HomeMy WebLinkAboutR-2006-137 Submittal of Increase in Private Utility Tax Rate as a Ballot MeasureRESOLUTION NO. R-2006-137
A RESOLUTION providing for the submittal to the electors of the City of
Yakima, Washington, in conjunction with the State General
Election of November 7, 2006, of a municipal proposition to
increase the City of Yakima's private utility tax rate on
electric, telephone, gas and steam utilities by one and one-
half percent (1.5%), from six percent (6%) to seven and one-
half percent (7.5%) to help provide additional funds to hire
additional police, increase prosecution, court, jail and other
related services to enhance community safety.
WHEREAS, recent statistics report that the City of Yakima has the
highest crime rate, per capita, in the State of Washington, largely due to property
crimes perpetuated by drug addiction, gang activity and poverty, which impact
the public perception of the City and stifle economic growth; and,
WHEREAS, growth in population, combined with the City's high crime
rate, has resulted in a greater demand on law enforcement and criminal justice
resources; and,
WHEREAS, Yakima County and the cities within the county have lost
more than $8,986,411 annually in funding as a result of the legislature's
elimination of the motor vehicle excise tax, which subsidized both law and justice
budgets for the City of Yakima; and,
WHEREAS, the City of Yakima is committed to revitalizing the downtown
area by decreasing crime and improving the City's appearance in order to attract
new businesses, enhance existing businesses, and to improve the quality of life
for citizens who live, work and recreate in the area; and,
WHEREAS, the Yakima City Council has approved the Safe Community
Action Plan which, if fully funded, will enhance law enforcement and criminal
justice by funding an additional twenty-two new police officers, one new
prosecuting attorney, three new court clerks, additional jail expenses, and
modest increases in support staff for the police department, municipal court,
prosecuting attorney's office, information systems, and police dispatch, at the
total cost of $3.35 million; and,
WHEREAS, it is proposed that the Safe Community Action Plan be
funded by existing City resources approximately as follows: decrease in the
existing tax exemption for large utility users ($560,000), use of the new library
annexation revenues ($650,000), new fines and forfeitures ($280,000), and
future annexation revenues ($260,000), and the newly proposed increase of one
and one-half percent (1.5%) in the City's private utility tax rate, expected to
generate $1.6 million in funding, for a total of $3.35 million dollars; and,
WHEREAS, Yakima Municipal Code section 5.50.050 currently
authorizes a tax of six percent (6.0 %) on electric, telephone, gas and steam
utilities; the Revised Code of Washington section 35.21870, subsection (1)
authorizes a higher tax on these utilities upon approval by the majority of the
voters of the City; and,
WHEREAS, by approval of this resolution, the City Council authorizes the
City of Yakima to place on the ballot a measure that would authorize a utility tax
increase from six percent (6.0%) to seven and one half percent (7.5%) on
electric, telephone, gas and steam utilities, to be collected within the City of
Yakima for law enforcement and criminal justice purposes; and,
WHEREAS, by adopting this Resolution, the Yakima City Council
commits to dedicating one hundred percent (100%) of the funding generated by
the increased utility tax rate to enhance community safety, as described in the
Safe Community Action Plan adopted by motion of the City Council on July 18,
2006, during a regular business meeting; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
Section 1. The City Council approves that this proposed one and one-
half percent (1.5%) increase in utility tax be submitted to the electors of the City
of Yakima, Washington, in conjunction with the State General Election,
November 7, 2006.
