City Council

REVISED SPECIAL CITY COUNCIL MEETING TUESDAY, FEBRUARY 12, 2019 CITY HALL 22710 E. COUNTRY VISTA DRIVE 6:00 P.M. 1. CALL TO ORDER 2. ROLL CALL 3. AGENDA APPROVAL 4. WORKSHOP DISCUSSION – Liberty Lake Public Art Policy  Parks & Arts Commission – Comments  Overview of current proposed policy – Jennifer Camp, Operations and Maintenance Director & Katy Allen, City Administrator  Council discussion 5. RESOLUTION  Resolution No. 19-252 – Support of Sustainable Economic Development Funding Strategy 6. CITIZEN COMMENTS 7. ADJOURNMENT The public is invited to attend. Parking and meeting rooms are accessible for persons with disabilities. Contact the City at 755-6700 with 24-hours advance notice for special accommodations.  AGENDA ITEM NO.: 5 BUSINESS OF THE CITY COUNCIL, LIBERTY LAKE, WASHINGTON SUBJECT: FOR THE AGENDA OF: February 12, 2019 Hearing before Senate Financial Institutions, Economic Development & Trade to revise RCW 82.14.370 to enable “border counties” to utilize the 0.09% sales and use tax Tool for economic development DEPT. OF ORIGIN: Planning, Engineering & Building Services EXHIBIT: DEPT. HEAD APPROVAL: Director Resolution Supporting Amendments to RCW 82.14.370 Sustainable Economic Development Funding Strategy White Paper Current 82.14.370 EXPENDITURE REQUIRED: No BUDGETED: No SUMMARY STATEMENT Senator Mark Mullet, Chair of Senate Committee on Financial Institutions, Economic Development & Trade, will be holding a hearing Thursday, February 14, 2019, to amend RCW82.14.370, to allow “border counties” to take advantage of the 0.09% sales and use tax tool currently available to rural communities for public facilities, infrastructure, and personnel in support of economic development. A white paper explaining the benefits of the proposed amendment to jurisdictions located in Spokane County is attached, along with a resolution, expressing the City of Liberty Lake’s support for the proposed amendments. RECOMMENDED ACTION 1. Approve resolution.  RESOLUTION 19-252 CITY OF LIBERTY LAKE SPOKANE COUNTY, WASHINGTON A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LIBERTY LAKE, SPOKANE COUNTY WASHINGTON, DECLARING SUPPORT FOR REVISIONS TO RCW 82.14.370 TO EXPAND THE ELIGIBILITY OF THE SALES AND USE TAX TOOL FOR ECONOMIC DEVELOPMENT TO INCLUDE “BORDER COUNTIES” THAT ARE CONTIGUOUS WITH A STATE OR FOREIGN COUNTRY. WHEREAS, of 39 counties in the state of Washington, only six do not have at least one port district capable of funding economic development activities through a dedicated property tax revenue stream; and WHEREAS, of the six counties that do not have a port district, five are designated by the state as rural, and are therefore eligible to receive 0.09% of the state’s share of the sales and use tax as a funding mechanism for economic development through the provisions of RCW 82.14.370; and WHEREAS, Spokane County is the only county in the state that does not receive either the 0.09% revenue from sales tax or property tax revenue from a port district to support economic development activities, including construction of public facilities and infrastructure, and personnel in support of economic development activities; and WHEREAS, Spokane County is at a disadvantage by not having a sustainable, dedicated funding mechanism directed at capital projects in support of economic development, and supporting business recruitment/expansion/ retention; and WHEREAS, Spokane County is further disadvantaged by its proximity to Idaho, which maintains a business climate wherein a company can save nearly $4 per hour per employee with minimum wage, does not have to pay B & O taxes, pays lower property taxes and low fuel prices, and operates with fewer employer mandates; and WHEREAS, Washington Counties bordering Oregon, a state with no sales tax and the loss of sales tax revenue from Washington residents making purchases in Oregon; and WHEREAS, Senator Mark Mullet, Chair of the Senate Committee on Financial Institutions, Economic Development, and Trade is sponsoring amendments to RCW 82.14.370, to include expanding the eligibility of the sales and use tax tool for economic development to “border counties” that are contiguous to another state or foreign country. