A-Town Budget Edition 2019

Page 1

BUDGET EDITION 2019

City of Anacortes www.anacorteswa.gov 360-293-1900


Biennial Budget for 2019 GENERAL FUND

17,326,496

PARKS & RECREATION FUND GRANDVIEW CEMETERY FUND PUBLIC LIBRARY FUND STREET MAINTENANCE FUND ARTERIAL STREET CONSTRUCTION

1,785,734 262,661 1,512,030 2,952,088 530,860

ANACORTES TBD #1

1,136,431

WASHINGTON PARK FUND PARKS CAPITAL IMPROVEMENT AMBULANCE SERVICE FUND DEVELOPMENT IMPACT FEE ACFL MANAGEMENT FUND

311,048 2,870,000 3,745,631 160,000 36,279

TOURISM FUND

325,676

DEBT SERVICE

502,200

GROWTH MGMT CAPITAL IMPRV FUND

1,180,863

WATER FUND

15,360,581

SEWER FUND

7,274,309

STORM DRAINAGE FUND

1,477,473

SANITATION FUND

3,657,518

EQUIPMENT RENTAL FUND FIREMEN’S PENSION FUND

2,517,893

Total

64,955,034

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By Laurie Gere, Mayor

29,264

Budget Issue

2019

Dear Anacortes Citizens, The City’s 2019-2020 biennial budget was prepared as a financial roadmap for the City of Anacortes. It is our tool to provide the services and quality of life to every Anacortes resident. Adopted by the City Council, the budget establishes the direction for all City government programs and services for the coming biennium. It is my fiscal responsibility to continuously evaluate City revenue and expenditures with a view of maintaining a strong financial position while providing quality municipal services. The City seeks to support a dynamic and robust local economy with balanced and sustainable growth that will create jobs and improve the tax base within the community.

I am happy to report that the City maintains healthy reserves that allow us to sustain our A-town vibrancy and well-being We are focusing on five areas that contribute to the quality of life for all our citizens - areas that we are paying close and particular attention to: public safety, infrastructure, economic development, disaster preparedness and transparency. The Anacortes Police Department staff includes three administrators, three detectives, eighteen patrol officers (including sergeants and corporals), one narcotics K-9 officer, and one school resource officer. Our non-commissioned staff consists of five records staff, one code enforcement/animal control officer, and one community resource officer. We are staffing the Commissioned Police Department to meet the needs of our growing community.

The City recently entered into an inter-local agreement with Skagit County to provide ambulance service on Fidalgo and Guemes Islands, the inter-local expands the City’s Fire Department service area requiring additional staff and 24-hour services at each of the three stations to meet call response expectations. Public Works is the largest department in the city and is responsible for managing and maintaining construction of streets and sidewalks, water lines, sewer lines and stormwater lines; the production and distribution of water to the region; maintenance of our streets, sidewalks and street signs; maintenance of our storm water and sewer system; City vehicles and equipment fleet; maintenance, repair and construction of City-owned buildings; resource conservation activities within the public right-of-way ranging from street vacations to parades. Our Parks and Recreation staff provides over 70 recreational programs and events for community members of all ages and maintains 21 parks and over 3,000 acres of forest land. The biennium budget includes some significant projects that will improve our parks and recreation programs and facilities. Funds have been set aside for Washington Park infrastructure improvements and Grandview Cemetery improvements and expansion. Funds are budgeted each year to continue progress on the Guemes Channel Trail. The City Attorney’s office provides in-house counsel to City leaders and staff to support the good work they do and ensure the City meets the highest legal standards. One goal this year is to complete implementation of the Laserfiche enterprise content management software across all City departments for


greater transparency and access to all citizens. In 2019, the Administrative Services department will incorporate the business management of the City’s municipal fiber project and IT services. The City employs a full-time public defender and legal assistant to meet the state-mandated standards for delivery of public defense services. The Anacortes Senior Activity Center is a vital community hub where seniors thrive. There are an average of 150 visitors per day and 258 programs per month. The ASAC is staffed by one full time administrator, an administrative assistant, and over 170 volunteers providing nearly 10,000 hours annually of volunteer assistance. For several years the City has researched the possibility of a municipal fiber network. Initially our water and wastewater utility systems transitioned to fiber for our telemetry needs to replace the outdated radio frequency communication systems. In 2019, we will begin Phase 1 of the Municipal Fiber Network system that supports the technological infrastructure for current and future development. Phase 1 will pass 1000 buildings in the Central Business District, Old Town, and M Avenue. We will gain experience in this pilot area that will guide future business decisions about how best to move forward with further expansion of the network. With fiber access, I foresee a community where households can connect all their devices without worry, entrepreneurs have the infrastructure they need to innovate, our education and healthcare providers will have the platform for learning and telemedicine, and the City will have additional capacity to address local challenges and projects. All of this translates into improved economic performance with the creation of more jobs, more innovation, as well as companies relocating or expanding into the City of Anacortes. The information technology (IT) department supports the City’s computing and networking requirements. The IT department is responsible for the operation and security of the City’s computing network at all City buildings, as well as keeping operational 311 desktop and laptop computers, 111 cell phones, and 53 servers.

