, no opinions.

    So if some cost cutting were to occur would that lead to support to do some targeted levies to fix the roads, buildings and parks?

  9. Ron B and Jim U, Are you interested in the facts about the roads. Things like the number of lane miles we own, the lane miles that are measured as in bad condition, the information on how the conditions are measured, the rate of decline on roads that have been studied, the cost to do grind and fill per lane mile. This data may help to understand the idea of the cycles that Public Works has been talking about and help us all see if we really have a road problem or not. Public Works is not just guessing, they have data that would help us all understand the road issue. This is not meant to be a smart alec response from a person paying taxes in Edmonds for 37 years. But if you have paid taxes more or less years your voice to me is equally important.

  10. Darrol,

    I appreciate that you want to move on to the details of how to address our expense problem so that it can then be decided how much we need in a levy to support us moving forward. My point, above, as quoted by Ron W in his post #10, is that COUNCIL must acknowledge that we have an expense problem and direct the Mayor to thoroughly review our budget and come back with suggestions of cuts in operating expenses.

    To my knowledge, thus far not one council member has openly stated that they are in agreement that we must CUT EXPENSES. Please correct me if I am wrong about this. In fact, DJ made the following statement at the May 17 council meeting, taken from the minutes of that meeting:

    Councilmember Wilson suggested Councilmembers Fraley-Monillas, Petso and Buckshnis provide the Council a levy proposal. HE REITERATED HIS POSITION: HE WANTED TO FUND EXISTING SERVICES AND STAFF; THAT WAS NON-NEGOTIABLE and he wanted to buy back the police officer that was cut and Crime Prevention. Because he felt November was a terrible time to place a levy on the ballot, he was likely not going to support a levy on the November ballot regardless of what it contains. (my caps)

    DJ also stated the following, again in the May 17 meeting minutes:

    It takes political courage in this economic climate to make a tax proposal; Mayor Cooper has brought a proposal, he made a proposal, Council President Peterson brought one, and Council President Peterson and he worked on one.

    So, not only is DJ stating that funding existing services is NON-NEGOTIABLE, he is asserting that he, Mayor Cooper, and Strom are all politically courageous for proposing to increase our taxes. I don’t know what he means by “political” courage, but in my opinion it takes a lot more courage to focus on cutting our expenses, than to focus on how much to ask citizens for THIS TIME. We all know that, even if a levy miraculously passes, unless expenses are cut we can expect to be asked for more money in the future.

    Ron W,

    Thank you for having the courage to continue to present these issues to council (since October of 2010!), despite the fact that they appear not to be listening. It must be frustrating to be asked to come up with specific cuts as well.

    I suggest that council turn their June 28 Levy work group meeting into a meeting that begins to look at cutting expenses. After all, the deadline for putting an August levy on the ballot (May 24) has passed, and DJ says he is unlikely to vote for a levy to be put on the November ballot anyway. Why waste any more of council and citizen time focusing on the wrong thing?

  11. Joan, again some great points. Edmonds is underunning the budget today and that is likely to continue throughtout the remainder of the year. Can they cut more. Yes, I have shown some council members and the mayor how to cut the budget WITHOUT reducing any existing services. To date no one has even acknowleged the validity of the cuts. Our former finance director agreed with my analysis and no concerns of implementing my suggestions.

    Diane and Michael were highly engaged in the workings of the levy committee and I would have to check the minutes for the exact wording of their statements but I recall hearing each of them say things that suggested they understood and agreed that some cut were needed. I guess we could ask them via email to see what they might say but that is my recall of the discussions. So I think Diane and Michael could be in the camp of willing to cut if they can get the data to support it.

    Some members of the levy committee spent a lot of time ane energy doing the research and analysis on expenses and have provided detailed information about their findings. We had CPA types on the levy committee and I think they did a pretty good job of sorting out some facts. Some on the council did not want this committee to be formed in the first place and some continue to ignore any of the work. Some on council just keep going back to the earlier citizen levy teams and suggest what they have said should be the only input to our current thinking. While much of the early work was good, things have changed in the time that has passed. The existing levy committee looked at and accounted for the earlier view and tried to up date the information to be the best we could get to at this time and place.