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Liberty Lake, Spokane County, Washington as follows:  Section 1: Declaration of Support for Proposed Amendments to RCW 82.14.370. The City of Liberty Lake City Council does hereby support amendments to RCW 82.14.370 to expand the eligibility of the 0.09% sales and use tax tool for economic development defined therein to include “border counties”, defined as “counties that are contiguous with a state or foreign country”. Section 2: Effective Date. This Resolution shall be effective immediately upon its adoption. APPROVED by the City Council of the City of Liberty Lake this ____ day of February, 2019. Mayor Steve Peterson ATTEST: Ann Swenson, City Clerk APPROVED AS TO FORM: Sean P. Boutz, City Attorney  Sustainable Economic Development Funding Strategy Current State Greater Spokane Incorporated (GSI) is the Spokane County-designated Association Development Organization (ADO) for the County. The ADO harnesses community partnerships, including local service agreements with governments, to promote and coordinate business development for the region. Additional partnerships include small business development centers; community, technical and four-year educational institutions; private industry associations; public and private companies and other business development organizations. Community Challenge While Spokane County – and the municipalities within it – has had success in a mostly reactive approach to business development (including recruiting business to the region), it is time to address, among other things, the long-term funding strategy necessary to drive future success. A reactionary approach is not a strategy. The complex nature of business development dictates the ADO needs a plan: one that contains the financial resources to fulfil its mission, strengthens partnerships, enables information sharing among and between interested parties and funds both the infrastructure essentials and administrative needs to both recruit and grow business to and in our region. The Facts • Of 39 counties in Washington State, only six do not have at least one port district. o Some counties have multiple port districts. • Of the six counties that do not have a port district, five are designated by the state (based on population density and total land mass) as rural. o Current statute (RCW 84-12-370) allows designated rural counties to receive 0.09% of the state’s share of the sales and use tax to return to the county for economic development activity. o This statute must be reauthorized, as some counties are only authorized to collect the percentage of the sales and use tax for a total of 25 years; some counties began collecting this tax as early as 1997. o A rural county with one or more port districts benefits from both sources of revenue: sales tax revenue for their rural designation AND property tax revenue from their port district. • Spokane County is the only county in the state that does not receive either the 0.09% revenue from sales tax OR property tax revenue from a port district. • Spokane County is further disadvantaged by its proximity to Idaho, which maintains a business climate wherein a company can save nearly $4 an hour per employee with minimum wage, does not have to pay B&O taxes, pays low property taxes and low fuel prices and operates with fewer employer mandates. Current State Spokane County is at a disadvantage by not having a sustainable, dedicated funding mechanism for economic development. Without a dedicated funding stream directed at capital projects and supporting business recruitment/expansion/retention, the greater Spokane region is at a competitive disadvantage already; being a border county to Idaho exacerbates that disadvantage. Proposed Legislative Solution Spokane County’s ADO coordinated with other affected counties to offer a solution to several incongruent topics within this statute: What: Amend Existing Statute (RCW 82.14.370, Sales and use tax for public facilities in rural counties) How: Add “border county” to the current statute Benefiting: All rural counties (30 of 39) + Spokane County, Clark County, Benton County* and Whatcom County* Below is a brief summary on what will change: • Add language that includes “border counties” to the list of counties that receive the 0.09% sales and use tax tool for economic development. Border county is described as a “county contiguous with a state or foreign country.” • Align the expiration date for all counties receiving the 0.09% sales and use tax tool for economic development. • Align the rate so that each county receives the 0.09% sales and use tax tool for economic development. • Add language to convey that a county receiving the 0.09% sales and use tax tool for economic development may “delegate its role…to the ADO serving the county.” Border County Distinction There are 15 border counties (Whatcom*, Okanogan, Ferry, Stevens, Pend Oreille, Spokane, Whitman, Asotin, Garfield, Columbia, Walla Walla, Benton*, Klickitat, Skamania, Clark), 13 of which already receive the 0.09% sales and use tax tool for economic development. Of the two counties not receiving the 0.09% sales and use tax tool for economic development – Clark and Spokane – only one, Spokane, currently receives no dedicated revenue for economic development; Clark County has three port districts that bring in more than $60 million in revenue for a variety of economic development projects in Clark County. Border counties – like Spokane and Clark County – face unique challenges. Washington counties bordering Oregon – a state