Our Planning, Community, and Economic Development department is continuing work on several projects including the completion of the Development Regulation updates consistent with the 2016 Comprehensive Plan. Since the Land Use Development code updates are near completion, we are focusing on providing robust economic development, building a strategic plan to address business expansion, retention and business attraction in the community and the completion of our Maritime Strategic Plan. Anacortes Public Library is the only library in Skagit County open seven days a week offering this essential City service. The Library continues to be the “heart of the community” as demonstrated in the huge attendance for programs and events, the demand for materials and downloadable content, the increase in customer help for technology assistance, and the rising number of visitors. The Library is in the process of improving library services with new projects and evaluating all spaces and use to provide programs for all members. The Anacortes Museum serves many constituents. It is also caretaker of three major City properties: the 1910 Carnegie Library Building, the W.T. Preston sternwheel steamboat (both of which are on National Historic Registers) and the Anacortes Maritime Heritage Center. The Finance Department oversees the overall financial operations of the City and balances the budget and keeps to all accounting structures and audit principles. Balancing the City’s 2019-2020 biennial budget is a simple equation of our operating expenditures not exceeding our operating revenues. This budget expresses the City’s commitment to balance fiscal responsibility while meeting City Council and community priorities. It reflects my expectation to maintain and improve our infrastructure. The 2019-2020 Budget provides services and quality of life to every Anacortes resident. Respectfully yours,

Laurie Gere, Mayor

In this publication we explain budget basics and present them in a way we hope you will find engaging. The budget helps decide what kind of services we at the City are able to provide. Each dollar generally represents a project completed or a service provided and those projects and services have positive impacts on people’s lives. A significant portion of the City’s budget is employee expenses. Our employees appreciate that many of them are supported by tax dollars and work hard to maximize the return on your investment. We at the City appreciate that partnership with our community and hope this publication explains a bit about our budget and what we all get out of it.

BUDGET EDITION 2019

City of Anacortes www.anacorteswa.gov 360-293-1900

Photo taken by Rakan Alduaij was digitally enhanced to create the Front cover art.

Budget Issue

2019 ATOT  3


The end of 2018 marked the 6th consecutive year of expanding sales tax revenues for the city of Anacortes, and was by far the highest producing sales tax year in City history. Sales tax is one of the City’s largest tax revenue streams and one of the most important. As general revenue, it can be used without restrictions to support City operations. After the most recent recession, the economic recovery developed slowly, but over the last few years, our local economy has grown. The City’s primary tax revenues bottomed out in 2009 and didn’t recover to pre-recession revenues levels until 2015. During that 6 year period, total tax revenues grew at an average of 4.5%. However, over the past three years, 2016 to 2018, those same tax revenues grew at an average of 8.3% per year. The overall tax revenue increases were led by sales tax, which saw year over year increases in 2016 to 2018 of an average of 12.3%, with fiscal year 2018 totaling $5,126,010 in sales tax receipts. This growth was led by the building industry, automobile sales, the marine industries, and hospitality. The level of growth in the hospitality segment is particularly noteworthy. Revenues bottomed out in 2010. By 2013 that segment

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of the local economy exploded generating year over year growth at an average of 13.3% per year from 2013 through 2017. 2018 experienced another 2.6% of growth over the prior year in hospitality generated sales tax. The City operates under Governmental and Enterprise funds: Governmental funds rely primarily on tax revenues, and Enterprise funds are selfsupporting through user fees, providing utility services (water, sewer, storm drain, and solid waste). The City’s three largest tax revenue streams are property tax, sales tax, and utility tax, and are deposited into the General fund to support the general operations of the City. In 2018, these three revenue streams totaled in at $5,031,862, $5,126,010, and $4,154,023 respectively. Of all of the tax revenues the City receives, property tax is the only one that does not fluctuate with the economy, and is limited to 1% growth per year. The challenge in City finance is the necessary reliance on tax revenues that are dependent on the economy, growing only during an expanding economy, and contracting during an economic slowdown. These are the revenue sources that fund the City’s basic services of public safety, transportation, parks and recreation and library services.

