Port Townsend City Council to hold off on spending $908,000

Timeline extended on decision following annexation into East Jefferson Fire District

PORT TOWNSEND — The Port Townsend City Council is considering extending the timeline for deciding how to spend the city’s $908,000 in banked capacity following its annexation into the East Jefferson Fire District.

“I don’t want people, amongst ourselves or the public, to think that this is something that has been decided,” Mayor Michelle Sandoval said during a workshop on Monday.

“What this topic is about is to consider where we are in this time in our city with the COVID crisis, housing crisis, financial crisis, and if we want to choose to do anything in terms of the banked capacity.”

In February 2019, voters approved the annexation of the City of Port Townsend into the East Jefferson Fire and Rescue (EJFR) coverage area.

EJFR had previously provided coverage to the city via an interlocal agreement to which the city paid the fire district 50 percent of its general tax levy in addition to separate emergency management services and other fire levies.

The annexation allows EJFR to collect taxes from city residents directly rather than having the city pass through the funds for services.

The city agreed in the annexation pact not to collect the property tax in the value it would have paid EJFR for up to four years following the annexation vote, giving the city $908,000 of banked capacity.

It also agreed not to collect any of the banked capacity for 2020, and the amounts for 2021-23 will be graduated in with restrictions as to what the city can spend it on.

Some of the areas where the banked capacity could be spent include local roads, as long as they are consistent with the city transportation plans, contributions to the city housing trust fund, capital needs for parks and trails, as long as they’re consistent with the already adopted functional plans, or 2 percent utility tax relief.

In a resolution voted on in December 2018, the city council outlined a public process to determine if and when the city would collect these funds, and for what purpose.

The city manager has until June to submit a plan for any use of the banked capacity. However, city officials do not have to use the money if they don’t want to.

Should a proposal for the use of the bank capacity come forward and fit the criteria, it would be discussed in a workshop prior to public notice of a hearing. Proposals need to be presented no sooner than June and no later than July each year the capacity is available.

Prior to the coronavirus outbreak, City Manager John Mauro and city staff were working on leads to engage the public in a variety of project options to consider. The original timeline called for identifying qualified project portfolios in February and March, conducting public assessments through April and May, compiling and presenting the results at a town hall-style meeting in June, with a final public hearing in July.

Now the council is looking at extending the time period to November among a few other ideas, such as the possibility of assessing the community’s interest in levying the additional tax through a community survey or virtual town hall.

Another idea is that the city council not levy the bank capacity but negotiate with EJFR to expand the restrictions to assist with relief and recovery from the financial impacts of COVID-19.

Some options could include grants to housing providers for rental assistance, matching funds for neighborhood project ideas, or utility bill payment relief programs.

“There’s no staff recommendation right now on which way we should go,” Mauro said.

“We just think it’s a responsibility for the community to hear a political discussion” about how the process possibly could be changed due to the COVID-19 outbreak, he continued.

“We find ourselves right in the middle of this crisis, thinking, ‘Is there an opportunity here?’”

Council member Amy Howard pointed out the agreement is not so much with the EJFR but with the people of Port Townsend.

“I think there has to be a broader community discussion than just with them (EJFR),” Howard said.

“At this point, I would be most comfortable with that 2 percent reduction, if we chose to go forward, just because that does take some pressure off all utility users in Port Townsend.”

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