MEDICAL LAKE — The City Council gave its final approval to the city’s 2019 Comprehensive Plan that will help guide its direction for the next decade at its regular meeting on Tuesday, Oct. 8. It also passed on first reading a 4 percent property tax and 1 percent EMS levy increase after a public hearing.
Neither issue was without long and sometimes contentious discussions among council members.
It was a steep learning curve as the council was educated on nuances of taxing limits of a 1 percent levy cap and the ability to tap into more revenue via a state tax law called “banked levy capacity.”
Property tax revenues for 2019 are $556,401, while an increase of 1 percent will add an additional $5,564 to the city’s estimated $5.1 million budget, according to a explanatory memo to the council from City Administrator Doug Ross.
By state law the city cannot raise taxes more than 1 percent over the total amount collected the year before without a public vote.
Mathematically under the 1 percent cap, property tax rates actually drop as home values appreciate on the open market, Ross explained. But because home values have increased, homeowners will likely still pay more in taxes despite the rate drop simply because their homes are worth more.
But the city also has the legal option of dipping into its “banked levy capacity,” which is past tax rate increases the city has opted not to use since 1985, when the banked capacity law was passed. The available banked rate is currently 8.04 percent.
The city would gain an additional $44,710 if the council elected to raise taxes by the entire 8.04 percent.
The council discussed these issues at length and struggled to decide by how much, if any, to increase taxes. City Attorney Cynthia McMullen reminded them their deliberations and subsequent vote was the first reading of the ordinance, and they could revise up or down the amount of any proposed tax increase at the second and final reading when it occurs.
And on a 4-2 vote the council elected to use raise taxes the full 1 percent plus use 3 percent of the city’s banked capacity for a 4 percent total increase on first reading. Councilmen Don Kennedy and A.J. Burton voting in opposition to the proposed increase.
The council also voted unanimously on first reading to increase the current EMS levy rate an additional 1 percent. Under a pre-annexation agreement with Spokane County Fire District 3, EMS levy monies are now passed from the city to the District.
While the city is no longer providing emergency services after the recent fire and EMS annexation into District 3, it must still pay the “$15,000 – $20,000 short fall” Ross said, between the city’s 50 cent EMS levy and District 3’s $1.50 levy through the end of 2020, after which Medical Lake homeowners will be assessed the full amount by the fire district.
The additional money is coming from the city’s general fund in the interim.
Also on the council’s agenda was final reading and consideration of the city’s recently completed 2019 Comprehensive Plan.
Councilman Ted Olson, a single-term member who is not running for reelection, again expressed his concern regarding language in the planning document related to homelessness.
He cited two items under Chapter 2, Plan Concepts titled “Actions,” which are “budge-able tasks suited for inclusion in annual work programs … each individual initiative here works toward fulfilling the plan’s higher vision.”
One action suggests conducting a study of specific needs of the city’s vulnerable population that includes “teens, seniors, and the homeless population.”
Another suggests identifying “awareness” of those vulnerable populations “including homeless families and school kids and develop programs that provide assistance to them.”
“I can’t emphasis enough that I don’t want taxpayers to be responsible for this at all,” Olsen said.
Mayor Shirley Maike noted that neither item mention by Olsen obligated the city to anything, but were instead recommendations.
“Neither one is committing the city to pay any money for the homeless,” she said.
Olsen noted that he didn’t have “a problem with the homeless, that’s their choice, or not their choice — it’s whatever happens.”
“I just don’t want the burden of financing them to be on the taxpayer,” he said.
Councilwoman Elizabeth Rosenbeck noted that the city could not remove itself from homeless issues, but what the City council voted to do about it was another issue.
“There’s still going to be resources expended if there’s a problem in the City of Medical Lake somehow in some form,” she said, noting that resources didn’t just include money. “I don’t see how we can completely obliterate the homeless issue.”
The motion to approve the comprehensive plan on its second and final reading and make it an official Medical Lake planning document passed on a 4-3 vote, with councilmen Olsen, Kennedy and Burton voting against approval.
Lee Hughes can be reached at [email protected].
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