Still more to talk about, but Edmonds Council moving in direction of levy

Updated Wednesday morning with links to Citizens Levy Committee report and dissenting report.

Exactly what form it might take is uncertain, but a levy proposal appears to be gaining support among Edmonds City Councilmembers and could be on the ballot as early as August of this year.

Mayor Mike Cooper in March proposed a $2.26 million levy focused on restoring the police department’s crime prevention program, funding street overlays and providing money for park facilities, including the city’s beloved flower program and Yost Pool. The Council-appointed Citizens Levy Committee, led by Councilmember Diane Buckshnis, came up with its own recommendations that include multiple levies targeted at specific programs, including funding $1.5 million annually in street paving projects for three years. You can read the full Citizens Levy Committee report here and a dissenting report, offering some interesting additional perspectives, here.

Council President Strom Peterson and Councilmembers DJ Wilson and Steve Bernheim have already signaled they are ready to support a levy in some form.  Councilmember Michael Plunkett, who declared via email a few weeks ago that he would not back a levy aimed at subsidizing the city’s operating budget, said he was keeping an open mind about some type of levy proposal. And both Buckshnis and Councilmember Lora Petso, who have expressed ongoing frustration with the quality of the city’s financial statements, said that they also will be receptive to levy options although they will keep pushing for more accurate budget numbers. (Councilmember Adrienne Fraley-Monillas was absent from Tuesday’s meeting so her current stance is unknown.)

Two upcoming sets of data that councilmembers said they would like to see before making a decision: First, Cooper said that he would be presenting to the council next week a “reset” of his original levy proposal that includes the most current budget forecasts and updated numbers based on “the best information available.” And the Council is also scheduled to hear a report May 10 from pollster Alison Peters, who is currently conducting a survey of Edmonds voters on a variety of levy options.

One area that seems to be gaining the broadest support is the need for money to support street paving projects. Under the current schedule, the city’s cash-strapped street maintenance program is on an unsustainable 85-year cycle, meaning each street would be paved once every 85 years. Cooper’s levy proposal included $704,000 annually for street overlays, but he admitted that amount was less than half the annual need of $1.5 million a year.  And councilmembers have indicated they are hearing from citizens who are also concerned about the city’s backlog of street maintenance work.

Before the Council meeting started Tuesday, councilmembers met in their other role as board members of the Transportation Benefit District (TBD), formed by the city in 2008 to collect money for street projects.  City Public Works Director Phil Williams, who presented the TBD’s annual report, said that the current money collected — from a $20 additional car license fee — is used to seal cracks, repair asphalt, patch potholes and perform signal maintenance, but does not generate enough revenue to cover paving projects. The last street repaved with city resources was in 2008, Williams said, and it’s estimated that 97 percent of the city’s roads need repair.

Also on the subject of streets, the council heard a presentation from City Parks, Recreation and Cultural Services Director Carrie Hite outlining how the city’s current allocation of real estate excise tax (REET) funds is used for parks expenses. Under city policy, the first $750,000 of collected REET funds is dedicated to parks with any additional money going to transportation. However, given the current economic climate those funds have not exceeded $750,000, and councilmembers have toyed with the idea of changing the allocation formula so that streets projects receive some of the REET money.

Hite said that REET funds are currently used for a variety of parks needs, including Yost pool repairs, city playground maintenance, paving of park sidewalks, trails and parking lots, and sports field upgrades. “Taking money out (for transportation projects) will affect maintenance of parks,” she said.

Councilmember Wilson acknowledged that while the parks projects were important, streets were a high priority as well. “I am certainly ready to reallocate some of those REET funds to streets,” Wilson said.

During the citizen testimony portion of the meeting, former Councilmember Ron Wambolt read a statementthat criticized the current council for not cutting staffing and reducing employee-related expenses while considering a levy. For example, the city’s Development Services department is “at boom year levels,” Wambolt said, even though the current recession means there are few construction projects to approve.

  1. It’s my understanding the survey is being conducted by phone but I will confirm with the Mayor.

  2. I am a member of the Levy Committee and made the presentation to council in Feb of the possible types of levies the council should consider for the fall ballot. In that presentation and in our multipule reports to council we have recommend that several forms of public conversation be immediately started to get the pubic engaged and discussion city finances. Public meeting, surveys, and polling were among the ideas we presented.

    We recieved a phone call on Monday night for the polling mentioned. I asked Council and the Mayor what they knew about the polling and the Mayor answered saying he was behind the polling. I told him that while the questions were about levies they were very complicated to follow as the polling person read the long script.

    The Mayor indicated the questions are available and will be presented to Council at a future date. Teresa, maybe you could get a copy of the questions and post them and begin an additional survey to have your readeer weigh in on the issues.