with no sales tax – lose sales tax revenue from Washington residents (who pay no income tax) making purchases in Oregon. Washington counties bordering Idaho have different issues: Idaho maintains a business climate wherein a company can save nearly $4 an hour per employee with minimum wage, does not have to pay B&O taxes, pays low property taxes and low fuel prices and operates with fewer employer mandates. In Summary Broadening the scope of the current statute to include border counties is the preferred mechanism to gain sustainable, dedicated funding for not only the Spokane region, but for other counties as well. We strongly support this economic development tool for the whole of Spokane County. *Currently receiving but no longer meeting the definition of “rural.” RCW 82.14.370 Sales and use tax for public facilities in rural counties. (1) The legislative authority of a rural county may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax may not exceed 0.09 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax, except that for rural counties with population densities between sixty and one hundred persons per square mile, the rate shall not exceed 0.04 percent before January 1, 2000. (2) The tax imposed under subsection (1) of this section must be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department of revenue must perform the collection of such taxes on behalf of the county at no cost to the county. (3)(a) Moneys collected under this section may only be used to finance public facilities serving economic development purposes in rural counties and finance personnel in economic development offices. The public facility must be listed as an item in the officially adopted county overall economic development plan, or the economic development section of the county's comprehensive plan, or the comprehensive plan of a city or town located within the county for those counties planning under RCW 36.70A.040. For those counties that do not have an adopted overall economic development plan and do not plan under the growth management act, the public facility must be listed in the county's capital facilities plan or the capital facilities plan of a city or town located within the county. (b) In implementing this section, the county must consult with cities, towns, and port districts located within the county and the associate development organization serving the county to ensure that the expenditure meets the goals of chapter 130, Laws of 2004 and the requirements of (a) of this subsection. Each county collecting money under this section must report, as follows, to the office of the state auditor, within one hundred fifty days after the close of each fiscal year: (i) A list of new projects begun during the fiscal year, showing that the county has used the funds for those projects consistent with the goals of chapter 130, Laws of 2004 and the requirements of (a) of this subsection; and (ii) expenditures during the fiscal year on projects begun in a previous year. Any projects financed prior to June 10, 2004, from the proceeds of obligations to which the tax imposed under subsection (1) of this section has been pledged may not be deemed to be new projects under this subsection. No new projects funded with money collected under this section may be for justice system facilities. (cd) The definitions in this section apply throughout this section. (i) "Public facilities" means bridges, roads, domestic and industrial water facilities, sanitary sewer facilities, earth stabilization, storm sewer facilities, railroads, electrical facilities, natural gas facilities, research, testing, training, and incubation facilities in innovation partnership zones designated under RCW 43.330.270, buildings, structures, telecommunications infrastructure, transportation infrastructure, or commercial infrastructure, and port facilities in the state of Washington.  (ii) "Economic development purposes" means those purposes which facilitate the creation or retention of businesses and jobs in a county. (iii) "Economic development office" means an office of a county, port districts, or an associate development organization as defined in RCW 43.330.010, which promotes economic development purposes within the county. (4) No tax may be collected under this section before July 1, 1998. (a) Except as provided in (b) of this subsection, no tax may be collected under this section by a county more than twenty-five years after the date that a tax is first imposed under this section. (b) For counties imposing the tax at the rate of 0.09 percent before August 1, 2009, the tax expires on the date that is twenty-five years after the date that the 0.09 percent tax rate was first imposed by that county. (5) For purposes of this section, "rural county" means a county with a population density of less than one hundred persons per square mile or a county smaller than two hundred