Kent City Council approves cable utility tax, higher permit fees | City budget 2013-14

Costs are going up to live and build in Kent after the City Council voted 4-3 on Tuesday night to adopt the 2013-14 biennial budget.

The budget includes a 6 percent tax on cable television bills to raise about $1.3 million per year, higher permit fees for developers to bring in about $1 million per year and a 1 percent increase in the property tax levy to raise about $198,000.

Residents also will see storm drainage rates go up 5 percent, sewer rates up 4 percent and water rates up 3 percent.

“I know you have a tough job to do but I’m in opposition to the tax increases in the 2013-14 budget,” said Doug Basler, of Kent, during the public comment period at the council meeting. “When are the tax increases going to end?”

Basler said the council needs to cut spending and added that the “city is more than parks and roads it’s people and people are having a tough time.”

Kent resident Andy Massagli also testified that the city needs to make more cuts rather than increasing taxes and fees. He focused on the council’s plan to increase the internal utility tax (when the city taxes revenue from its water, sewer and storm drainage funds) to 13 percent from 10 percent to help pay off about $10 million in debt over the next 10 years. The increase also raises $500,000 per year to bring up reserves in the general fund to 10 percent of the previous year’s budget rather than the 4 percent mark now.

“You want to grow your reserves by 10 percent, how about we just cut everything by 10 percent,” Massagli said. “If some of you gasp at the thought of that, then what makes you think I can add that to my bills? Because you just added 6 percent to my cable bill.”

The 6 percent tax on cable television bills will raise money to help pay for information technology staff as well as computer hardware and software.

Council President Dennis Higgins, Deborah Ranniger, Jamie Perry and Bill Boyce voted to adopt the budget of $72 million a year in general operating costs. Elizabeth Albertson, Les Thomas and Dana Ralph voted against it.

The council in October approved a new business and occupation (B&O) tax starting Jan. 1 projected to raise about $5 million per year to help repair city streets.

“In this landmark budget we are establishing better, more realistic revenue projections, are paying down debt, building back reserves, diversifying our tax base and are holding the line on expenses,” Higgins said.

Higgins addressed complaints that the council hasn’t cut expenses enough.

“I happen to agree with that,” Higgins said. “We reviewed (at council workshops) over two dozen ideas for cutting programs and expenditures and we enacted very few of them. It takes four votes and most proposed cuts didn’t meet that threshold. But I am not done looking at efficiencies and re-prioritization of services.”

Boyce said the city had to take action to reduce its debt because Moody’s Investors Services downgraded the city’s bond rating in September for the second time this year.

“Our credit rating has been downgraded twice and to me that’s very serious and that’s something I can’t not react to,” Boyce said.

Boyce said the council also needs to look in 2013 at reducing debt at the city-owned ShoWare Center and Riverbend Golf Complex. The ShoWare Center has lost more than $1.3 million in its first three years. Riverbend lost $430,000 in 2011 and is projected to lose about $97,000 this year.

“ShoWare is a problem that we need to deal with,” Boyce said. “It’s not paying for itself and we need to find a way to make it work. I understand it brings in about $25 million to Kent Station but we take money out of the general fund to offset (losses). And we need to find a way for the golf course to pay for itself and not take money out of the general fund.”

The budget includes $500,000 in 2013 to help cover the revenue losses at the ShoWare Center.

Ralph opposed so many tax and fee increases and wanted to look at additional cuts to programs.

“This is very ambitious increases on a lot of levels and it will have an impact in our community,” Ralph said. “I feel like we don’t have the other side of this which is some of those program cuts. We haven’t had the conversation about are the services we provide all essential or are there ones the city cannot support anymore. It doesn’t feel balanced to me.”

Albertson wanted more steps taken to reduce the city’s debt problems.

“This is another budget that is unrealistic and doesn’t meet the needs of the folks who live here,” Albertson said. “Yes, a couple of tweaks have been made, but we’re not addressing the hemorrhaging of our giant debt. I cannot support another year of this piecemeal approach.”

Perry added that she agreed with much of what Albertson said. In fact, when the council took a roll call vote on the budget, Perry answered “Yes, with an asterisk.”