CITY OF SHORELINE
SHORELINE CITY COUNCIL
SUMMARY MINUTES OF REGULAR MEETING
Monday, October 25, 1999
7:30 p.m.
Shoreline Conference Center
Mt. Rainier Room
PRESENT: Mayor Jepsen, Deputy Mayor Montgomery, Councilmembers Gustafson, Hansen, King, Lee and Ransom
ABSENT: None
1. CALL TO ORDER
The meeting was called to order at 7:32 p.m. by Mayor Jepsen, who presided.
2. FLAG SALUTE/ROLL CALL
Mayor Jepsen led the flag salute. Upon roll by the City Clerk, all Councilmembers were present.
3. REPORT OF CITY MANAGER
Robert Deis, City Manager, mentioned that the Customer Response Team (CRT) telecommunications system malfunctioned during the weekend for the first time. He said staff is investigating the repair or replacement of the equipment.
4. REPORTS OF BOARDS AND COMMISSIONS: None
5. PUBLIC COMMENT: None
6. APPROVAL OF THE AGENDA
Councilmember Hansen moved to approve the agenda. Councilmember Lee seconded the motion.
Deputy Mayor Montgomery moved to amend the agenda to consider item 10 (a), Transmittal of the 2000 City of Shoreline Proposed Budget, before the public hearings. Councilmember Hansen seconded the motion. Councilmember Ransom opposed the motion, asserting that it would postpone the opportunity for some members of the audience to speak. A vote was taken on the motion, which carried 6-1, with Councilmember Ransom dissenting.
A vote was taken to approve the agenda, as amended, which carried 7-0.
7. CONSENT CALENDAR
Councilmember Hansen moved to adopt the consent calendar. Councilmember Ransom seconded the motion, which carried 7-0, and the following items were adopted:
Minutes of Dinner Meeting of October 11, 1999
Approval of expenses and claims as of October 12, 1999 in the amount of $882,705.21
Motion to accept the low bid for swimming pool additional parking and to authorize the City Manager to execute a contract with Cascadia Civil Inc. in the amount of $212,746.40 and to authorize change orders up to 10% of the original contract amount
Ordinance No. 209 adopting a Comprehensive Plan amendment and zoning designation for three parcels in the A-2 Annexation Area
Ordinance No. 211, amending Ordinance No. 184, as amended, by increasing the appropriation from the Roads Capital Fund and authorizing expenditures for a capital project to develop the Aurora Corridor; and motion to authorize the City Manager to execute the funding agreements with the Washington State Department of Transportation to secure the TEA-21 grant for $1,500,000, and to authorize the City Manager to execute a consultant agreement with CH2MHill not to exceed $185,185, which will cover the work for the remainder of 1999
(a) Transmittal of the 2000 City of Shoreline Proposed Budget
Mr. Deis mentioned that the Government Finance Officers Association (GFOA) approved the 1999 City of Shoreline budget document under its distinguished budget presentation award. He explained that the GFOA program is a benchmark for public-sector budget presentation.
Mr. Deis went on to discuss the proposed budget for 2000. He highlighted Initiative 695 as a key variable. He reviewed the criteria under which staff developed the proposed budget, and he discussed the key priorities reflected in it.
Continuing, Mr. Deis reviewed charts comparing elements of the proposed budget for 2000 with the 1999 budget. He explained that passage of I-695 would create a $2.1 million shortfall in 2000, and he reviewed possible expenditure reductions and potential revenue increases.
Finally, Mr. Deis noted the following dates for Council activity related to the 2000 proposed budget: the first budget workshop on November 15; the second workshop and the legally-required public hearing on the property tax levy on November 22; the third workshop, if necessary, on November 29; the public hearing on the proposed budget on December 6; and Council adoption on December 13.
8. ACTION ITEMS: PUBLIC HEARINGS
(a) Public hearing to consider citizens’ comments regarding adoption of utility taxes in the City of Shoreline
Mr. Deis reviewed the staff report. He explained that staff prepared two ordinances for Council consideration: Ordinance No. 210B, which establishes utility taxes contingent upon passage of I-695, and Ordinance No. 210A, which does not include a contingency clause.
City Attorney Ian Sievers distributed a revised version of Ordinance No. 210B and explained the two minor changes in it. He said staff made the same changes to Ordinance No. 210A.
Mayor Jepsen opened the public hearing.
(1) Frank Roesler, 1844 N 199th Street, opposed the adoption of utility taxes prior to the public vote on I-695.
