Agenda - Council - 06/11/2019 - Laserfiche WebLink

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Councilmember Kuzma commented that this would be $120 per year, which is $10 per month. He referenced the levy amount and asked if that is currently bonded for and whether that is paid back within one year or over multiple years. Finance Director Lund commented that for the purpose of the spreadsheet she put the road debt on the property tax levy, rather than levying. She explained that currently the City bonds for ten years at a time. Mayor LeTourneau stated that the City is considering no longer using bonding and therefore the road financing would be applied straight to the levy. He confirmed that the spreadsheet did not include bonding and instead compared the use of the franchise fee to putting the road debt onto the levy. Councilmember Musgrove asked how road funding was done in the past. Mayor LeTourneau noted that there was not a plan prior to the five-year plan being developed. Finance Director Lund explained that in 2009 or 2010 there was $1,300,000 put into the budget for road maintenance and reconstruction, which was funded by major staff reductions. City Administrator Ulrich stated that there were also one-time funding sources used in the past. He noted that each year $500,000 was included in the budget. Finance Director Lund explained that the City will not be bonding this year and is using previously unexpended funds for the projects this year. She noted that some road improvements are not eligible for bonding and that is why the unexpended funds remained, for use in future projects that could not be bonded for. City Administrator Ulrich stated that in order to maintain the roads in the way the City desires, there will need to be money allocated through franchise fees or increased property taxes. Councilmember Riley explained that while the City was building out, there was not a plan for maintenance and road reconstruction. He explained that the current plan went into place five years ago, using assessments, which residents do not like and is also increasing taxes. He stated that the two other choices would be to raise the property taxes or utilize the franchise fee. He stated that if there was a franchise fee, there would not be an increase of an additional 6.46 percent to property taxes. He stated that the franchise fee is also equal for all users, as the size of a home is not equitable to how much someone drives. Mr. Matthews commented that franchise fees cannot be deducted on income tax but noted that assessments are also not deductible on income taxes and therefore it is a wash on what you can deduct. City Administrator Ulrich welcomed the feedback from the Council. He reviewed the other elements that were included with the case tonight for review. City Council Work Session / May 28, 2019 Page 5 of 7