Section 2. The Yakima County Auditor is hereby requested to place a
proposition on the November 7, 2006, ballot in substantially the following form:
PROPOSITION NO. 1
CITY OF YAKIMA
INCREASE IN PRIVATE UTILITY TAX RATE TO PROVIDE ADDITIONAL
FUNDS TO ENHANCE COMMUNITY SAFETY
This ballot proposition, if approved, will authorize an increase of the City's
existing tax rate on electric, telephone, gas and steam utilities by one and one-
half percent (1.5%), from six percent (6.0%) to seven and one-half percent
(7.5%), effective January 1, 2007. All revenue generated by the increased rate
will help fund additional police officers and increased prosecution, court, jail and
other related services in order to enhance community safety as provided in the
Yakima City Council Safe Community Action Plan. Should this proposition be:
❑ Approved
❑ Rejected
Section 3. The City Manager of the City of Yakima is hereby directed to
provide a copy of this resolution to the Yakima County Auditor for submission to
the electors of the City of Yakima in conjunction with the State General Election,
November 7, 2006.
ADOPTED BY THE CITY COUNCIL this 19th day of September, 2006.
David dier, Mayor
ITEM TITLE:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. /5
For Meeting Of 09-19-06
Consideration of Legislation regarding Yakima's Safe Community Action Plan:
A. Resolution providing for the submittal to the electors of the City of
Yakima, Washington, in conjunction with the State General Election of
November 7, 2006, of a municipal proposition to increase the City of
Yakima's private utility tax rate on electric, telephone, gas and steam
utilities by one and one-half percent (1.5%), from six percent (6%) to
seven and one-half percent (7.5%) to help provide additional funds to
hire additional police, increase prosecution, court, jail and other related
services to enhance community safety.
B. Resolution setting a date of Public Hearing for October 3, 2006 to
consider "for" and "against" testimony regarding the ballot proposition.
SUBMITTED BY: Dick Zais, City Manager
Dave Zabell, Assistant City Manager
Ray Paolelia, City Attorney
Sam Granato, Police Chief
Rita DeBord, Finance Director
CONTACT PERSON/TELEPHONE: Randy Beehler, Community Relations Manager,
#575-6092
Sam Granato, Police Chief, #575-6178
Rita DeBord, Finance Director; #575-6053
SUMMARY EXPLANATION: Community Safety is the Yakima City Council's Number One
priority. The City Council recognizes the critical Zink between community safety, quality of life, and
economic prosperity. The Yakima City Council and executive staff are committed to the
revitalization and economic development of Yakima and recognize that decreasing crime and
improving the City's appearance are critical in order to attract new businesses, enhance existing
businesses, and to improve the quality of life for those who live, work, and play in our City.
Continued on next page...
Resolution X Ordinance Other (Specify)
Contract
Mail to (name and address):
Phone:
Funding Source
APPROVED FOR SUBMITTAL: �,z , ,� City Manager
STAFF RECOMMENDATION: This is a Council policy decision
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Resolution adopted. RESOLUTION NO. R-2006-137
Resolution adopted. RESOLUTION NO. R-2006-138
Recent statistics indicate that the City of Yakima has the highest crime rate, per capita, in
Washington State. Additionally, the National Insurance Crime Bureau included the City of Yakima
among the top ten cities for car thefts per capita in the United States in 2005. Property crimes, the
primary cause of our community's high crime rates, are bred by drug addiction, gang activity, and
poverty, all serious problems in Yakima. Recent reductions in available resources have further
compounded our ability to fight crime. Yakima County and cities in the County have lost more than
$8,900,000 annually in funding for local police, court, jail, and related law enforcement services as a
result of the elimination of the motor vehicle excise tax in 2001.
Population growth and high crime rates have resulted in greater demands on our police officers,
prosecuting attorneys, municipal courts, jails, and indigent defense services. Faced with rising
crime rates and increased pressures on our criminal justice system, the City Council has decided
to take action now to make Yakima a safer community. The City Council and staff spent several
months researching and evaluating the most effective methods to reduce crime rates and make
Yakima a safer community. The research dearly indicated that adding as many as 22 new
officers to the Yakima Police Department would be a key element of any crime reduction package.
Additional officers will allow the City to expand the successful "Emphasis Patrol" program piloted
in 2005, which focused on high -crime "hot spots"; creating a `proactive" police force that will be
better able to prevent crimes, not just react to them; target repeat offenders; and, keep more
criminals in jail.