With property taxes capped at 1% growth per year, city finances only work in a growing economy, as basic operating costs generally increase at a more rapid pace than 1%. However, as illustrated in the Tax Revenue chart below, over the past 10 years the City has seen increasing revenues, allowing the City to fully fund it existing operations, keep equipment reserve accounts funded for future vehicle replacement, and add to the City’s cash reserves. Aside from a one-time cash transfer in 2016 from the General Fund to the Equipment Reserve fund, to help fund the future equipment replacement reserve account, the City has banked excess revenues into cash reserves every year since 2010, when a small amount of cash reserves was used to balance the budget during the great recession. The General Fund cash balance currently sits at a healthy $8.1 million. This represents nearly 6 months of general fund operations and satisfies recommended best practices for municipal cash reserves.


Financial Picture By Steve Hoglund, Finance Director

The General Fund cash balance currently sits at a healthy $8.1 million. This represents nearly 6 months of general fund operations and satisfies recommended best practices for municipal cash reserves. The 2019 / 2020 biennial budget was adopted on December 3rd, 2018, with a total budget for fiscal year 2019 of $64,966,034, and fiscal year 2020 of $69,963,013. There are several notable additions to the 2019 budget. One of the salient changes is in the Fire / EMS department. Starting January 1, 2019, a new inter-local agreement between Skagit County and the four largest cities in the county went into effect that changes the way EMS service is provided throughout the County. What will change for the City of Anacortes is the service area is greatly expanded to include not only Fidalgo and Guemes islands, but also the area between the Swinomish Channel and east to Best road. To meet required response times, Station #3, located on Molly Lane and currently operating 12 hours a day, was required to go to 24 hour staffing. To accomplish this,

the City hired four additional Firefighter / Paramedics, the funding for which will be primarily offset by additional funding from the countywide EMS levy, and the balance made up from local city funds.

the City’s Transportation Benefit District is anticipated to generate enough additional funding to support the significant increase in budget. The most exciting addition to the biennial budget is the Municipal Broadband Fiber project. The City has been implementing a fiber system over the past two years to run the telemetry systems for the water and wastewater utilities. That fiber back-bone has excess capacity that will be available to provide broadband to other potential customers, including residential, commercial, and other governmental entities. The biennial budget includes funding of roughly 1.5 million each year to support the fiber initiative, which is expected to generate cash flow by the end of fiscal year 2019, and be cost neutral by the end of 2020.

Other new budget areas in the current biennium are the addition of a Community Youth Center and an increase in the Pavement Management Plan. An anonymous donor has pledged to match dollar-for-dollar any donations made toward the design and construction of the new center, and $2.5 million has been budgeted in 2019 to allow budget authority for that project to get started. The Pavement Management Plan, which pays for the road overlays to repave the worst streets in town, has seen a funding increase from $1.1 million in the 2018 budget to $1.8 million in each year of the 2019 / 2020 biennium. The two tenths sales tax increase from

TAX RE VE NUE S

$20000000 $15000000 $10000000 $5000000 $0 2006

Lodging Tax

2007

2008

REET

2009

2010

2011

Sales Tax

2012

2013

2014

2015

Utility Taxes

Budget Issue

2016

2017

2018

Property tax

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DON MEASAMER

Director of Planning, Community & Economic Development

The Planning Department/ Building Department reviews land use permits and building permits for consistency with adopted zoning regulations and adopted building codes. The planning department is also responsible for periodic updates to various documents that help develop the future vision of the City such as the comprehensive plan, development regulations and strategic plans.

E M I LY S C H U H

Director of Administrative Services

The Administrative Services Department provides management support to City departments, City Council, and the public. The department provides human resources, labor relations, risk management, municipal court services, public defense services, and oversight of the Anacortes Senior Activity Center for the City. Beginning in 2019, the administrative department transitioned to include the IT department and the Municipal Broadband Fiber initiative.

FRED BUCKENMEYER Director of Public Works

City of Anacortes Public Works employees are committed to providing world class service. The scope of responsibilities is far reaching, affecting residents, businesses, and visitors every day. When you walk on

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2019

a sidewalk, drive down a street, draw water from the tap, take your solid waste can to the street, or use a restroom, you are benefiting from services provided by the City of Anacortes Public Works Department.

