Tacoma City Council Meeting - November 20, 2012

As we teeter on the brink of the holiday shopping season, perhaps it’s only appropriate that a common thread throughout this week’s meeting was small businesses and tax dollars.  Either way, we heard a bit about shopping local, and even more about taxes.  Happy Thanksgiving.

PROCLAMATIONS, RECOGNITIONS, PRESENTATIONS, AND ANNOUNCEMENTS

Mayor Strickland made two proclamations this week:

• This Saturday, November 24, 2012, is Small Business Saturday in the City of Tacoma.  The Mayor encouraged everyone to support Tacoma’s small businesses as you do your holiday shopping this Saturday and throughout the year.
• The Week of November 25, 2012 is Walk the Block Week in the City of Tacoma.  The Walk the Block campaign encourages those of us who are able to walk a little further to get to our destination to do so, raising awareness of the importance of access for individuals with disabilities in our community.  The Mayor encouraged everyone to park a little further from your destinations and enjoy the walk, allowing those who need to park close to do so.

PUBLIC COMMENT
Most comment tonight was related to the first reading of the ordinance that would repeal the nonprofit healthcare B&O tax exemption.  We heard from nearly a dozen commenters speaking in support of the repeal, most also asking Council to pass the change without a sunset provision that would restore the exemption in the next biennium.  The speakers voiced varying degrees of sympathy (most lack thereof) with the two large organizations that would be affected.  Some commenters asked the Council to tax the nonprofits to preserve fire and police and road work services.  A representative from the Chamber offered a counterpoint, suggesting that the proposal penalized the two local businesses affected for getting too big, standing in contrast to the way the City has handled other large entities like Russell Investments, and pointing to the contributions made by the nonprofits to the community.

We also heard comments in favor of Small Business Saturday, and the Go Local Shift Your Shopping campaign, which encourages you to keep your shopping dollars (and by extension, your sales tax dollars) local.  A few comments were also made in favor of the formation of a Transportation Benefit District for Tacoma.

REGULAR AGENDA

A motion to authorize the City’s full and final settlement of the claim of Allstate Insurance Co. vs. City of Tacoma, Claim No. C-006-11, in the amount of $110,000. 

Passed without comment.

RESOLUTIONS

Purchase Resolution No. 38572 Awarding contracts to:

1. Qwest dba CenturyLink QCC, in the amount of $520,000, plus sales tax, budgeted from the Communications System Fund, for an initial two-year term with the option to renew for three additional one-year terms, for a projected contract total of $1,300,000; and Integra Telecom, in the amount of $36,000, plus sales tax, budgeted from the Communications System Fund, for an initial two-year term with the option to renew for three additional one-year terms, for a projected contract total of $90,000, for telecommunications carrier services – Specification No. IT11-0762F [Linda Trehuba, Telecommunications Manager; Michelle Lewis-Hodges, Director, Information Technology];
2. Asphalt Patch Systems, Inc., on its bid of $240,050, sales tax not applicable, plus a 30 percent contingency, for a cumulative total of $312,065, budgeted from the REET Fund and the Streets Special Revenue Fund, for Sidewalk Reconstruction Abatement Program SCF-11, located at 81 sites within the city limits – Specification No. PW12-0121F [Chris Larson, Engineering Division Manager; Dick McKinley, Director, Public Works];
3. N.C. Machinery, in the amount of $719,633, plus sales tax, budgeted from the Solid Waste Fund, for one 2013 Caterpillar 966K Wheel Loader and one 2013 Caterpillar 950K Wheel Loader – Washington State Contract No. 16904 [Gary Kato, Acting Solid Waste Management Division Manager;  Michael P. Slevin III, P.E., Interim Director, Environmental Services]; and
4. Snell Crane Service, Inc., in the amount of $150,000, plus sales tax, budgeted from various departmental funds, for a cumulative total of $350,000, to increase the contract for crane rental services –  Specification No. CT09-0354F [Marie Holm, Senior Buyer; Steve Call, Interim Director, Finance].

The purchase resolution passed without comment.

FINAL READING OF ORDINANCES

Ordinance No. 28099 Establishing a Transportation Benefit District within the City of Tacoma specifying the maintenance and preservation of existing transportation improvements; providing for additional transportation improvements; creating a new Chapter 10.28 in the Municipal Code entitled “Transportation Benefit District”; and declaring an emergency making necessary the passage of this ordinance and its taking effect immediately upon publication.  [Dick McKinley, Director, Public Works]

Councilmember Mello agreed with commenters who had pointed out that the passage of Prop 1 in Tacoma, despite its wider failure indicated that Tacomans on the whole wanted investment in transportation.  Mello clarified, however, that the funds cannot go to Pierce Transit, but would instead have to be invested internally.  The ordinance passed.

FIRST READING OF ORDINANCES

Ordinance No. 28100 Authorizing a zero percent increase in the 2013 general property tax revenue collection, in terms of both dollars and percentage, for the general property tax levy. [Steve Call, Interim Director, Finance]

Ordinance No. 28101 Fixing the amount of the 2013 Ad Valorem property tax levies.  [Steve Call, Interim Director, Finance]

Ordinance No. 28102 Authorizing a decrease in the 2013 general property tax revenue collection, in terms of both dollars and percentage, for the Emergency Medical Services property tax levy. [Steve Call, Interim Director, Finance]

Ordinance No. 28103 Fixing the amount of the 2013 Emergency Medical Services tax levies. [Steve Call, Interim Director, Finance]

Ordinance No. 28104 Amending Chapter 1.30 of the Municipal Code, relating to the joint City-County Law Enforcement Support Agency, to update the reference of Law Enforcement Support Agency to South Sound 9-1-1 Agency. [Tansy Hayward, Assistant City Manager; T.C. Broadnax, City Manager]

When Tacoma consolidated law enforcement support functions under LESA, a number of city employees were consolidated under that entity, but were allowed to continue under their City retirement system.  With the creation of SS911, those employees will be transferred, and this amendment would again allow them to continue their retirement plans.