The City Council and staff reviewed numerous options regarding how, and to what level, to
increase the City's police force, how to provide them the tools and support services they would
require to become highly effective, and how to address the additional pressures that would be
placed on the City's municipal court, jail, and related services as a result of the efforts of
additional police officers. In July 2006, the City Council approved the Safe Community Action
Plan, which, when fully implemented, will provide additional police officers, an additional
prosecuting attorney, three new court clerks, additional jail expenses, and other related support
staff, tools, and equipment throughout the City's criminal justice system.
The Safe Community Action Plan is estimated to cost approximately $3.35 million dollars annually
(in today's dollars), when fully implemented. The City Council proposes to fund the Safe
Community Action Plan using a combination of existing, new, and anticipated future City
resources, as noted below:
1. $1.6 million - The proposed increase of one and one-half percent (1.5%) in the City's
utility tax rate on private utilities, if approved by voters. The private utilities
covered under this tax include electric, gas, telephone, and steam. (Note:
currently there are no steam utilities operating within the City of Yakima,
however, steam is included in this resolution as steam is specifically
included in the private utility tax authorization in both the City's municipal
code and the Washington State code (RCW).)
2. $560,000 - A decrease in the existing tax exemption for Targe utility consumers;
3. $650,000 - Use of new library annexation revenues; (last spring, voters approved the
annexation of the Library, this resulted in a reduction in property tax
revenues to the City and a reduction in the City's expenditures — as the City
will no longer provide funding to the library. Since the reduction in
expenditures is expected to be greater than the revenue reduction, the net
savings will be utilized to help fund the enhancements to the criminal justice
system.)
4. $ 280,000 New fines and forfeitures anticipated to be generated by the work of the
additional police officers to be hired under the plan; and
5. $ 260,000 Anticipated future annexation revenues;
® Utility Tax Rate increase requires voter approval: RCW 35.21870, authorizes the City
Council to impose a tax rate on private utilities of up to 6%; to impose a higher rate
requires a simple majority approval vote of the people. Therefore, Council's proposal
to increase the utility tax rate on private utilities must be affirmed by a vote of the
citizens of Yakima.
It is estimated that this rate increase will cost the typical household approximately
$3.60 per month (a typical household is defined as one that spends approximately $80
p/month on gas and electric utilities and approximately $60 per month on telephone).
® Tax exemption for Targe consumers: the City's current utility tax rate is 6% on the first
$4,000 billed (per account, per month) and 2% on all amounts over $4,000. To help
fund the crime reduction package, it is proposed that this exemption be reduced.
The proposal is for a 7.5% utility tax rate on the first $4,000 p/month, p/account (as
noted above); and dropping to 6% on all charges above $4,000. The exemption is at
the discretion of the City Council and does not require a vote of the citizens.
Summary:
After many months of analysis, review, and discussion, the Yakima City Council adopted the Safe
Community Action Plan and proposed the funding sources as approximated above. The enclosed
Resolution, if adopted by Council, will place the proposed increase in the private utility tax rate
(from 6% to 7.5%) on the November 7, 2006 general election ballot, and, if approved by voters,
would become effective January 1, 2007.
If approved by voters, the additional revenues generated from the increased rate will fund
approximately $1.6 million dollars of the total estimated annual $3.35 million cost of the Safe
Community Action Plan. Of the five sources identified to fund this crime reduction package, the
proposed utility tax rate increase is the only one requiring voter approval.
The goals of the Safe Community Action Plan include lowering Yakima's overall crime rate by
20%, providing "community -oriented policing" to help neighborhoods prevent crime, and restoring
community pride and respect for our police officers, municipal court, and the entire criminal justice
system. The ultimate goal of the Yakima City Council, through the Safe Community Action Plan,
is to make Yakima a safer place to live, work, and play.