D AV I D O L I V E R I Fire Chief

The Anacortes Fire Department is an All-Hazards Department that provides The Public Works Department emergency incident manages the construction of streets response and and sidewalks, water lines, sewer lines mitigation to the City of Anacortes and storm sewer and surrounding areas of Fidalgo lines; the production and distribution Island. The Fire Department responds of water to the region; the to emergency & non-emergency calls maintenance of our streets and for structure fires, emergency medical sidewalks and street signs; the services, motor vehicle accidents, maintenance of our storm water and rescues, wildland fires, flooding, sewer system; the purchase and tornadoes, earthquakes, and hazardous maintenance of the vehicle and materials incidents. equipment fleet for all city departments; the maintenance, repair The Fire Department operates out of 3 and construction of all city-owned buildings; and the management of all fire stations with a total staff of 28 commissioned firefighters and an activities within the public Executive Assistant. The Fire Staff right-of-way. includes a Fire Chief, Assistant Fire Chief/Fire Marshal, Division Chief of EMS & Training, 9 Lieutenants, 12 Firefighter/Paramedics, and 4 Firefighter/EMTs. The Department DARCY SWETNAM also maintains a Volunteer Firefighter City Attorney Program that consists of 9 personnel The City Attorney who provide additional fire & EMS works to advance, staff on a part-time basis.

advocate, and safeguard the interest of the City while promoting behaviors that represent dignity and respect of self and of others. The City Attorney provides municipal legal service to the City, its elected and appointed officials, and all city departments, boards and agencies in carrying out the good work they do while striving to maintain accurate, timely, and quality support in accordance with all constitutional and statutory standards.

The Fire Department responds to nearly 4,000 calls for service each year with 81% of our responses being for emergency medical services. The Fire Department includes the following Divisions: Administration, Fire Suppression, Emergency Medical, Rescue, and Fire Prevention. The Administrative Staff offices are located at Fire Station #1, 1016 13th Street.


BRET LUNSFORD

STEVE HOGLUND

The Anacortes Museum provides services to the community and its visitors at multiple facilities, and is also expanding internet accessibility of historical resources. Community engagement is a core value, exemplified by increasing involvement and visitation at our three facilities: The Carnegie Building, the Maritime Heritage Center and the National Historic Landmark W.T. Preston. Museum staff are committed to offering support for all community members on history projects that have present day relevance.

The Finance Administration coordinates the preparation and publication of the City’s Annual Report, Budget and the Capital Facilities Plans. They provide financial planning and analysis support to other City departments, the Mayor and the City Council. They manage the Treasurer’s office and oversee all debt administration, banking services, and City investments. The administrators are also responsible for coordinating internal and external audits.

Director of the Anacortes Museum

Director of Finance

police reports, warrants, court orders, and evidence. They also assist the public, attorneys, and the courts in getting copies of police reports through the public disclosure process. One CSO handles animal control, parking, and abandoned vehicle enforcement, while the other CSO’s duties include coordinating our Auxiliary Patrol volunteers, providing public crime prevention information and presentations, managing our websites, and acting as the department’s Public Information Officer.

JOHN SMALL Police Chief

The Anacortes Police Department is comprised of 26 commissioned members which include the Chief and two Captains. The commissioned staff is divided into two divisions: Patrol and Investigations. The Patrol division is responsible for responding to all types of criminal complaints and suspicious activity, conducting traffic enforcement, and handling any other issue that affects public safety and welfare. The Investigations division conducts follow-up investigation to reported felonies and more complex cases. The three members of this division are also members of the Skagit Multi-Agency Response Team (SMART). The department also has seven non-commissioned staff members which include five Records staff and two Community Service Officers (CSO’s). The Records staff processes

JONN LUNSFORD

Director of Parks and Recreation

The Anacortes Parks and Recreation Department is made up of 14 full time staff positions, over a dozen seasonal staff and almost 50 student recreation assistants. Together, they maintain our parks, Grand View cemetery, city facilities grounds, our community forest lands, officiate youth sports leagues, offer community enrichment classes and provide recreational opportunities for ages 2 on up. Parks and Recreation manages the campground and day use areas at Washington Park, operates the Depot Community Center and schedules after hours use at the Senior Activity Center and Heart of Anacortes. We work with other City Departments and our partners outside the City to protect our local environment and strive to enrich the quality of life in Anacortes.