    Getting these issues out there would go along way to starting public dialog on these important financial issues for Edmonds and setting the stage for informed discussion as we approach what my be one of the more important elections in our history with 4 council seats, the mayor, and possible levies on on the ballot yet this year.

    That could lead to some good discussion about the candidates positions, their thinking about city finances and taxes. Not sure but I don’t think we would have the same Church and State discussion if we stay on point.

    So Teresa, get the questions, post for all to see and let’s get some added survey information generated to augment the Mayors poll.

  3. Are you kidding me? The City needs to find ways to live within it’s existing budget/means, especially in the current economic climate. It’s funny how these people in government have no problem levying taxes and spending other peoples money. Real management is sorely lacking in government and the City of Edmonds is no exception. You don’t have to be qualified to get elected.

  4. I have seen a car tab tax imposed, water and wastewater rates increased this year, but I have not seen an increase in the quality or quanity services associated with these higher rates and taxes. I have seen a Finance Director leave after a short time on the job and a Mayor leave with the city in disarry. I have not seen or read about the extreme belt tightening measures that other cities have taken to balance their budgets. I do not think another TAX on the backs of working and retired people in Edmonds can be supported at the polls.

  5. Ryan:
    You’ve made some really relevant comments. Have you read my comments that are referenced in the last paragraph of Teresa’s narrative for this story?

  6. Hi Ryan, Here is a list of just some of the expendure cuts the City has made.
    2003 $1.2m cuts including layoff of 23 employees
    2008 $390,350 in cuts
    2009 $1.4m in cuts including City employees taking 9 furlough days

    Yes there have been tax and fee increases for some services and these increases were used to continue to provide the grade of service that had been provided before.

    As reported in the article the city has not used any tax revenues to pay for street overlays since 2008 and our streets are in need of work.

    So one of the questions we need to decide is do we want to protect our investment in streets with a new levy or just let them go. The mayor and council have not put money in the budget for several years for streets and unless the voters decide to do so it is unlike we will see any street overlays in the near term.

    Ryan, you have some good concerns and thoughts and hopefully you will want to get involved with the upcomming plan for Edmonds to create a Stategic Plan. Creating a strategic plan will give the voters an opportunity to help decide what kind of city we want and how we can pay for it.

  7. Here’s the latest from Mayor Cooper on how the polling is conducted:

    “The polling company we hired uses live phone polling as opposed to “robo” or online. This allows for a more statistically valid sample. Pollsters typically call registered voters until they get the desired demographic. That is why they ask age, gender questions etc. When the city council has a presentation from the polling company, the method is typically presented.

    “The sample is four hundred. Registered voters are contacted at the number on their voter registration regardless of whether it is landline or cell. The key to accuracy is getting the right number of responses in the different categories; such as age, gender, political affiliation, etc.”

  8. The city has a survey monkey software program that could reach beyond the readers of as there are many older individuals that don’t read the blogs.

    Yes I would be interested in the questions; however, remember Darrol that Mr Clifton did get the questions from Shoreline who did an extensive outreach while educating the public on their levy.

    I am sure Mr. Clifton was involved in this process so the city may have piggy-backed on Shoreline.

  9. Diane, I know the City had some good examples from other Cities. The point is the public would like to know what are the questions and they would like the opportunity to weigh in. So get the questions and post them on the Levy part of the City web site. Then put up a survey using the survey monkey software already in place on the City site. Then give them to Teresa and see if she would also do a survey. It would be really interesting to see what differences may exist between the 3 separate methods of asking the same question.

    The questions exists, so lets make them public and make some progress on open government. Isn’t that what your campaign is all about?

    1. I am willing to post questions – I don’t know if there are any downsides to the process by having others weigh in — for example, would having the questions posted as opposed to having them read over the phone unfairly influence the response of someone who replied online, then got a call? There is a lot of science behind surveys and I am certainly no expert.

  10. I just got a call on the levy survey and it was very professional and quick. I would think that we should waite for the professionals to do there job as knowing the questions might taint the pool as many people have all ready been called. Lets do additional survey later

  11. I am confused. I thought the pollsters are ringing people? Now there is a survey monkey that the City has up? And, why would older people, who in theory are not tech savvy (Don’t yell at me; not my thoughts. See above), would have more access to Survey Monkey.

    When is the survey completed? At a minimum, those questions should be posted once the survey is over with raw and compiled data.

    Councilwoman Buckshinis;
    Just because someone else tells me that X is correct, does not mean that I follow it blindly. I want to know what the questions ask. Aren’t you running on government transparency? I would have imagined that you would have been the first one to find a way to get the information to the public whether today or a week from now.

