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Home My WebLink About10/10/2023 05. Proposed revenue sources (including but not limited to Utility Tax Increase, Admission Tax and Impact Fees) 1 .4. !% a, . BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5. For Meeting of: October 10, 2023 ITEM TITLE: Proposed revenue sources (including but not limited to Utility Tax Increase,Admission Tax and Impact Fees) SUBMITTED BY: Bob Harrison, City Manager *Rosylen Oglesby,Assistant City Manager SUMMARY EXPLANATION: In an attempt to balance the budget, additional revenue sources will need to be implemented or further budget reductions must be made. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: ATTACHMENTS: Description Upload Date Type ❑ Impact Fees memo 10/5/2023 Goer Memo ❑ Admission Tax memo 10/6/2023 Cover Memo O Potential utility tax ncreases 10/6/2023 Cover Memo 2 MEMORANDUM To: Bob Harrison, City Manager Rosylen Oglesby, Assistant City Manager Scott Schafer, Public Works Director Joan Davenport, Community Development Director From: Joseph Calhoun, Planning Manager Date: September 7, 2023 Subject: Impact Fees Below is a summary of Impact Fees, which is available in greater detail at MRSC - https://mrsc.org/explore-topics/planning/land-use-administration/impact-fees What Are Impact Fees? Impact fees are one-time charges assessed by a local government against a new development project to help pay for new or expanded public capital facilities that will directly address the increased demand for services created by that development. What Can Impact Fees Be Used For? RCW 82.02.050-.110 and WAC 365-196-850 authorize counties, cities, and towns planning under the Growth Management Act (GMA) to impose impact fees for: • Public streets and roads, • Publicly owned parks, open space, and recreation facilities, • School facilities, and • Fire protection facilities. These impact fees may only be imposed for"system improvements" which are defined as public capital facilities in a local government's capital facilities plan that provides service to the community at large (not private facilities), are reasonably related to the new development, and will benefit the new development (WAC 365-196-850). Impact fee revenues cannot be used to help pay for a specific capital project if that project is not listed or referenced within a comprehensive plan's capital facilities element, per RCW 82.02.050(5). Impact fees also cannot exceed a proportionate share of the cost of the system improvements: Municipalities must have additional funding sources and may not rely solely on impact fees to fund the system improvements (RCW 82.02.050). What Can Impact Fees Not Be Used For? Impact fees may not be used to correct existing deficiencies. For instance, a school district may use the impact fees from a development to pay for construction of new classrooms at specific schools to accommodate the increased enrollment anticipated from that specific development. 3 But the district may not use the impact fees to build new classrooms to reduce overcrowding caused by existing residents. Per RCW 82.02.060(9), an impact fee ordinance may: (P)rovide for the imposition of an impact fee for system improvement costs previously incurred by a county, city, or town to the extent that new growth and development will be served by the previously constructed improvements provided such fee shall not be imposed to make up for any system improvement deficiencies. For example, if a public works maintenance facility was designed and constructed to address both existing deficiencies (e.g., 60%) and future growth needs (e.g., 40%), impact fees could be used to pay for up to 40% of the debt service on the bond issued for that facility. Next Steps The process to establish impact fees will require a significant amount of research and analysis based on what fee(s) are collected. For example: if the decision is made to implement Impact Fees for Transportation and Parks Improvements, then a comprehensive rate analysis/fee schedule will need to be performed to establish the proportionate fees that will be charged for a variety of different development projects. See Attached — Ellensburg Transportation Fee Schedule. Drafting of an Ordinance will follow, which shall outline the purpose, definitions, applicability, fee schedule(s), and various process requirements. The Ordinance should also include sections for: Impact Fee Exemptions, Waivers, or Reductions; Impact Fee Deferrals; Deadlines for expenditure of fees; and Appeals. See Attached — Ellensburg (Transportation) and West Richland (Transportation and Parks) Implementation of the Ordinance will include review of all new development projects in relation to the applicable fees. If Transportation and Parks Impact Fees are adopted, then all new development projects would be assessed per the fee schedule with those fees being collected at the permit stage. The staffing requirement to initiate Transportation and Parks impact fees should include, at a minimum, representatives from: Public Works (Engineering and Parks), Planning, and Finance. It may also be beneficial to hire a consultant to help develop the Fee Schedule. 