Ordinance No. 28105 Amending Chapter 8.109 of the Municipal Code, relating to public safety and juvenile curfew, to renew the Curfew Ordinance to make it non-expiring with a biennial review by the Public Safety, Human Services, and Education Committee. [Kelly Crouch, Contracting and Planning Auditor; Linda Villegas Bremer, Director, Human Rights and Human Services] (Page No.) 

Tacoma has had curfew ordinance since the mid 1990s, which keeps getting renewed.  A curfew advisory panel convened to review the effectiveness and continuing need for the curfew found that the curfew continues to have a positive impact on the community and the youth affected, without a disproportionate minority impact.  This amendment would make the curfew permanent (rather than regularly expiring) with regular reviews.

Ordinance No. 28106 Amending Chapter 6A.30 of the Municipal Code, relating to business and occupation tax, to revise the definition of engaging in business to clarify the nexus of board meetings; adopt changes which amend apportionment for digital goods; and update the deduction to refer to state-required tax treatment. [Danielle Larson, Tax and License Division Manager; Steve Call, Interim Director, Finance]

Statewide changes to local business and occupation tax are required to take effect in cities with the tax by January 1, 2013.  These changes include a change in the way digital goods are taxed (think iTunes and books for your Kindle), applying a sales tax based on where the item is downloaded.

Ordinance No. 28107 Amending Chapter 6A.30, relating to business and occupation tax, to add a new deduction for gross income received from public entities for health or social welfare services; and eliminate the partial exemption and deduction provided to non-profit healthcare providers whose annual gross income exceeds $30 million for gross income received from health care services. [Danielle Larson, Tax and License Division Manager; Steve Call, Interim Director, Finance]

This is the item that got the most comment this week, both from the public and from the Council.  It would fully eliminate the B&O tax exemption for large nonprofit healthcare institutions, affecting only two large entities in Tacoma at this time.  Deputy Mayor Lonergan proposed a substitute ordinance that would impose a sunset provision, meaning that the tax exemption would return with the next biennium budget.  Lonergan addressed some statements made during public comment, clarifying that a sunset provision for the elimination of the exemption will not change the current budget; it will not add or subtract from the proposed levels of funding for fire, police, or streets maintenance, and that the changes do not bind a future council to any decision.  The proposed addition of the sunset provision did not pass, but the Council as whole voiced its intent to seriously revisit the conversation around the B&O tax in general, and even more broadly of the City’s approach to its tax system, its fiscal and social responsibilities, and matching priorities with financial realities.  As Councilmember Boe pointed out, this is a stop-gap measure, and for long-term stability, the City will need to take a good look at how its tax policies match up with its stated priorities.

… oh yeah, we seem to remember hearing something about supporting the “Medical Mile” as a priority…

UNFINISHED BUSINESS
None.

REPORTS BY THE CITY MANAGER
None.

COMMENTS AND COMMITTEE REPORTS OF THE CITY COUNCIL

Environment and Public Works Committee – Councilmember Mello reported on updates heard by the committee.

• The Schuster Parkway Trail design process is moving along with feasibility studies of trail options for moving bicycle and pedestrian traffic along the Schuster Parkway Corridor.  Several trail alignments have been identified for further consideration, with the next round of analysis to be presented March 2013.
• Downtown On the Go’s Live Downtown Program has seven employers currently participating, with the City soon to join the program aimed at reducing the “drive alone rate” among commuters by encouraging people who work downtown to live downtown.
• The committee heard other updates on topics including the Six-Year Transportation Plan and every other week garbage pick up.
• The next meeting will include updates on the I-5/SR-16 project, the Pacific Avenue Streetscape project, and other topics.

Councilmember Campbell returned to the “Shift Your Shopping conversation, tying it to the discussion around tax revenue.  Campbell reminded us that sales tax in Tacoma goes to fund our services locally, including the fire, police, and streets that were so popular in public comment.  So when you shop for the holidays, keep your money local – particularly in small businesses. 

Councilmember Boe had a couple fun holiday events to share.

• This Saturday, November 24 at 2:00 p.m. the Broadway Center will host its annual singalong of the Sound of Music at the Pantages.  Come in costume for the fun, the prizes, and singing along to the movie.
• Immediately after the singalong, the City of Tacoma’s tree lighting ceremony will take place in front of the Pantages.
• This Friday, November 23 at 10:00 a.m. the Franciscan Health Services Polar Plaza skating rink opens to the public – bigger and better than ever.

Mayor Strickland brought the meeting to a close, wishing everyone a safe and joyous holiday, and reminding us that City offices will be closed will be closed.

ADJOURNMENT

Happy Thanksgiving from Exit133.  Enjoy the company of your loved ones, and if you’re travelling this week, be safe, and pack your sense of humor.

Read more about the items on this week’s agenda in our Tacoma City Business preview for the week.