CITY COUNCIL AGENDA ("reek 15728 Main Street, Mill Creek, WA 98012 (425) 745-1891 Mike Todd, Mayor • Kathy Nielsen, Mayor Pro Tern • Donna Michelson • Bart Masterson Mark Harmsworth • Mark Bond Regular meetings of the Mill Creek City Council shall be held on the first, second and fourth Tuesdays of each month commencing at 6:00 p.m. in the Mill Creek Council Chambers located at 15728 Main Street, Mill Creek, Washington. Your participation and interest in these meetings are encouraged and very much appreciated. We are trying to make our public meetings accessible to all members of the public. If you require special accommodations, please call the City Clerk at (425) 921-5732 three days prior to the meeting. The City Council may consider and act on any matter called to its attention at such meetings, whether or not specified on the agenda for said meeting. Participation by members of the audience will be allowed as set forth on the meeting agenda or as determined by the Mayor or the City Council. To comment on subjects listed on or not on the agenda, ask to be recognized during the Audience Communication portion of the agenda. Please stand at the podium and state your name and address for the official record. Please limit your comments to the specific item under discussion. Time limitations shall be at the discretion of the Mayor or City Council. Study sessions of the Mill Creek City Council may be held as part of any regular or special meeting. Study sessions are informal, and are typically used by the City Council to receive reports and presentations, review and evaluate complex matters, and/or engage in preliminary analysis of City issues or City Council business. Times listed on the agenda are approximate only. Discussions may sometimes cause remaining agenda items to be considered before or after their scheduled time. Citizens are welcome and encouraged to attend all sessions (except for Executive Sessions) of the meeting. • Next Ordinance No. 2012-748 Next Resolution No. 2012-494 November 13, 2012 City Council Meeting 5:00 p.m. 5:00 p.m. CALL TO ORDER: 5:01 p.m. FLAG SALUTE: 5:02 p.m. ROLL CALL: 5:03 p.m. AUDIENCE COMMUNICATION: Public comment on items on or not on the agenda 5:10 p.m. PUBLIC HEARING: A. 2013 Property Tax Levies (Landy Manuel, Finance Director) 5:45 p.m. STUDY SESSION: A. Fire Contract No. 7 Contract Amendment (Tom Gathmann, Acting City Manager) (Estimated Length of Discussion: 5:45p.m. to 6:00p.m.) B. Council Candidate Interview with Sean Kelly (City Council) (Estimated Length of Discussion: 6:00p.m. to 6:15p.m.) Page 1 of 2 5:45 p.m. STUDY SESSION: C. Council Candidate Interview with Joe Malin (City Council) (Estimated Length of Discussion: 6:15 p.m. to 6:30 p.m.) D. Council Candidate Interview with Jason Wingert (City Council) (Estimated Length of Discussion: 6:30 p.m. to 6:45 p.m.) E. Council Candidate Interview with Chuck Wright (City Council) (Estimated Length of Discussion: 6:45 p.m. to 7:00 p.m.) F. Council Candidate Interview with Bill Senate (City Council) (Estimated Length of Discussion: 7:00 p.m. to 7:15 p.m.) G. Council Candidate Interview with Richard Austin (City Council) (Estimated Length of Discussion: 7:15 p.m. to 7:30 p.m.) H. Council Candidate Interview with Lynn Sordel (City Council) (Estimated Length of Discussion: 7:30 p.m. to 7:45 p.m.) 8:00 p.m. BUSINESS SESSION: A. Accept Nominations, Vote and Appoint a Candidate to the City Council, Position #1 (City Council) 8:15 p.m. CONSENT AGENDA: A. Approval of Checks #49131 through #49228 in the Amount of $273,571.26. 1 (Audit Committee: Councilmember Bond and Mayor Pro Tern Nielsen) B. Payroll and Benefit ACH Payments in theAmount of$221,678.42. (Audit Committee: Councilmember Bond andMayor Pro Tern Nielsen) C. Special City Council Meeting Minutes of October16, 2012 D. RegularCity Council Meeting Minutes ofOctober 23, 2012 E. Special City Council Meeting Minutes of November 1,2012 8:20 p.m. REPORTS: Councilmembers Boards and Commissions 1. Parks and Recreation Board -10/3/12 2. Parks and Recreation Board - 9/5/12 City Attorney Staff Reports Acting City Manager Finance Director Community Development Director Acting Public Works Director Police Chief 8:35 p.m. AUDIENCE COMMUNICATION: Public comment on items on or not on the agenda 8:40 p.m. ADJOURNMENT ^% Page 2 of 2 Mill Creek City Council AGENDA SUMMARY Date on Council Agenda: November 13. 