The Finance Staff manages the accounting activities for the City. They are responsible for accounts payable, payroll, purchasing services and financial reporting. The staff is also responsible for cash receipts, accounts receivable, business licensing and dog licensing. The Utility section is responsible for the billing and collection functions associated with water, sewer, storm drain, solid waste, and utility taxes.

RUTH BAREFOOT

Director of Anacortes Public Library

The Library is the central hub for access to education and learning, digital literacy, and community gathering for all ages. Whether people are looking for a quiet place to read, a knowledgeable expert to ask a question or sit in on a presentation, help downloading a new library app onto their smart phone, use the library as a home office, listen to amazing music at library concerts, crawl along with other toddlers in an early literacy program, spot Harry Potter at an event, check out a book or movie, apply for a passport, and so much more, our library is here to serve you while you thrive in this literate community. Budget Issue

2019 ATOT  7


Anacortes’ assessed valuation at an estimated $5.1 million. However, that boom burst the very same year. By January 1892 the County Board of Equalization had reduced the City’s assessed valuation by 20 percent. The information was included in Mayor W.H. Johnson’s annual message – the first by a City mayor – presented at the first City Council meeting of 1892. Anacortes Museum photos - An early 1900s photo of an AFD fire wagon and firefighters.

Anacortes has always been a scrappy little city, adept at finding ways to get the job done even in the toughest of times. In fact, the City started out with a financial crisis. Because Anacortes (incorporated May 19, 1891) was not fully operational by a June 1 deadline, state law blocked the new City from levying taxes on real estate and personal property that year. The Mayor’s financial report of 1891 shows City expenditures at $27,416.14, and revenues at a meager $1,635.14. Today, as Mayor Laurie Gere presents Anacortes’ 127th budget/ financial message, the City’s total assessed valuation exceeds $3.2 billion. In the City’s second biennial budget, expenditures are set at $64,966,034 for 2019 and $69,963,013 for 2020.

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2019

In 1891, the City spent money to get established: $5,246 to build a City Hall/Police/ Fire building and $900 to furnish it; $3,122 to buy Fire Department apparatus, and $7,056 to plan and complete street and sidewalk improvements. Another $4,892 was used to maintain the Fire Department, Police Department, City Clerk, City Attorney, Health Department and City Treasurer, and to pay for public printing and other incidental expenses. Mayor Johnson reported that the total indebtedness carried over from 1891 was $25,551 – less than half the amount of indebtedness allowed by law at that time. Compounding the problem, incorporation had happened at the height of a boom, with

The first City Hall, with a fire wagon.


By today’s standards, the 1892 debt ratio is staggering, said City Finance Director Steve Hoglund. If we had the same debt level today, the City would owe over $20 million in general debt. The City ended fiscal year 2018 with $465,000 in general debt against taxable property of $3.2 billion, which is .014 percent – only fourteen thousandths of a percent. Mayor Johnson reported a better financial outlook for 1892. In its first full year, the City expected to bring in $52,960 from several sources: a general property tax levy of 10 mills ($40,960), fees for liquor licenses ($8,000), and fees for special licenses, fines and a poll tax ($4,000). But the first debt remained a cloud over the city for a quarter century. In January 1900, Mayor R.P. Thomas submitted a woeful Mayor’s Message to the City Council. He reported outstanding general fund warrants of $59,738 plus interest of $47,790 – at 10 percent accrued interest per year, a staggering total of 80 percent. When cash on hand and delinquent taxes due to the city

An 1891 check signed by Mayor Hogan, that bounced.

On September 5, 1891, a General Fund Warrant was issued to Wells and Joiner from City of Anacortes for the sum of $4.85. It is signed by Mayor F. V. Hogan. It was presented September 26, 1891, but not paid for want of funds. On April 15, 1896, it was paid -- with interest accrued of $2.15 -- for a total of $7.00. That’s about 8% interest.

