2012 Property Tax Levy Discussion Draws Strong Opinions

Contrary to the regarding the 268th Avenue S.E. Annexation during Monday night's City Council meeting, the hearing to discuss estimated revenues and the setting of the 2012 property tax levy inspired much less public input though councilmembers had strong opinions on the matter.

According to a memo from Finance Director Stephanie McKenzie to Council (page 357 of the council packet), the staff is looking at a tax rate of $1.31 per $1,000 assessed value for 2012 versus the $2.07 per $1,000 in 2011. This means a home with an assessed value of $250,000 would see a tax decrease of about $16 per month.

The decrease is largely attributed to an 89-cent rollback the Council directed staff to implement to help ameliorate the impact of the new Fire District No. 28 property tax levy voters approved last November.

The tax cut means the city will see $834,000 less in levied tax revenue for 2012 than in 2011, according to McKenzie's memo.

And the impact to the city's ability to fund services would be drastic, said City Administrator Mike Thomas, who provided supplementary scenarios for Council that did not necessarily include the full 89-cent rollback.

That drew a strong condemnation from Councilman Mike Ennis who reminded his fellow councilmembers that they made a promise to voters last year when considering the that the city would roll back property taxes to balance the effect of the annexation such that the net impact to residents would be zero.

And for the city and staff to now look for ways to not honor that promise, "I don't think it's appropriate," he said.

Councilmember Rich Elfers stated that at the time of the fire annexation vote last year, he made no such promise because he didn't want to make a promise he couldn't keep. The 2012 budget needs to be able to preserve core city services, he said.

The lone public voice was given by resident Hoke Overland, who said he'd support the Council in doing what it needed to fund core services. "For a healthy, thriving city, you need good roads and you need police," he said.

McKenzie offered that since 2004, the city's adopted budgets -- prior to any amendments being made -- have varied in that some were balanced between operating expenditures and revenue, others saw higher revenue than expenditures, and still others saw higher expenditures than revenue.

In the latter scenario, the city has historically dipped into reserves, but it can't keep doing so. Otherwise, in two years, the city will run out of money, she said.

There was no action on Monday as it was a first reading of the property tax levy ordinance. There will also be a second public hearing on the setting of the 2012 levy during the November 14 Council meeting, which begins at 7:30 p.m.

The Council continues its budget discussion Wednesday night in the second of four budget workshops. It expects to cover library and community services, outside agencies, arts, parks, the Expo Center, community development, property management and general fund subsidies. The workshop begins at 7 p.m. at City Hall and the public is invited to attend.

In other news:

• Community Development Director Erika Shook presented updated information on three site-specific amendments to the city's comprehensive plan, which were already reviewed and earlier this year. A public hearing on the matter drew comments from three citizens -- two affiliated with the applicants for the amendments and one, Overland, who urged Council to consider the cost of providing services versus tax revenues gained from such developments prior to approving the amendments. There was no action on the corresponding ordinances as they were all first readings. They had to do with:

Fiske Apartments: Changing 9.21 acres from single-family residential to multi-family residential and changing zoning designation from R-2 (Moderate Density Single-Family Residential) to R-4 (Multifamily Residential)
JE Work: Changing 37 acres from single-family residential to mixed density residential and changing zoning designation from R-2 to RHMP (Residential Mobile Home Park)
Finn Investments/Dave Treat: Changing roughly two acres from commercial to multi-family residential and changing zoning designation from Highway and Community Business to R-4. The proposal also includes a zoning code amendment eliminating the maximum size of an assisted living facility, which is currently 60 units. Instead, size is determined by the size of the building that meets development standards required by the zoning code.

• In his Chamber of Commerce committee report, Councilman Sean Krebs indicated that the Chamber's executive board is looking to the city for help regarding the staffing of the Visitor's Center following the exit of executive assistant Teresa Luedeke last week.
• In his Public Works committee report, Councilman Jim Hogan reported that prices for natural gas continue to remain low and therefore got approval from Council to purchase a 40 percent hedge of natural gas for the winter of 2012 at $5/decatherm or less. Because of this savings, the committee is recommending that city staff look into lowering natural gas rates by 5 percent for city consumers.
• City Planner presented information on the Meadow Park Preliminary Plat application. As a first reading of the ordinance, there was no action but a discussion ensued about the level of service for the intersection of Warner Avenue and Semanski Street, which is currently rated an "E" but expected to degrade to "F" by 2017. Ideas for improving the intersection included a compact roundabout and traffic signal, but there is no funding to support that work currently, said Public Works Director Chris Searcy.