December 18, 2014
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Council gets early jump on budget, utility tax discussion
7/17/2013 3:15:17 PM

By Craig Howard
Splash Contributor

With apologies to Perry Como and Bing Crosby, it's beginning to look a lot like Christmas – or at least Thanksgiving – at Liberty Lake City Hall.

While holiday ornaments and other signs of the season may remain stowed away in cardboard boxes for at least a few more months, the Liberty Lake City Council is beginning to address issues that generally emerge when a layer of frost adorns the practice green at nearby Trailhead golf course. 

At Tuesday night's council meeting, Finance Director R.J. Stevenson provided a backdrop for the first public hearing related to the 2014 municipal budget – a hearing that drew no public response when Mayor Steve Peterson opened the floor to citizen feedback. Prior to Stevenson's presentation, Council Member Lori Olander presided over a workshop discussion on the city's utility tax, a topic that will likely receive its share of attention before the final budget is approved.

Olander opened her presentation by acknowledging the workshop would be an introduction to a more detailed conversation that will take place at the council retreat, scheduled for Aug. 11. She did emphasize that the governing board should consider the history of the utility tax going back to when it was first introduced and passed as part of the 2010 budget.

"As a citizen, my recollection is that it was temporary when it was put into place," Olander said. "The promise was that it would be repealed once city finances were more stable."

The 6 percent toll on phone, electric, gas, cable and waste management was installed at the beginning of 2010 but lowered to 3 percent for 2012. The city expects to generate $662,000 this year from the tax. The funds have been set aside solely for street preservation in the 2013 budget, an idea originally proposed by Mayor Steve Peterson.

"I think government will always find ways to spend money," Olander said. "The question I'd like us to ask ourselves is, ‘Do we need this utility tax moving forward?'"

Olander conceded that she and her fellow council members have "spent money on great things" like road upgrades and the Liberty Lake Ball Fields but reiterated that "we still need to talk about the possibility of reducing the utility tax." 

Referring to the city of Spokane Valley's 6 percent phone tax (with resulting revenue going to a dedicated road fund), Olander said the city would need to cut its utility tax in half to be comparable. Previous debates – which have included input from a utility task force assembled by the Greater Spokane Valley Chamber of Commerce as well as Liberty Lake-based companies – have included the recommendation of an approach that would lower the rate on gas and electric charges to lessen the burden on local businesses. 

"My goal is not to say ‘This is how it has to be,'" Olander said. "I'm not an expert. I just think we need to have the discussion."

Council Members Josh Beckett and Cris Kaminskas spoke out in favor of Olander's pitch on Tuesday night with both saying they would like the tax to be eliminated completely. 

"We need to generate revenue – I'm not disputing that this is a very real and valid concern," Beckett said. "But we told the citizens that the utility tax was going to be temporary. I'd like it to be gone. Economic conditions have improved. City revenues have increased." 

Stevenson shed some light on a scenario that would include a budget without the tax in his mid-year report on city finances. If all remained the same on the expenditure side, the city would be facing a deficit of $401,364 in 2014 without the utility tax in place. The shortfall would increase to $549,134 the following year and $768,668 by 2018. 

With revenue from sales tax and permits eclipsing projections for this year, Stevenson said the city is looking at a surplus of $488,310 by the end of 2013. Car and RV sales have been the drivers on the sales tax side, while other sources of revenue like wholesale trade and the municipal golf course – where income is exceeding expenditures by $70,000 – have contributed to the windfall. 

Looking ahead at the five-year financial forecast, Stevenson described the budget picture as "very sustainable." 

The mayor opened the public hearing on the budget by noting that "it is imperative that citizens give us their priorities on the budget." He added that as the city grows, the city has a responsibility to provide municipal services that range from law enforcement to the maintenance of roads and greenspace.

"It's imperative that we maintain the place that people were looking for when they first moved to Liberty Lake," Peterson said.

There will be two additional public hearings on the budget in November. 

In other city news:

• Council heard a report from Rich Goates, assistant general counsel for Vivint Inc., who said the company's first 30 hires are now in place. Goates said Vivint is anticipating bringing on between a total of 400-600 employees over the next 16-18 months with 98 percent of those jobs being in telesales. Goates, one of three Vivint administrators to relocate to Liberty Lake, added that the renovation of the former Safeco Insurance building is still under way, and the first shift for the initial workforce will run from 1 to 8 p.m. 

• City Administrator Katy Allen said a salary commission will be evaluating the pay structure for mayor and council positions with a recommendation to be filed in time for consideration in the 2014 budget. Pay for both mayor and council has not changed since Liberty Lake was incorporated in 2001.

• Allen confirmed the city was left out of the state grant awards for the town square project on 6.4 acres near the site of the Liberty Lake Farmers Market. A total of $86 million was awarded from a list that included $163 million in requests. Allen added that the city has received 95 citizen comments on the project with 78 supporting the idea. 

• Citing issues with utilities and right-of-way, Allen said the city has rescinded its grant application that would have extended Knox Avenue to address some of the traffic backup that is taking place on Appleway. Allen said the city is still pursuing a grant request to the state Transportation Improvement Board that would help with safety and channelization improvements on Appleway.

• Equipment for the Fallen Heroes Circuit Course in Rocky Hill Park is expected to arrive in late August and be installed shortly after, Allen said. The outdoor exercise facility will honor local veterans and be part of the terrain at several sites, including Pavillion Park. In response to a citizen concern about a basketball court being replaced at Pavillion Park to make way for the feature, Allen said logistics of the placement are still in the preliminary phase. 

• Council unanimously approved a road maintenance project for Mission Avenue and Valleyway Avenue to Poe Asphalt Paving Co. in the amount of $735,280.51.

• Also earning a unanimous vote was a contract to Burnside Contracting Inc. for construction of the Sprague Avenue Trail at a cost of $235,144.08. 

• Citing a light agenda and the council retreat slated for Aug. 11, the governing board voted to cancel the regular meeting scheduled for Aug. 6. 

This story was sent out as an e-update as soon as it was posted. To sign up to receive notice of timely news and information by email, click here.



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