Pages

Friday, July 30, 2021

Lake Forest Park City Council approves property tax measure to appear on ballot in November

A graph, presented by LFP Councilmember John Resha, that shows the expected money the proposed additional property tax levy would generate over the next thirty years. The yellow bar represents each year's "excess capacity"; that is, the surplus the levy generates. Initially, there is a growing surplus, but, as the loans for the financed projects are paid off, the excess capacity shrinks, until roughly twenty years in the future, there is no excess. The graph was made originally for a $1.5 million annual levy but the shape and timeframe remain the same for a $2 million annual levy.


By Tracy Furutani

“In the last few years we’ve engaged with our community to talk about what’s important and we’ve used a series of planning exercises to really get clear about what’s most important for how we invest and what our policies say about us and our values. 
"We also made some commitments to the community to make sure we are drawing in all the other revenue sources before we start to ask the question of what else do we need to fund to meet these priorities… I promised I would never go to the voters without knowing that we’re doing it together and being really clear about what we’re trying to invest in,”

said Lake Forest Park Councilmember John Resha, before the LFP City Council last Thursday unanimously approved the placement of Proposition 1, the so-called “levy lid lift,” on the general election ballot in November. 

The proposition would have to get a simple majority of city voters to agree in order to take effect.

By a statewide proposition passed in 2001, a city cannot raise the rate at which it taxes property more than 1% annually (the “lid”) without agreement from city voters.

Since the new levy would increase the tax rate by $0.59 per $1000 of assessed value (the “lift”) over the current rate of about $0.97 per $1000 of assessed value, a vote of the people is necessary, according to a presentation given by City Administrator Phillip Hill. 

These rates are not mentioned in the wording of the proposition because the King County Assessor’s Office adjusts the levy rate to yield the dollar amount requested by the city.

The new money raised from the increased property tax would be placed, according to the proposition, in “a special revenue fund established exclusively for the levy proceeds.” Moreover, this special revenue fund is to be spent specifically on the goals of the Safe Streets for Pedestrians and Bicyclists, and the Parks, Recreation, Open Space and Trails (PROST) projects adopted by the City Council in 2016. 

As Resha pointed out, though some of the fund would likely be spent on hiring new staff to oversee these projects, and for materials and maintenance on the new parks and sidewalks, the bulk of the fund would be spent on repaying the loans needed to finance approximately $20 million in Safe Streets and PROST projects, which the City Council had previously identified. Examples of these projects are the development of the lakefront park. and the building of sidewalks throughout the city, near schools and connecting parks.

One of the public commenters at the meeting wondered why the council’s proposition did not have a limited time over which the additional levy would be collected. 

“That question of permanence versus a shorter duration is a big deal,” acknowledged Resha. “If we were to shorten the duration of the levy and, say, make it for five years, …in order to generate enough money in five years to build a series of projects and maintain them, we would exceed our capacity that is legally available to us… so we would have to dramatically shrink the size of the investment.”

“I’m comfortable with the permanent lift, because I think over time… at fifty years, what will be the real value of $2 million a year? It will be a declining amount,” said Councilmember Lorri Bodi. She also mentioned the accountability built in to the levy spending “I’m sure if a dock is falling down, we’ll hear from the community.”

Councilmember Resha presented a graph that showed how the new fund balance would change over time. (See above). Initially, the fund would grow as projects were being designed and twenty-year loans were used to finance the projects, but as the projects were completed, the debt service payments would grow and use up any surplus the fund collected at the beginning.

“It’s about 2045 or 2046 when a future council will be in a position to make a choice,” said Resha. “They’ll have about $700 to $800 thousand of ongoing operating expenses, due to the staff and [other fixed costs] which will leave them a question: Do we actually reduce the levy at that point… or go back to the community and say ‘are there new priorities that we should be investing in?’”

Councilmember Semra Riddle agreed with the other council members in the permanence of the levy. However, she had some concern about the levy amount. “I’m thinking about this in terms of the changing landscape we see in police reform and [mental health and other social services],” she said. “I’m concerned there’s going to be a need to support that in the future and balancing that with this commitment to this levy, I want to be sure that this community has the ability to meet both needs if it were asked.”

Councilmember Resha asked, “Are we [the council] comfortable at that $20 million capital [investments] plus about $700 thousand per year in operating [expenses], or do we want to see a lower level which will require more prioritization and less flexibility going into the future?”

In the end, Councilmember Riddle offered an amendment to lower the levy lid increase to $1.5 million annually, which was not adopted, and the proposal to put the proposition on the ballot was approved unanimously by the council to raise $2 million annually.

As required by state law, the council also approved the two committees who will write the statements (and the rebuttals to the other side’s statement) for the general election voter’s pamphlet: 

LFP residents Vicki Pettiross, Rachel Chen and Annthea Vining will write the statement in favor, and Bryce James, Don Nibouar and Jeff Snedden will write the statement in opposition.

If the proposition passes in November, what would be the effect on property owners? 

The “average” property in the city is assessed at a valuation of $617,000, according the King County Assessor’s Office, and the increase in the levy rate would result in a $366 increase in the property tax bill, according to Administrator Hill. Similarly, a property assessed at $817,000 would result in a $485 increase. This would be a permanent increase.

What would be the effect on renters? “That is a difficult impact to calculate as you would need to consider the value of the rental property and the number of renters the increase could be shared among,” said Hill. “And while renters may share in the increase, they will also benefit from the improvements to their community.”


7-31-2021 Amended to add full explanation of the graph at the head of the story.



4 comments:

  1. What is interesting is that the council conspicuously avoided mentioning the bill that is coming due with contracts negotiations with the Police guild representing rank and file members. Underpaying members for nearly a decade means the city will have to pay the increases to maintain what it has enjoyed for policing. That won't be cheap and it shouldn't.

    ReplyDelete
  2. Hey city of LFP, how is the $40 per year on our car tabs for "transportation " being used? And what did you do with all the money you collected from the thousands of sketchy speeding tickets when LFP schools reopened in spring 2021?

    ReplyDelete
  3. My taxes are going up pretty dramatically just based on property valuation. The explanation as to why the levy isn't limited to a set period of years amounts to "we want the money to keep coming". Never paid much attention to LFP politics, but I know who I'm voting against now.

    ReplyDelete
  4. I don't live in LFP but I fear driving through beautiful Lake Forest Park due to the privatized predatory automated traffic citation system. They know it is cheaper to just pay the fine than to take time off from work to challenge an injustice.

    ReplyDelete

We encourage the thoughtful sharing of information and ideas. We expect comments to be civil and respectful, with no personal attacks or offensive language. We reserve the right to delete any comment.