(2) Sally Granger, 16804 16th Avenue NE, opposed the adoption of utility taxes. Noting that Seattle City Light has proposed rate increases and that she lives on a fixed income, she said she cannot afford to pay utility taxes.
(3) Howard G. Thompson, 19301 2nd Avenue NW, opposed the adoption of utility taxes prior to the public vote on I-695. He said the impact of the initiative will not be as significant as predicted.
(4) Bill Meyer, 358 NW 189th Street, commented that Shoreline residents will pay taxes to support the community; however, he questioned whether the proposed utility taxes are necessary to support the community. He said the City ignored the will of the voters who passed Referendum 47 by increasing property taxes last year by six percent. He distributed a letter with additional comments.
(5) Stan Terry, 15811 28th Avenue NE, supported Ordinance No. 210B as a responsible course of action. He commented that the State legislature and the supporters of I-695 have not acted responsibly.
(6) Kathy Halliburton, 18315 Wallingford Avenue N, said it is more responsible to establish utility taxes contingent upon passage of I-695. She advocated Council consideration of local improvement districts as a means of funding capital projects. She asserted the need to mitigate the impact of utility taxes on telephone and cable television services for low-income residents.
(7) Daniel Mann, 17920 Stone Avenue N, opposed the immediate adoption of utility taxes, noting that business owners have not had enough opportunity to assess the impacts of the proposed taxes.
(8) Terry Green, 613 N 179th Street, represented the Highland Ice Arena. Noting the high utility costs of her business, she asserted that the proposed utility taxes will affect it disproportionately. She advocated a more balanced, equitable approach.
(9) Edsel Hammond, 18541 Burke Avenue N, asserted that Council adoption of utility taxes prior to the vote on I-695 and the election of new Councilmembers is irresponsible.
(10) Nancy Marx, 505 N 200th Street, supported Council consideration of utility taxes. Asserting that cable television service is a luxury, she questioned the proposal to tax it at a lower rate than other utility services, which she identified as basic necessities.
(11) George Mauer, 1430 NW 191st Street, commented that both of the proposed ordinances would thwart the objective of I-695 to reduce taxes. He encouraged Council to await the decision of voters on I-695 before acting to increase taxes or fees in Shoreline.
(12) Russell McCurdy, 17532 Aurora Avenue N, opposed the adoption of utility taxes prior to the public vote on I-695. He advocated that representatives of Shoreline residents, businesses and organizations meet to discuss City needs and resources after the election on November 2.
(13) Doug Syring, 20336 3rd Avenue NW, advocated that Council trust voters to approve new taxes if they are necessary.
Councilmember Lee moved to close the public hearing. Councilmember Gustafson seconded the motion, which carried unanimously, and the public hearing was closed.
Mr. Deis explained that the City already imposes a five-percent franchise fee on cable television service providers. He said staff proposed a one-percent tax on cable television services to achieve the same six-percent rate as that proposed for other utilities.
Next, Mr. Deis confirmed that Council adopted a finding of substantial need last year, enabling the City to collect the full increase in assessed value. He explained that the City designated the resulting revenues to capital needs.
Ordinance No. 210A establishing utility taxes and establishing utility tax relief for eligible citizens
or
Ordinance No. 210B establishing utility taxes contingent upon the passage of Initiative 695, and establishing utility tax relief for eligible citizens
Councilmember King moved that Council adopt Ordinance No. 210B. Council-member Hansen seconded the motion.
Councilmember Ransom favored Ordinance No. 210B over Ordinance No. 210A. However, he expressed concern that voters will see the contingency clause of Ordinance No. 210B as a threat that if they vote for I-695 the City will impose utility taxes. He noted the opinion of some members of the public that Council is acting prematurely to consider utility taxes. He asserted that Shoreline voters would support funding for capital projects if the City presented a case for their necessity. Noting that the proposed utility taxes will be the first tax rate increase by the City, he said the City should present a persuasive case of the need for the taxes before implementing them. He commented that gambling tax revenues are sufficient to cover the $1-2 million cost of delaying implementation of the taxes until the public can vote to approve them. He advocated that Council not approve the utility taxes until it can include the public in the review process.
Deputy Mayor Montgomery expressed her appreciation for the feeling with which people expressed their comments during the public hearing. She said citizens frequently express concerns to her about the City’s infrastructure (e.g., roads, parks, surface water management). She asserted that the City does not have the revenue it needs to meet the demands that many citizens have. She explained her concern about depending on gambling tax revenue. While acknowledging that I-695 has created a "semi-crisis," she said the City’s revenue needs are independent of I-695.