    Joan, your points are all valid and I am not trying to say anything to discredit your points. I would like to build on your points and move forward with some ideas and notions that we can all support, even if DJ will not vote for it.

    I think Edmonds is uniquely positioned for some meaningful discussion about our future as we move toward the Aug deadline, the Nov ballot and the citizen driven Strategic Planning process that is just about to be launched. Some Council members are already positioning to put down the citizen driven effort for the SP. 70% of the people recently polled expressed support for the SP as a necessary tool to help move Edmonds forward. When is the last time we had anything get a 70% acceptance rate.

    Joan, keep up the good work. I will be listening and trying to help with your efforts. After all, it was throught your efforts that we have made some major changes in our govt and your thoughful efforts are likely to lead to more change.

  12. Would someone please explain to me what “pro clubhouse” is? Who has membership in it and how does one gain membership?

    I’m still waiting for council to step up and take a cut on their pay. I do not believe council salary is the only source of income for any of the council members: we have five Edmonds businessmen/businesswomen who have working spouses; one retired banker (need I say more); one retired state worker. Bernheim is not running but, Frank Y. is also a downtown businessman.

    Because I don’t make money unless I actually work, I need to get back to work now.

  13. Priya:

    Are you seriously suggesting that council members should be paid based upon their need? That would certainly be an unprecedented approach to compensation.

  14. No. I am suggesting that before cutting salary among the people that work for us, that Council consider cutting its own salary first. My outline above is merely to point out that, unlike the folks who work for Edmonds, all Council have alternative sources of income.

  15. Sorry about my typos above. That’s what happens when I try to parallel process. I really do need to get back to work. Adios. Will check back tonight.

  16. For those of you who are interested, I promised to post a link to the 2010 report on land use applications. With Mayor Cooper’s assistance (thank you Mayor Cooper) the information is now posted on the city website:

    http://www.ci.edmonds.wa.us/CityDepartments/PlanningDept/Edmonds_120-day_report.pdf

    Mayor Cooper also forwarded my question, below, to Sandy Chase (who handles public record requests) and Sandy received an answer to my question from Rob Chave. Thanks also to Sandy and Rob for responding so promptly.

    “I also notice that in 2002 there were 188 total land use applications, and only 8 of those were miscellaneous staff decisions. In 2010, there were 64 land use applications, and 38 of those were miscellaneous staff decisions.

    What are miscellaneous staff decisions, and why are they so much higher in 2009 and 2010, than they were in all other years?”

    Sandy responded:
    I checked with Rob Chave, Planning Manager, and he responded as follows:

    “In general, more permits are now staff decisions than they were in years past. As an example, in 2002 there were a total of 82 ADB design review decisions. In 2010 we had 5 design review decisions made by the ADB and 23 administrative design review decisions — but many design review decisions are now incorporated into the review of building permits and aren’t tracked separately at all (e.g. signs). The code was significantly amended in 2007 to shift more design review decisions to the staff level so that less goes to the ADB (especially in a ‘down’ economy when there are fewer large-scale projects), while more is done as a staff decision… either separately or in conjunction with building permits. Building permits are not GMA permits, so they also don’t show up in the annual GMA-mandated permit processing report, which is intended to track how well a jurisdiction is keeping to its 120-day processing timelines.

    This is also why when reporting overall permit activity in the city we tend to focus on building permit activity… it’s less subject to fluctuation due to code amendments or administrative process changes, and more closely tied to overall staff activity since people in Building, Planning, Engineering, and Public Works are all involved in the reviews. It also accounts for the lion’s share of the permitting revenue the city receives.”

    GMA is Growth Management Act.

    As Ron Wambolt reported in an earlier post about Development Services, 2009 building projects totaled approximately 84 million, while in 2010 projects totaled approximately 18 million.

    Ron, please confirm these stats. I’m functioning from memory, since I can’t recall in what conversation you presented this.

  17. Joan:

    Your memory is correct. Here’s the info:

    Ron Wambolt on May 5th, 2011 at 10:16 am

    Perhaps Joan will get the permit info, but here is the data on new construction.

    Value Tax Rate Property Taxes

    2007 $87,213,448 $1.83 $159,600

    2008 $100,431,960 $1.63 $163,704

    2009 $84,951,003 $1.82 $154,611

    2010 $18,563,567 $1.98 $ 36,757

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