were figured in, he said the City was left with a deficit of $80,703 “which it is the duty of your body to consider and to devise means to gradually liquidate.” In 1909, City Clerk M.C. Baker was required by a new state law to publish an Estimate of Expenses, which appeared in the Anacortes American on Sept. 30. This simple budget estimated expenditures of $30,600 (including $3,600 to the indebtedness fund, with no total indebtedness mentioned). Estimated receipts were to be $26,896 – including $12,395 for taxes on real and personal property and $9,000 from saloon licenses (which brought in nearly threequarters as much revenue as property taxes). By comparison, in 2018 the City’s

property tax levy was $5,140,925, and business license fees were $70,597, only 1.4 percent of the levy. By 1915 the City budget included a full $21,384 just for its indebtedness fund, with a specific 6 mill tax dedicated to the debt. This was in addition to the 10 mill direct taxation and a 1 mill tax for the Library Fund – a total of 17 mills. In 1915, the City offered a balanced budget, with an anticipated $63,788 in expenses and $65,710 in receipts. The 1915 budget was also the first City budget to be recorded using a typewriter. Once through its growing pains, Anacortes matured into the stable and fiscally responsible City we enjoy today. Mayor Gere and the City Council are proud to lead Anacortes into its 128th year with a balanced budget that strongly supports public safety, economic development, and increased infrastructure investments.

The Anacortes Fire Hall and City Hall building was built in 1891 at 1107 5th Street, between O and N Avenue. It also housed the jail. This photo is c. 1907-14. Budget Issue

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Fiber Optic BroadBand Network “High-speed internet access is an essential component of a balanced and thriving community. Like water, electricity, and other public utilities, Anacortes residents and businesses will increasingly expect high-speed access to be reliable and affordable throughout our city.” ~ Mayor Gere

Overview The City of Anacortes is improving the reliability and speed of internet services in town and is constructing a fiber optic based internet network for city and community use. High-quality affordable broadband technology gives consumers access to super-fast speeds and provides the entire city with new opportunities to grow economically. Greater accessibility and faster speeds translates into improved economic performance with the creation of more jobs, more innovation, as well as incentive for additional infrastructure investments and companies relocating or expanding into the City of Anacortes.

Implementation The City has an aggressive plan of completing fiber to the homes and businesses throughout all of Anacortes in the next 4 years. Over 1600 community members have completed a survey expressing interest in an Anacortes municipal fiber system. The first year we will pass 1000 homes and businesses in our Commercial Business District, Old Town, and M Avenue corridor where overhead utility poles are readily available. The second year we will pass another 1000 buildings and then will branch out into the homes and neighborhoods that require underground connections. Our business plan suggests that a 35% connection or “take

2019 PILOT AREA

rate”will ensure success. Recruitment of a Municipal Broadband Business Manager is underway.

Financial Analysis The City Council allocated funding for the initial startup costs through the use of reserves in the 2019-2020 biennium. Business modeling shows that annual net revenues will exceed annual costs and we expect to be cash flow positive in 2-3 years. The City has an estimated 5500 potential customers. To be successful we need to achieve a 35% market share which equates to 1925 customers. To date over 1600 have completed the survey, the strong majority expressing interest in the service. Initial financial modeling estimates a flat-rate target cost of around $40-50 per month for internet access with download and upload speeds of at least 100 megabits per second and $70-80 for one gigabyte per second. Commercial rates are still being analyzed. The lease of wholesale dark fiber will also provide revenue options. A fiber telemetry backbone was built to support the Anacortes public works telemetry system. Fiber was installed to improve the water and wastewater utilities ability to monitor and communicate with their pump stations, water tanks and distribution system. The excess fiber capacity is being used to support the new fiber broadband system.

2020 PILOT AREA

How Do I Sign Up? The City is busy establishing the foundation for this new business. We expect to be enrolling new customers in mid-2019. 10 ATOT Budget Issue 2019


Property taxes is one of the City’s largest and most important tax revenue streams, it is also the most confusing and difficult to understand. Washington State has what is called a budget based system of property taxation. That means the existing tax levy, or tax budget, is submitted to the County Assessor, who then divides that amount by the value of all properties in the City. That calculated number is called the millage, and it is the set amount of tax per thousand of assessed value that is applied against a property to obtain the amount of property taxes owed. The Assessor then collects enough taxes to cover the amount of the tax levy. The tax levy can be increased by 1% per year through an adopted City Council resolution; new construction assessments are added to the tax rolls as well. There are three parts to the property tax levy: The levy amount (or levy budget), the assessed value, and the levy rate (or millage). The formula for the City of Anacortes levy starts with the existing 2018, adds 1%, is divided by the assessed value expressed in thousands to get the millage:

On top of the confusing formula, there are factors that go into the property assessment, and the City’s assessed value. Since the levy is budget based, the value of a property doesn’t have direct effect on the amount of tax that property pays. As property values increase, the millage decreases, and likewise as values fall, the millage increases. However, if a property’s assessment increases faster than the average of the other city properties, that property’s taxes will go up faster than the average property. Additionally, there are properties that may become exempt from paying property taxes, for example there are some income and age criteria that may exempt or reduce the amount of taxes paid on a property, and those taxes due will then be redistributed to the remaining taxable properties. There is a lot of good information available on the County Assessor’s website on property taxation at https://www.skagitcounty.net/Departments/Assessor/ main.htm.