Councilmember Hansen commented that Council consideration of utility taxes is unrelated to I-695. He said it is the responsibility of the Council to establish a sound financial base for the City, and adoption of a utility tax represents one of the final pieces of the City’s financial package, providing stability in basic City revenues. He advocated that the City not collect the full six-percent increase in valuation when Council adopts the 2000 property tax levy, and he favored a reduction in the City levy. However, he said a reduction will not be possible without a sound financial base for the City. He opposed City reliance on gambling taxes as an unstable source of revenue. He noted that Shoreline residents have paid less in taxes during the four years since the City incorporated than they did previously as part of unincorporated King County. He stressed the importance of the revenues to meet the City’s infrastructure needs.
Councilmember Gustafson noted his campaign commitment that any proposal to increase taxes should go to a public vote. He opposed the proposed adoption of utility taxes. He said the City should wait to learn the results of the public vote on I-695 and then determine how to proceed. He favored convening a citizen committee to consider City needs.
Councilmember King said she supports Ordinance No. 210B because the City needs a stable income. She favored the formation of a committee to consider City needs and potential revenue sources in the event that I-695 does not pass.
Councilmember Lee said she also supports the adoption of utility taxes contingent upon the passage of I-695. She noted that Ordinance No. 210B includes tax relief for eligible citizens. She asserted that I-695 is irresponsible because it cut taxes without identifying expenditure reductions. She said the City is not seeking funding for a specific capital project, nor is it raising taxes beyond its present budget needs. She also favored the formation of a citizen committee to establish support for additional taxes to fund additional needs.
Mayor Jepsen agreed with Deputy Mayor Montgomery and Councilmember Hansen. He asserted that the target of I-695 is the State legislature and its inaction on tax issues. He said it is difficult for voters to know that the City receives Motor Vehicle Excise Tax (MVET) revenues. He stressed the heavy impact that passage of I-695 will have on the City. Asserting that the State is not likely to compensate cities for losses resulting from I-695, he said the City must develop a solution. He expressed concern about relying on gambling tax revenues, noting that a gaming association is now lobbying the State to lower the maximum tax rate that cities can impose on gambling. He said the City has done a great job during its first four years to provide many services with limited resources. He stressed his concern about the City’s capital needs, and he identified utility tax revenues as one means of meeting those needs. He commented that he would support utility taxes regardless of whether I-695 passes.
Councilmember Ransom said utility taxes are justifiable. However, because the taxes will be the first tax rate increases by the City since it incorporated, he asserted that Council should convince residents and businesses of the justification prior to implementing the taxes.
Councilmember Hansen emphasized his responsibility as an elected official in a representative government. Referring to Section 11 of Ordinance No. 210B, he noted that Shoreline citizens have an irrevocable right of referendum.
Councilmember Gustafson reiterated his commitment to present any proposed tax increase to Shoreline citizens for a public vote.
Councilmember Lee clarified her intent in supporting Ordinance No. 210B to protect the City from the budget shortfall that would result from passage of I-695. She agreed that Shoreline citizens should review and vote on taxes proposed to raise funds to meet additional needs.
A vote was taken on the motion, which carried 5-2, with Councilmembers Gustafson and Ransom dissenting, and Ordinance No. 210B (identified for the record as Ordinance No. 210) passed. It will only become effective upon passage of Initiative 695.
(b) Public hearing to consider citizens’ comments regarding proposed Resolution No. 158(A) and (B) to either support or oppose Washington State "Initiative No. 695, an act relating to limiting taxation by: limiting excessive license tab fees; limiting tax increases by requiring voter approval; repealing existing licensing fees; adding a new section to chapter 46.16 RCW; adding a new section to chapter 43.135 RCW; creating a new section; and providing an effective date"
Assistant City Manager Larry Bauman reviewed the staff report.
Mayor Jepsen opened the public hearing.
(1) Stan Terry, 15811 28th Avenue NE, praised Council for responsibly passing Ordinance No. 210B. He advocated that Council pass Resolution No. 158B in opposition to I-695. He opposed I-695 as a "meat-axe approach" to solving the unfairness of MVET.
(2) Jordan Royer, 3922 Woodland Park Avenue N, Seattle, represented the "No on 695 Campaign." He noted that I-695 will reduce State revenues by six to seven percent. He acknowledged I-695 as an understandable response to MVET, which he agreed needs to be reformed. However, he said I-695 could exacerbate the problems of the State’s regressive tax structure by eliminating one of the few progressive State taxes. He urged Council to go on record in opposition to I-695.
