Normandy Park must pass 2012 "Levy Lid Lift" on property taxes to survive, City Manager Doug Schulze warns at a recent meeting at Village Hall.
Normandy Park must pass 2012 "Levy Lid Lift" on property taxes to survive, City Manager warns
Normandy Park City Manager, Doug Schulze, warned that the Levy Lid Lift, a property tax increase, must pass in the upcoming election to head off deficits or the city may go out of business within a few years. The third and final meeting on this levy was held at City Hall Sept. 26. There are nearly 6,400 Normandy Park residents, 2,400 residential units, and only 28 area residents attended.
Schultze gave a PowerPoint presentation to help explain why the city now finds itself in a financial hole. He stressed the numerous cost-saving measures the city has adopted to minimize the crisis.
You can find many of the nuts and bolts of the levy, and costs involved, on the city's website, www.normandyparkwa.gov.'
That website states that "each year that costs were greater than revenues, the city had to dip into its reserve fund. The reserve fund is currently operating below recommended levels and is projected to be gone in three years."
Also, "Property taxes are helping with the deficit, but a State initiative limits property tax increases to one percent annually. This prevents property taxes from keeping up with inflation. Since 2002, inflation has gone up by 26 percent while taxes have only gone up by 8 percent."
It points out that only nine cents per dollar you pay in (property) taxes goes to the City. You pay about $1.31 for every $1,000 of assessed property value. (Des Moines and Burien residents pay $1.60.) A property assessed at $500,000 costs $6,965, and only $655 goes to the City.
The levy would raise $330,000 annually over next four or five years. Other efforts include attracting more retail businesses to Normandy Park Center. It's owner, Tully's Coffee founder Tom O'Keefe, is working hard to get a large supermarket anchored there, Schulze said. Also, festivals are being considered at the Center.
Each resident will soon receive the new City Scene Magazine, a printed copy of the city news letter and a list of local businesses and advertising at no cost to taxpayers. There are about 100 "brick and mortar" business located in Normandy Park, and another 100 with addresses anchoring their business to the city.
How much more will this new levy cost property owners? About 29 cents more for every $1,000 of assessed property value. On a $500,000 property, that would mean $12.19 per month, or $146.23 per year more. That entire amount would go to the City.
To clarify, on a $500,000 assessed property, your annual property taxes would increase from $6,965 to $7,111.23. Again, the City would receive the entire increase.
So what happened?
"Initiative 695 in 1999 took away about $600,000 annually out of the City's budget," recalled Schulze. "That was the $15 license initiative, the car tabs, and 695 eliminated sales tax equalization aid for cities. Normandy Park was a city that benefited because it is a residential community and doesn't generate a lot of sales tax in its jurisdiction. When it was around, the cities that generated a lot of sales tax contributed to the state pot...
"Along comes initiative 747 that says, 'now you can't take three percent, only one percent' (for an annual property tax increase.) Cities like Normandy Park end up with a real structural problem because it's not sustainable. Our primary revenue source is property tax. Our rate of inflation has gone up four to five percent some years."
City staff has been reduced one-third to 11. Other cost-cutting measures have included contracting with Burien for building inspections, Des Moines for Municipal Court, and Senior Services via their Senior Activity Center, police dispatch with Fife, and Normandy Park's parks maintenance is primarily handled through a private landscaper.
Also, Normandy Park Police is part of the Coalition of Small Police Agencies, CSPA, that entered into an Interlocal Agreement in 2003. The participating cities are now Algona, Black Diamond, Carnation, Clyde Hill, Duvall, Enumclaw, Hunts Point, Issaquah, Lake Forrest Park, Medina, Mercer Island, Normandy Park, Pacific, Snoqualmie and Yarrow Point. The state legislature has provided grant money for the coalition. Coalition members receive special group training, investigate major crimes and tactical operations.
If the 2012 Levy Lid Lift fails, the City might have to let go of another police officer and police records keeper. The City Council will also have to consider losing its city status if it cannot pay its bills.
Said one frustrated attendee at the meeting, "Tax or no tax, Normandy Park is stuck between a rock, a hard place, a brick wall, and water."
On a side note, it has been widely reported that Doug Schulze has been named the next city manager for Bainbridge Island.