For example, the property tax on a home assessed at $419K would be approximately $4393 and is distributed as indicated. The City’s portion is $659.

Levy: 5,038,278 Add 1%: 50,383 Assessed Value: 3,289,763,092 Expressed in thousands: 3,289,763 Millage: 5,038,278 / 3,289,763 = 1.5468

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HANDY NUMBERS Emergencies........................................... Dial 911

City of Anacortes’ Transportation Benefit District

City Hall.......................................... 360-293-1900

Often misunderstood as the tax that is ‘to be determined’, Anacortes’ Transportation Benefit District (TBD) was formed in 2014 to fund desperately needed street improvements. Washington State law (Chapter 36.73 RCW) authorizes cities to form transportation benefit districts, quasi-municipal corporations and independent taxing districts that can raise revenue for specific transportation projects, usually through vehicle license fees or sales taxes. Transportation benefit district revenue may be used for transportation improvements included in the City’s transportation plan. While the law authorizes TBD revenue for construction, maintenance, and operation costs, Anacortes as opted to spend all TBD revenue on road rehabilitation. City engineers have dubbed TBD revenue as ‘paint it black’ money. The initial revenue source for the City’s TBD was a $20 car tab fee. Each vehicle licensed in Anacortes was charged this additional fee, and between 2015 to 2018 the City collected a combined $1,209,352. While having a new TBD revenue source for street rehabilitation was much appreciated, the needs quickly surpassed the means and public works was once again searching for more funds just to keep up with maintaining all our 122 miles of paved streets. The backlog of maintenance was growing quickly and “if these issues are not addressed, the quality of the street network will inevitably decline. In order to correct these deficiencies, a cost-effective funding and maintenance and rehabilitation strategy must be implemented.” (Pavement Management Report, 2016). The pavement report continues to explain that if “current pavement maintenance funding is exhausted and little or no maintenance is applied over the next ten years, already distressed streets will continue to deteriorate”. With this wisdom came the search for more revenue. Success came on November 6th, 2018, when Anacortes voters approved a sales tax increase of .2% to fund street improvements. This new TBD revenue source will provide approximately 1.1 million dollars in revenue per year. This sales tax increase will take effect on April 1st, 2019 and the current $20 vehicle license fee will end on March 31st.

Human Resources............................360-299-1941

Facilities............................................360-299-1961 Finance........................................... 360-299-1962 Fire Department.............................360-293-1925 Library............................................. 360-293-1910 Legal................................................ 360-293-1912 Maintenance & Operations............ 360-293-1921 Mayor’s Office.................................360-299-1950 Museum.......................................... 360-293-1915 Municipal Court.............................. 360-293-1913 Parks and Recreation..................... 360-293-1918 Permit Center.................................. 360-293-1901 Planning Department.....................360-293-1907 Police Department........................ 360-293-4684 Public Works.................................... 360-293-1919 Wastewater Treatment Plant.........360-299-0953 Water Treatment Plant.................. 360-428-1598

COMMUNITY RESOURCES American Red Cross........................360-293-2911 Anacortes American.......................360-293-3122 Anacortes School District.............. 360-293-1200 Anacortes Senior Center............... 360-293-7473 Boys & Girls Club........................... 360-588-9045 Chamber of Commerce..................360-293-7911 Chamber of Commerce................360-293-3832 Driver’s Licensing Office.............. 360-588-0508 Fidalgo Pool & Fitness Center........ 360-293-0673 Island Hospital............................... 360-299-1300 Passport Applications..................... 360-293-1910 Port of Anacortes.......................... 360-293-3134 SKAT Transit...................................360-757-4433 US Post Office.................................360-299-6689 Vehicle/Vessel Licensing Office....360-293-5533 WA State Ferries............................ 800-843-3779 Waste Management......................800-592-9995 Budget Issue

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Solid Waste Holiday Schedule for 2019

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Brad Adams

There is no garbage collection on the following holidays. Garbage collection will be moved a day.