(3) Kathy Halliburton, 18315 Wallingford Avenue N, supported Council opposition to I-695. She noted the regressiveness of the flat, $30 license tab fees it proposes and of the budget shortfalls that would result from its passage (e.g., the loss of one third of the funding for Metro bus services to King County residents).
(4) Bob Lohmeyer represented the Shoreline-Lake Forest Park Senior Center. He said MVET is burdensome to many seniors. However, he went on to say that the Senior Center could lose up to 23 percent of its funding as a result of I-695, which would result in a reduction in staffing, service hours and programming. He encouraged Council to oppose I-695.
(5) George Mauer, 1430 NW 191st Street, asserted that opposition to I-695 is ironic given the lack of support for MVET. He said the tax revolt represented by I-695 will not go away until government adopts efficiency and effectiveness as primary standards of performance. He urged Council not to take a position on I-695. He commented that it would be divisive of Council to do so.
(6) Bill Meyer, 358 NW 189th Street, also urged Council not to take a position on I-695. He asserted that MVET revenues are used for many purposes unrelated to the original intent of the tax. He suggested that Council petition the State legislature to overhaul MVET quickly and properly in a way that involves the public.
Councilmember Lee moved to close the public hearing. Councilmember King seconded the motion, which carried unanimously, and the public hearing was closed.
Councilmember Gustafson moved to adopt Resolution No. 158B to oppose Initiative 695. Councilmember Lee seconded the motion.
Councilmember Gustafson asserted that I-695 is a bad bill. He supported the review and revision of MVET, but he opposed the requirement that voters approve all tax and fee increases. He advocated that Council take a position against I-695 and that Council "send a message to Olympia" regarding MVET.
Deputy Mayor Montgomery noted that the speakers who supported Council opposition to I-695 acknowledged that MVET is problematic. She advocated that Council send a message to the State legislature to reform MVET.
Mayor Jepsen said Council can establish this message in the legislative agenda that it will be addressing during the next few weeks and that it will be discussing in subsequent meetings with State senators and representatives.
Councilmember Lee noted the contradiction of Washington voters supporting I-695, which would eliminate the funding for the transportation projects in Referendum 49, which Washington voters passed in the last election. She said it is irresponsible to require a public vote, at a cost of $25,000-95,000 per election, to approve all tax and fee increases.
Mr. Deis said the City can transmit a Council position on I-695 to State legislators with a cover letter clarifying that Council considers MVET problematic. He commented that he could communicate this message through his participation on the Association of Washington Cities Legislative Committee as well.
Councilmember Hansen supported a message to State legislators that they must do something about taxation. He expressed sympathy for that part of I-695 that addresses the problems of MVET. However, he strongly opposed the other part of the initiative, asserting that it will destroy the representative form of government. He recommended that Council take a position against the initiative because of this second part. He noted that he could support I-695 if the second part were eliminated as unconstitutional.
Councilmember Ransom asserted it is unfair to levy the same $30 license tab fee regardless of the value of the vehicle. However, he went on to say that he is more concerned about the part of I-695 that will require voter approval of any tax, rate or fee increase. He said this requirement will create a disastrous situation for districts and municipalities.
Councilmember King expressed opposition to I-695.
Mayor Jepsen opposed I-695 and supported Resolution No. 158B. He said he disagreed with both parts of the initiative. Noting that the State legislature has utilized MVET for a variety of things for which it was not intended, he expressed understanding for voter disapproval of MVET.
A vote was taken on the motion to adopt Resolution No. 158B, opposing Initiative 695, which passed 7-0 (and is identified for the record as Resolution No. 158).
MEETING EXTENSION
At 10:00 p.m., Councilmember Hansen moved to extend the meeting until 10:15 p.m. Councilmember Ransom seconded the motion, which carried unanimously.
11. CONTINUED PUBLIC COMMENT
(a) Dick Nicholson, 15812 11th Avenue NE, reported on neighborhood mini-grant projects that volunteers undertook during the weekend: the Meridian Park Neighborhood Association planted native plants in Cromwell Park; and the Briarcrest Neighborhood Association began construction of an information kiosk.
12. ADJOURNMENT
At 10:04 p.m., Mayor Jepsen declared the meeting adjourned.
_____________________________
Sharon Mattioli, CMC
City Clerk