Sequim City Council to consider sales tax hike

By Jeff Chew
Peninsula Daily News

SEQUIM — The Sequim City Council on Monday night will consider placing a one-tenth-of-1-percent sales tax increase on the Aug. 7 ballot to raise revenue for a new Sequim police station.

The idea is to give city voters notice of an upcoming Sequim sales tax question before Clallam County commissioners decide to put a similar measure before voters in February.

The City Council will consider the proposal at a 6 p.m. meeting in its chambers at the Sequim Transit Center, 190 W. Cedar St.

County commissioners have not made a decision on a law and justice departments’ request to put a one-tenth-of-1-percent juvenile facilities sales tax increase on the February ballot.

Final county budget hearings are set for 10:30 a.m. and 6 p.m. in Room 160 of the Clallam County Courthouse, 223 E. Fourth St., Port Angeles.

Mayor Ken Hays said the reason the council will contemplate presenting the ballot proposal to Sequim voters is because the city would generate more revenue with its own measure than it would through a county measure.

“We’re bringing it to the council in kind of a hurry-up way because the county’s planning on doing it,” Hays said, adding that the city will get less if county voters pass its proposal.

“If we do it, we get it all,” he said.

“All we’re going to do is to ask the council to put it on the ballot.”

If there is enough public opposition to it, Hays said, the council would still have until May to pull it off the ballot.

The city’s proposal would only generate revenue earmarked for a new police station, he said.

City Manager Steve Burkett said if Sequim voters approved a sales tax increase, it would generate $240,000 for the city and $40,000 for the county.

Compared with that proposal, he said, if the countywide measure passes, the county would raise $600,000, with only $88,000 going to the city of Sequim.

Build police station

Burkett said $240,000 in additional sales tax revenue would certainly help the city in building a new $6 million to $9 million police station.

“It would probably not cover a whole bond to cover a new police station, but it would be a substantial amount” toward it, Burkett said.

Burkett has pointed out that the city now rents additional space for police and the public works, planning and building departments in two different locations, costing the city about $200,000 a year that could be going toward a mortgage payment.

While the new sales tax dollars could help build a police station, the proposal to build a new City Hall would have to be financed through a traditional bond issue, in effect a loan to the city, Burkett said.

“The truth is we might get a little criticism,” Hays said, in light of tough economic times.

But he reiterated that the council could further discuss it and decide to pull it off the ballot should that criticism grow too intense.

A resolution that will go before the seven-member council Monday states that the city faces a “loss of resources” given the recession.

Liquor tax diversion

It also cites the fact that Gov. Chris Gregoire announced the diversion of local liquor tax revenue to the state that would result in an anticipated loss of revenue to the city’s general fund totaling $33,191 in liquor excise tax and $41,009 from liquor profits.

That comes with state voters this month approving Initiative 1183, a plan to privatize liquor sales and dismantle controls that have been in place statewide since Prohibition giving the state control of liquor sales.

“The city’s general fund cannot fund the debt service for a new police station and support the increasing costs of public safety services,” the resolution to be considered Monday night says.

The City Council in September approved the $1.25 million purchase of a 22,000-square-foot property with existing buildings at the corner of North Sequim Avenue and West Cedar Street to go toward the future site of a new City Hall and police department.

The property was owned by Serenity House and includes commercial space for Serenity House and a hair salon and a 10-unit apartment complex for transitional housing.

The city’s purchase would in effect create public ownership of the entire block of the north side of West Cedar Street from North Second Avenue to North Sequim Avenue.

The city and Clallam Transit under an agreement share the Sequim Transit Center building where the City Council meets.

Under the agreement that has to go through escrow, the city also would lease the property to Serenity House of Clallam County for $1,500 a month for three years so long as Serenity House pays for the insurance and maintenance.

The property adjoins existing city-owned property on West Cedar Street, giving the city all the land it needs to build a new City Hall.

The new City Hall would put the departments of public works, planning, human resources and the city attorney under one roof, along with the police station.

Proposed is a City Hall and police station of about 40,000 square feet, a project that could range between $12 million and $18 million, Burkett said.

The city recently remodeled its existing City Hall on West Cedar Street for about $38,000, which was intended to last up to five years.

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Sequim-Dungeness Valley Editor Jeff Chew can be reached at 360-681-2391 or at jeff.chew@peninsuladailynews.com.

Last modified: November 26. 2011 4:12PM
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