GBEATER YAKIMA
CHAMBER of COMMERCE
September 13, 2006
Mr. Dick Zais
City Manager
City of Yakimal29 North Second Street
Yakima, Washington 98901
Dear Mr. Zais:
Post Office Box 1490 • www.yakima.org
10 North Ninth Street, Yakima, WA 98907
TEL. 509/248.2021 • FAX- 509/248.0601
E MAIL. chamber@vakima.org
As you are aware, the Citizens for Safe Yakima Valley Communities have endorsed the
city's "Yakima Safe Community Action Plan" ballot measure scheduled for a public vote
in November.
The Greater Yakima Chamber of Commerce has also "tentatively" agreed to support this
measure based on the principle that expanded law enforcement resources are key to
solving our safety issues in this city. However, in the process of reviewing the city's
proposal many questions came to light that we feel might have a bearing on our prospects
for gaining voter approval. Given the mood of our voters we believe absolute clarity is
essential to success.
I have spoken with Rita DeBord, City Finance Director, and Rita has been most helpful
in answering many of our questions. However, with this letter 1 am asking you to reply
with statements that we can use to inform our business further about the issues that
concern them the most. Here is a sample to the questions that are coining our way:
1. We understand that the utility tax increases are for electricity, gas, and all types of
telecommunications service, except for cable. Is that correct, and if so, what are
the reasons for not increasing the other utilities such as water, sewer and garbage?
In your handout featuring the Council Alternative Package — you state "22
uniformed police, 100% jail, 50% other of original SCAP. Do you mean in the
alternative package you have kept 100% of the proposed funding for police, 100%
for the jail and 50% for the other services. This is very confusing, and I would
recommend that you either take it out, or explain further what you mean.
3. Regarding the co -funding source of $560,000 achieved by decreasing tax
exemption for large utility users. This might play well in convincing citizens of
the virtues of using this funding source to subsidize their costs by putting it on the
backs of "big" business, but it will surely create controversy among the business
community. My understanding of this measure is that — for businesses paying 0 to
$4,000 a month in utility charges, the increase will be from 6% to 7.5%, a very
FOR COUNCIL INFO ONLY
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DATE '" 06
manageable 1.5% increase. However. for business accruing $4.001 or over in
monthly utility charges. the lid lift will increase the percentage they are paying
from 2% to 6%, a not so manageable cost of business increase of 4%. This needs
further explanation if we are to gain the support of our major employers.
4. An increase in revenues to increase force size and human resources now has
downstream ramifications in terms of inflation, wage increases and unforeseen
expenses to maintain levels of service. What provisions are in place, or are being
planned, to manage the bow wave effect of increasing payrolls and overhead?
5. The proposal to the voters is that future annexation will provide around $250,000
to help subsidize the costs. Isn't this like using a credit card to get what we want
now, hoping we can pay later? Won't future annexations add to our law
enforcement costs as they come on line. thereby nullifying the reliability of this
source of funding to cover on-going expenses?
5. As we go forward with the work of the Citizen's group. we are uncovering many
needs for increased resources to deal with juvenal crime prevention. We
understand that the juvenal criminal justice system is primarily a county
operation. however, it has been pointed out that the city could play an important
role in prevention given the funding to do so. Are there no provisions in the
budget to cover contingencies for new services for youth that could be funded
both privately and subsidized by the city?
6. The Chamber is providing the staffing, office operations, and communications
networks for the Citizens for Safe Yakima Valley Communities at our own
expense. We have already devoted over 100 hours of our time attending meetings
and other related functions, not to mention the conducting the Citizens Open
Forum. Is there no room in the budget for a dedicated staff person from the city
that could serve this citizen's group as a dedicated go -to staff person?
Soon. the Chamber and Citizen's group will be called upon to promote passage of this
ballot measure which means, we will have to defend the proposal against critics who will
raise these issues and many others. Our goal here is to be prepared to do so accurately
and assist the effort to achieve a win. Your timely response will greatly aid us in this
effort.
Sincerely,
Michael P. Morrisette
President & CEO
Cc: Sam Granato. Chief of Police
David Edler. Mayor