2012 Subject: PUBLIC HEARING ON PROPERTY TAX LEVIES FOR 2013 AND REVENUES Budget Impact: Establishes property tax revenues for 2013 Contact Person/Department: Landy Manuel Finance Director SUMMARY: Assessed Value (AV): The City's AV declined again in 2012 by slightly more than 2% to $2,329 billion. New construction for the second year in a row was under $10 million a level that was last seen in 1995. These items negatively impact the City's revenue growth. New construction brings new property tax revenue, and a declining AV reduces the EMS levy as it cannot exceed its voter approved rate ceiling of $0.45. Regular Property Tax: For 2013 the City Council can, by simple majority vote, levy taxes up to the highest lawful levy amount plus 1% (the inflation factor was greater than 1% and we are limited to the lesser of that or 1%) plus new construction (see Attachment A). This calculation results in a maximum regular levy of $5,743,957. This compares to an actual levy amount for 2012 of $5,294,413. The City has "banked capacity" of $371,035 (the pink area) which may be tapped by the City without a finding of substantial need. For illustrative purposes Attachment A shows levy amounts for various percent increases. Attachment B (0% increase) is calculated with no increase in the amount of property taxes levied plus new construction. This results in a regular levy of $5,316,268 for 2013. The resulting levy rate is $2,254 due to the drop in assessed value (AV) ofthe City. Attachment C details a 1% tax increase, a total of $5,369,212 for 2013. This increase would result in $31,089 more tax revenue compared to 0%. This seems like a small amount relative to a $10 million annual budget but consistently applied over several years the cumulative effect has a positive impact on keeping up with rising costs. Attachment D is calculated to make up in the regularlevy the reduced revenue in the EMS levy caused by the declining AV and $0.45 rate limit. By lookingback to 2011 when the EMS levy was initially authorized and increasing both levies at 1% per year the total combined levy for 2013 would be $6.5 million (disregarding the EMS rate limit). Backing into this figure with the EMS levy fixed at $0.45 results in a regular levy percent increase of 2.5%. The total regular levy would then be $5,448,628 and result in using $110,505 ofbanked capacity. This method is assumed in the proposed budget. The 2014 budget assumes a two percent increase in AV and $15 million ofnew construction value. H:\Budget\2013-2014\PropertyTax and Revenues Public Hearing.doc Agenda Summary November 13,2012 Page 2 Emergency Medical Services Levy: *> The EMS levy cannot exceed $0.45 per thousand dollars ofAV. The lower AV for 2013 at the maximum rate results in a levy of $1,061,001 about$23,000 less than in 2012. Average Residence Impact: The impact to an average residence depends on both the change in the total tax levied and the change in assessed value. Overall the City's AV declined by 2% so I am assuming the value of an average residence fell by a similar amount. Attachment E shows the relationship between AV andthe total tax levied forvarious percent increases upon an average residential value. Each 1% increase in the regular levywith the EMS maxed outresults in a $7per year tax increase. The2.5% regular levy increase toprovide a one percent regular levy increase and make up the EMS reduction results inan $18 tax increase for 2013. The actual increase/decrease would of course be dependent upon the change inAV for each individual property. The staff recommendation is for a 2.5%regular levy increase in recognition of risingoperating costs and as recommended bythe strategic plan. Draft ordinances are attached andmust be received by the Assessor's Office on or before November 30 . Other Revenues: Sales Tax: (Attachment F) 2011 and 2012 sales tax revenue isright on target with budget at$3.8 million. As the datashows, the construction andretail categories have suffered the most from the housing bubble burst and the resulting recession. Since construction isso cyclical a base without it is estimated and then increased by the rate of growth expected by the Economic and Revenue Forecast Council for the state. Anticipated sales tax on construction projects within the City over the next biennium is then added. This methodology results in an estimate of $4,029,262 million overthebiennium. Wehave pulled thatbackandbudgeted $4 million forthe biennium a 5.2% increase for two years or about 2.6% annually, this is about halfthe rate estimated by the State forecast. Public Safety Sales Tax: Overwhelmingly passed bythe voters at last week's election the budgeted revenue forthe biennium is $257,191. This is a structural fix thatkeeps revenues growing more in line with costs. An ordinance will bebrought to Council for final imposition of the sales taxthat will go into effect on April 1st.