4 14.. +;,, OFFICE OF THE CITY MANAGER -� � 129 North Second Street ':� Yakima, Washington 98901 ` ' NMI ' Phone(509) 575-6040 In„Y\ 1 \M Memorandum DATE: October 6, 2023 TO: Robert Harrison, City Manager FROM: Rosylen Oglesby, Assistant City Manager/Interim Director of Finance and Budget SUBJECT: Admission Tax Admissions tax is a tax added to the ticket price or other charge that attendees pay to enter an entertainment facility or a charge to participate in an entertainment activity. A donation for admittance is considered an admission charge. Examples include cover charges, admission fees, golf and driving ranges, swimming pools, archery, billiards, shuffleboard, pool table, jukebox, picture machines, amusement rides, automatic baseball, table bowling, and all other ball operating games, electronic games, and darts. Ticket purchase examples include theaters, dance halls, amphitheaters, auditoriums, stadiums, athletic pavilions, fields, sporting events, automobile parking, and the circus (RCW 36.38). Tax Rate The admissions tax rate is 0.05 (5%) and is applied to the full admission charge, including service fees, mailing fee, or other surcharge. Collecting the Tax The attendees pay the tax upon admission. However, the organizer is responsible for charging and collecting the tax. The organizer must pay the collected amount to the City when taxes are filed. The organization is liable for the tax whether or not the tax is collected. The tax on reduced admission charges shall be charged on the reduced charge, not the regular admission charge. Exemption from Admission Tax • Admission to elementary and secondary school activities when held at the school, including athletic events where the students are the athletic participants. • Admission to events when the primary sponsor is located in the City and exempt from taxation pursuant to RCW 82.04.3651 and the principal purpose of the event is a public performance or exhibition of visual or performing arts, historical objects, or scientific works. • Admission to a public celebration sponsored and collected by a city or county. Looking at the amounts of sales for ticketed events in 2021 and 2022 in the City of Yakima, if there were an imposed tax for admission, the City would have generated approximately $88,000 to $93,000, respectively, for those years. Potential Utility Tax Increase Current Potential Potential 2024 Increase In lieu Taxes Department Rate 2024 Utility Tax Department Rate Utility Tax in Departments Water 20% $ 2,502,200 Water 24.5% $ 3,065,195 $ 562,995 Wastewater 20% $ 4,808,825 Wastewater 24.5% $ 5,890,810 $ 1,081,986 Refuse-General Fund 15% $ 1,437,221 Refuse-General Fund 20% $ 1,916,294 $ 479,074 Refuse-Clean City 5% $ 479,074 Refuse-Clean City 5% $ 479,074 $ - Stormwater 15% $ 609,662 Stormwater 15% $ 609,662 $ - $ 9,836,980 Wastewater-Aquatic Funding 0.5% $ 120,221 $ 120,221 Water-Aquatic Funding 0.5% $ 62,555 $ 62,555 Stormwater-Aquatic Funding 1096 $ 406,441 $ 406,441 $ 12,550,251 $ 2,713,271 Potential Increase to: General Fund $ 2,124,054 Capital&Operating Budget for the Aquatic Fund $ 589,217 $ 2,713,271 Distributed at the Meeting j4//G/o?11;c3 f}S Price, Cally From: Schafer, Scott Sent: Tuesday, October 10, 2023 12:58 PM To: Price, Cally Subject: Single-Family Residence Impact - 5% In-Lieu Increase Increases in Utilities for In-Lieu Tax Only Water (5% In-Lieu Increase): Water single family residence with %" water meter and bimonthly consumption of 15ccf Existing Water Utility Bill Existing Bimonthly Ready to Serve (RTS) $26.36 Existing Bimonthly Consumption (15ccf @ $2.18/ccf)) $32.70 Existing Total Bimonthly Bill $59.06 Water Utility Bill With 5% Increase Bimonthly RTS $27.68 Bimonthly Consumption (15ccf @ $2.29/ccf) $34.35 Total Bimonthly Bill With Increase $62.03 Annual impact is$17.88 $2.97 increase. This is based on an average of indoor water use. $1.49 increase on a monthly basis Wastewater (5% In-Lieu Increase): Wastewater single family residence with 3/" water meter and bimonthly consumption of 6ccf Existing WW Utility Bill Existing Bimonthly Ready to Serve (RTS) $49.24 Existing Bimonthly Consumption (6ccf @ $3.59/ccf)) $21.54 Existing Total Bimonthly Bill $70.78 WW Utility Bill With 5% Increase Bimonthly RTS $51.70 Bimonthly Consumption (6ccf @ $3.77/ccf) $22.62 Total Bimonthly Bill With Increase $74.32 Annual impact is $21.24 $3.54 increase in bimonthly wastewater utility bill for single family residence. $1.77 increase on a monthly basis. Stormwater (10% In-Lieu Increase): Stormwater average single family residence Existing Rate is$79.20 per year Rate with 10% increase is$87.12 $7.92 increase in annual stormwater utility bill for a single family residence (assessed with property tax) Refuse (5% In-Lieu Increase): 2024 rate (32-gal cart) = $25.70 Rate with 5% In-lieu Tax = $27.78 Annual impact is$49.92 $4.16 increase in bimonthly Refuse utility bill. $2.08 monthly increase to household Let me know if you need anything else. Scott Schafer Public Works Director City of Yakima (509) 594-8890 2