twenty-five square miles as determined by the office of financial management and published each year by the department for the period July 1st to June 30th. [ 2012 c 225 § 4; 2009 c 511 § 1. Prior: 2007 c 478 § 1; 2007 c 250 § 1; 2004 c 130 § 2; 2002 c 184 § 1; 1999 c 311 § 101; 1998 c 55 § 6; 1997 c 366 § 3.] NOTES: Effective date—2007 c 478: "This act takes effect August 1, 2007." [ 2007 c 478 § 2.] Intent—2004 c 130: "It is the intent of the legislature in enacting this 2004 act to reaffirm the original goals of the 1997 act which first provided distressed counties with the local option sales and use tax contained in RCW 82.14.370. The local option tax is now available to all rural counties and the continuing legislative goal for RCW 82.14.370 is to promote the creation, attraction, expansion, and retention of businesses and provide for family-wage jobs." [ 2004 c 130 § 1.] Finding—Intent—1999 c 311: "The legislature finds that while Washington's economy is currently prospering, economic growth continues to be uneven, particularly as between metropolitan and rural areas. This has created in effect two Washingtons: One afflicted by inadequate infrastructure to support and attract investment, another suffering from congestion and soaring housing prices. In order to address these problems, the legislature intends to use resources strategically to build on our state's strengths while addressing threats to our prosperity." [ 1999 c 311 § 1.] Part headings and subheadings not law—1999 c 311: "Part headings and subheadings used in this act are not any part of the law." [ 1999 c 311 § 601.] Effective date—1999 c 311: "Sections 1, 101, 201, 301 through 305, 401, 402, 601, and 605 of this act take effect August 1, 1999." [ 1999 c 311 § 604.] Severability—1999 c 311: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1999 c 311 § 606.]  Intent—1997 c 366: "The legislature recognizes the economic hardship that rural distressed areas throughout the state have undergone in recent years. Numerous rural distressed areas across the state have encountered serious economic downturns resulting in significant job loss and business failure. In 1991 the legislature enacted two major pieces of legislation to promote economic development and job creation, with particular emphasis on worker training, income, and emergency services support, along with community revitalization through planning services and infrastructure assistance. However even though these programs have been of assistance, rural distressed areas still face serious economic problems including: Above-average unemployment rates from job losses and below-average employment growth; low rate of business start-ups; and persistent erosion of vitally important resource-driven industries. The legislature also recognizes that rural distressed areas in Washington have an abiding ability and consistent will to overcome these economic obstacles by building upon their historic foundations of business enterprise, local leadership, and outstanding work ethic. The legislature intends to assist rural distressed areas in their ongoing efforts to address these difficult economic problems by providing a comprehensive and significant array of economic tools, necessary to harness the persistent and undaunted spirit of enterprise that resides in the citizens of rural distressed areas throughout the state. The further intent of this act is to provide: (1) A strategically designed plan of assistance, emphasizing state, local, and private sector leadership and partnership; (2) A comprehensive and significant array of business assistance, services, and tax incentives that are accountable and performance driven; (3) An array of community assistance including infrastructure development and business retention, attraction, and expansion programs that will provide a competitive advantage to rural distressed areas throughout Washington; and (4) Regulatory relief to reduce and streamline zoning, permitting, and regulatory requirements in order to enhance the capability of businesses to grow and prosper in rural distressed areas." [ 1997 c 366 § 1.] Goals—1997 c 366: "The primary goals of chapter 366, Laws of 1997 are to: (1) Promote the ongoing operation of business in rural distressed areas; (2) Promote the expansion of existing businesses in rural distressed areas; (3) Attract new businesses to rural distressed areas; (4) Assist in the development of new businesses from within rural distressed areas; (5) Provide family-wage jobs to the citizens of rural distressed areas; and (6) Promote the development of communities of excellence in rural distressed areas." [ 1997 c 366 § 2.] Severability—1997 c 366: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1997 c 366 § 11.] Captions and part headings not law—1997 c 366: "Section captions and part headings used in this act are not any part of the law." [ 1997 c 366 § 12.]