Ward 2 360-391-9771 brada @cityofanacortes.org

Martin Luther King Day

Monday, January 21, 2019 Collect Mon and Tues on Tues, Jan 22, 2019

Anthony Young Position 7 360-873-8407 anthony @cityofanacortes.org

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Observed Thursday, July 4, 2019 Collect Thurs and Fri on Fri, July 5, 2019

Labor Day

Monday, September 2, 2019 Collect Mon and Tues on Tues, Sept 3, 2019

Bruce McDougall

Position 360-551-5554 brucem @cityofanacortes.org |

Veterans Day

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Monday, November 11, 2019 Collect Mon and Tues on Tues, Nov 12, 2019

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Liz Lovelett

Thanksgiving

Position 6 360-588-8707 lovelettl @cityofanacortes.org

Thursday, November 28, 2019 Collect Wed and Thurs on WED, Nov 27, 2019 Friday, November 29, 2019 Collect Fri and Mon on Mon, Dec 2, 2019

Christmas 2019

Matt Miller

Position 4 360-588-9070 mattm @cityofanacortes.org |

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Ryan Walters

Ward 1 360-610-7770 ryanw @cityofanacortes.org

2019

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Budget Issue

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Ward 3 360-840-5415
 ericj@ cityofanacortes.org

Independence Day

14 ATOT

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Eric Johnson

Memorial Day

**If your collection day is Thursday be sure to put your garbage out a day EARLY!**

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Monday, May 27, 2019 Collect Mon and Tues on Tues, May 28, 2019

Wednesday, December 25, 2019 Collect Wed and Thurs on Thurs, Dec 26, 2019

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Presidents Day

Monday, February 18, 2019 Collect Mon and Tues on Tues, Feb 19, 2019

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A FEW OF THE 2018 PROJECTS In 2018 the City continued an emphasis on road maintenance with a large overlay project on M Avenue from 27th Street north to 8th Street. Water lines were upgraded, two dozen 90-year old sewer manholes were replaced, the sewer line was reinforced, 80 ADA ramps were either built, rebuilt or retrofitted, and a raised crosswalk was installed at Whitney School.

Bike Boulevard Neighborhood Greenway

Local streets with low existing speeds and volumes offer the basic components of a safe bicycling environment. The Anacortes Bike/Pedestrian Advisory Committee (ABPAC) has chosen a few routes in Anacortes for biking, with the goal of getting more people onto bikes that may be concerned about sharing the roads with vehicles and to create more non- motorized facilities in Anacortes.

Annual Street Overlays

The reconfiguration of space at the Anacortes Public Library responds to the needs of the community for improved access to popular collections and services, technology, and community gathering. New and improved RFID equipment was installed to improve the customer experience and ease staff maintenance efforts. Additionally, Open Hours for the library were improved to enable better access for the community.

Library Reconfigurtation

The City Facility LED Lighting Project finished up a successful year converting its facilities to LED lighting. Of significance was a grant secured for the complete LED project at the Water Treatment Plant through Puget Sound Energy for $110,353.05. The LED Library project was completed in April and reduced the kWh usage from 236,640 down to 58,960 in the first 8 months, with a projected savings of $5k.

City Facility LED Lighting Project

The Operations Facility remodel was a 100% redesign/remodel removing all existing walls, plumbing and electrical. City staff completed most work internally only contracting electrical, HVAC, and drywall. We could not have pulled this remodel off successfully without the help from all departments in Operations, Water distribution, Parks, Facilities, and I.T.

Impact Fees

In May 2018 the City council adopted Ordinance 3022 regarding reductions and waivers to General Facilities charges and Impact fees for construction of new affordable housing units. The result allows for such projects as the Anacortes Family center 20 unit apartment building to move forward only having to pay 20 % of the impact fees and no general facilities charges for sewer, storm and water.

Operations Facility Remodel

Budget Issue

2019 ATOT  15


C I T Y

O F

A NAC O RT E S

904 6th Street P.O. Box 547 Anacortes WA 98221

ECRWSS Resident

Every year, Mayor Gere honors City Employees with the Pride in Service Award. In December 2018 and January 2019, she visited the Senior Activity Center, Public Works, Police Department, Planning, Parks & Recreation, Library, Finance, Fire Department, and Court departments, along with City Council. In all, 56 awardees received tokens of appreciation for contributing a combined 588 years of service to the citizens of Anacortes.

PRE-SORTED STANDARD US POSTAGE

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Anacortes, WA PERMIT NO. 22