Sales tax hike before Port Angeles City Council

Funds would address backlog of repairs

PORT ANGELES — The Port Angeles City Council will vote on Tuesday next week on a sales tax hike for the Transportation Benefit District to boost funding to help address millions of dollars needed for repairs and improvements.

The council discussed the ordinance on Sept. 5. City staff estimated then that increasing the Transportation Benefit District (TBD) tax from two-tenths of 1 percent to three-tenths of 1 percent would raise $509,100. It would cost each household $18.90 a year, while a property tax to collect the same amount would cost a household $51 a year.

Mike Healy, director of Public Works and Utilities, said the city’s capital facilities plan (CFP) contained about $180 million in improvements that directly related to transportation, but there were many more transportation-related projects that didn’t fall under the CFP that also needed funding.

If approved, the city could start collecting the new tax on Jan. 1.

Deputy Mayor Brendan Meyer said the ordinance was not something he would usually support, but he was moved to do so because the city had to address the backlog and a sales tax that spread the financial burden over residents, businesses and visitors was preferable to a property tax that was borne only by homeowners.

“Normally I don’t vote for increasing non-voter-based tax increases, but in this case, I’m super worried that our transportation infrastructure is deteriorating faster than we can build it, so this for me is a really important thing to push forward,” Meyer said.

Mayor Kate Dexter said she supported the ordinance, even though she said it was a regressive tax and the council’s legislative priority has been pushing for a non-regressive tax structure.

“It’s not just the 20,000 people who live here who are using our roads, so I think it’s appropriate where we can capture tourist dollars as well,” Dexter said. “But it is frustrating.”

Rather than asking municipalities to continue raising sales and property taxes, Dexter said the state needs to be “looking at the bigger picture and finding a way to really, truly fund programs.”

The city council in 2017 created the TBD as a way to fund transportation projects, and voters approved the two-tenths of 1 percent sales tax.

Wastewater system

Also facing a backlog of repairs and improvements — and a need for funding — are the city’s aging wastewater and stormwater collection systems.

City civil engineer Lucio Baack and Mackenzie Capaci and Michael Lubovich of Kennedy Jenks Consultants presented to the council the draft of a Wastewater Comprehensive Plan that included recommendations for capital improvement projects and funding strategies, and implementing an annual repair and replacement program that would start to address a $126 million backlog.

Much of the city’s wastewater collection is handled by the original system that was built downtown more than 100 years ago.

“The average life expectancy we would suggest for a pipe would be around 50 to 70 years depending on the pipe material,” Lubovich said. “The oldest [in Port Angeles] was built between 1915 and 1935.”

In addition to its ailing condition, the wastewater system’s capacity limitations constrain new construction, particularly of badly needed housing.

The city does not collect enough revenue to fund capital improvement projects and the council heard two possible scenarios for financing the wastewater system. One would be cash-financed and funded through annual wastewater rate increases. The other would use cash and debt (via loans) financing.

The consultants also recommended the city consider increasing its system development charges for connecting to the existing water and sewer systems. That would lessen the cost burden on existing customers, they said, while providing revenue to fund capital improvements.

Lubovich said Port Angeles’ system development charges are lower than other cities in the area. For example, Port Angeles’ system development charge for a single-family home. Port Townsend charges $3,758 and Sequim charges $7,548. In other parts of the state, North Bend charges $19,152, Poulsbo charges $14,953 and Carnation charges $10,158. The maximum allowable rate the consultants suggested for Port Angeles would be $8,912.

Council member Lindsey Schromen-Wawrin said he had concerns about the willingness of developers to pay a charge of $8,912 when the wastewater system has so many problems. He said he was also reluctant to fund capital improvements based on the possibility of new development.

“The challenge I’m seeing is we’re barely seeing new development in Port Angeles,” Schromen-Wawrin said. “If we increase the costs of that new development, how can we do this in a way that doesn’t discourage new development in the right areas of town?”

Dexter said it would be helpful to see utility rates and system development charges from cities comparable to Port Angeles that did not have booming development.

“I’m not arguing the dollar amounts, but also what I think about what we can afford and how we’re thinking about financing, it would helpful to see that,” she said.

________

Reporter Paula Hunt can be reached at paula.hunt@soundpublishing.com.

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