  12. I have concerns related to the City’s short and longer term financial situation. Local governments are highly dependent on property valuations for their revenue. Due to the Federal Reserve Bank’s low interest rate policy, current 30 year fixed mortgage rates are around 4.72%. An argument can be made that real estate property valuations, as well as the City’s revenues, are currently higher than they would be if 30 year fixed mortgage rates were at a more “normal” rate of around 8%.
    Let’s pretend the average borrower can qualify for a $1,000 a month mortgage payment. At today’s average 30 year fixed interest rate of 4.72%, assuming he puts 20% down, he can afford a house worth approximately $240,500.
    If the 30 year fixed rate rose to 8%, the same buyer can only afford a house worth approximately $170,325, assuming he puts 20% down.
    The point I am trying to make is that the historically low interest rates today may be painting a misleading picture of the City’s revenue picture. Furthermore, if interest rates ever do increase in the future, the increase in interest rates will likely impede property appreciation, negatively impacting the growth of the City’s revenues. It is possible that interest rate hikes could cause property values to fall.
    The City of Edmonds is facing very challenging economic times as are other cities and local governments. I believe the current priority should be to identify significant expense reductions that are longer term, and in some cases permanent. This is very painful and difficult to administrate, but I believe it must be strongly considered by our elected leaders and the taxpayers.

    Interest rates may remain low, but the increases we continue to see in food and gas prices may eventually motivate the Fed to initiate interest rate hikes like other countries have. Hopefully the City is closely monitoring interest rate trends and formulating strategies to the best of its ability now.

  13. Ken, you make some interesting points. As a member of the levy committee I made a presentation to council about the Edmonds financial situation. In a part of the presentation property taxes we discussed. In summary we collect 3 types of property taxes. Bond Payments, EMS and regular tax. Each are based on the values of the assessed value of our homes but each is calculated in different ways. Edmonds total assessed value has declined over the past 3 years for $7.7B, $7.0B and for 2011 it is now $6.5B. As a result, average home value has also declined. But here is how the taxes are calculated.
    Bond Payments are a known amount (about $903,108 for 2011) so the rate to collect this amount is set at $.14/1000 of assess value. In 2009 when we needed $925,105 the rate per 1000 was $.12. That means MY home value determines MY share of the tax. My home value could be lower but MY share of this tax could be higher.
    EMS tax is $.50/1000 period. So if your home value goes down so does this tax. This tax has declined in the past 3 year : $3.9M, $3.5M, $3.2M in 2011. This is the major funding source to pay for our $6.2M payment to Fire District 1. The difference is made up from Transport Fees (about $800,000) and a contribution from the General Fund for the remaining difference.
    Regular property taxes increase without a vote of the people by 1%. For the last 3 years they have been $9.3M, $9.4M, and $9.5M in 2011. The rate per 1000 has grown from $1.20, $1.35, to $1.47 in 2011. So that is way while MY home may be declining in value my tax may actually go up.
    The full presentation was given to Council on Feb 22 and can be found at the following link. The tax table discussing the above is slide 22.
    So from the City’s point of view, they always get the Bond Taxes needed, they always get the added 1% increase in property taxes but the EMS tax goes up or down based on values. Our home values often just determine our individual share not the taxes collected, except the EMS tax.

  14. Thanks Darrol….that is fantastic info. I’m running out the door to church and then baseball….I’m very interested in your info and would love to discuss it with you. I’ll review it in more detail tonight. Thanks!

  15. Taxes are often complicated. How can my house go down in value and yet I pay more taxes. Hopefully the explaination above shows how that can happen. As we look to the possibility of a fall levy I know we will have many good discussions. I just hope we can separate fact from fiction and have a meaningfull discussion of what we want services we want our local govt to do and how do we want to pay for them. Edmonds is a $75M/year enterprize for which we are all owners.

  16. While the affect of falling property values will have a minimal affect on the city’s property tax revenues, as Darrol has described, there is still some validity in Ken’s concern – because falling property values will cause reductions in sales tax and real estate excise tax collections.

    Higher interest rates put a damper on the sales volume of homes, as well as home prices. The direct result of that is reduced sales tax from new construction, and reduced excise tax from the sale of all real estate.

    There is also an indirect affect of falling home prices. And that is reduced equity in homes against which owners can borrow to make other purchases that generate sales tax, and jobs.

  17. Perhaps falling property values will have more than a minimal affect on the city’s property tax revenues as I stated above. The new assessments for condos have just been issued by the county; the average value has been decreased by a surprising 15%. If the same applies to single-family homes, then the overall affect on the city’s property tax collections will be a decline of near $400,000.

  18. See 22 above. Regular property taxes will go up by 1% if council approves the annual increase. Taxes to pay the bonds will be what is needed to make that payment and EMS will go down or up in the same proportion as the home values change. EMS taxes which pay for our fire services is $.50/1000 so as home values go up or down so do the EMS tax.

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