Since joining the roster at Liberty Lake City Hall last year, Finance Director R.J. Stevenson has been lauded for his comprehensive approach to municipal money matters.
At Tuesday’s City Council meeting, Stevenson was asked to shed light on what has been one of the most debated topics in the city’s history – a tax on electric, gas, cable, phone and electric bills introduced at the close of 2010. The 6-percent toll was intended to address a projected $700,000 deficit in the city’s general fund, but drew criticism from businesses and residents, even leading to a formation of a task force by the Greater Spokane Valley Chamber of Commerce.
Last month, Council Member Susan Schuler expressed concern over recent discussions about municipal expenditures, including talk of moving ahead with development of 6. 4 acres as a future city center. Schuler pointed to the city’s dire financial picture just over a year ago – a scenario that involved reductions at the library and city-owned golf course as well as continued cutbacks at City Hall.
“Now, we seem to have all this money to spend,” Schuler said.
When the utility tax was first discussed in late 2010, then-Mayor Wendy Van Orman and representatives of City Council pitched the idea as a stopgap that would be readdressed at regular junctures, Schuler said. Council did vote at the end of 2011 to reduce the tax in half, to 3 percent.
On Tuesday, Stevenson reviewed the financial history that led to the passage of the utility tax as part of the 2011 budget, beginning with a 24.5-percent decrease in sales tax revenue in 2008 and 2009. Proceeds from building permits also dropped during that time while the city experienced a decline in its ending fund balance for the first time since incorporating in 2001.
Stevenson pointed out that the city did take steps to reduce expenditures in 2010, including cutbacks in capital facilities spending and chip sealing, instead of overlay, on city roads.
“As the 2011 was being proposed, building permitting was still at an all-time low and sales tax revenue was still in decline,” Stevenson said.
As it turned out, 2011 was not as bleak as initially anticipated. Sales tax revenue began to rebound, exceeding expectations by 15 percent. Licensing and permitting brought in close to $157,000. Meanwhile, revenue from the utility tax allowed the city to pay off the debt service on the city-owned golf course, freeing up cash in the general fund.
Looking ahead, Stevenson said sales tax will continue to be “an unstable revenue source,” while some form of utility tax could be utilized to address bonds at City Hall and the 6.4 acres as well as provide funds for the city’s capital improvement plan.
“The utility tax does provide a stable revenue source,” Stevenson said.
At the close of his presentation, Stevenson recommended that the city consider some sort of community meeting, survey or public hearing that would look at the future of the utility tax. A review of the city’s capital facilities plan – and potential funding mechanisms – would also be prudent, Stevenson added.
“This shows us how we got from where we were to where we are today,” said Mayor Pro Tem Odin Langford.
In other council news:
- Interim City Administrator Mike Cecka announced that a total of eight additional applications for full-time city administrator were received on the closing date of Feb. 29, bringing the total number of applications to 42. Cecka said the city has narrowed the list of applicants down to 13 semifinalists. He added that initial interviews should be completed by the middle of next week with a discussion regarding five or six finalists scheduled for an executive session at the March 20 City Council meeting.
- Community Development Director Doug Smith said there has been discussion of including a permanent representative of Liberty Lake at the table of the Spokane Regional Transportation Council.
In light of a series of recent vehicle prowlings, Police Chief Brian Asmus reminded residents to remove valuables from cars, lock vehicle doors and write down serial numbers of belongings in case identification of stolen items is necessary.