Yelm City Council Rejects 1% Property Tax Levy Increase

Council Approves Cost-Saving Plan for Use of American Rescue Plan Act Funds

Posted

The Yelm City Council opted not to increase its property tax levy by the 1% allowed for by law at its Nov. 23 council meeting, following the conclusion of a public hearing on the matter.

Yelm Finance Director Stephanie Dice presented on the possible action the city council could take to increase the property tax levy in 2022 by 1%, which would have amounted to a total of $1,574,547.11.

The tax rate would have been $1.29 per $1,000 of assessed property value with the increase, but remained at $1.276 per $1,000 of assessed property value, or about $388 over one year for a home of median value at $304,617 as noted during a previous meeting.

The 1% increase, Dice noted previously, would have impacted a taxpayer with a home of median value by $3.96 per year or 33 cents per month.

“Me personally, I’m not voting yes on anything personally that raises the (tax) rate at all,” said Councilmember James Blair. “So how can we do this (in a way) that just keeps it the same?”

Dice said Blair could make a motion to remove the 1% increase from the proposed taxing ordinance before its passage.

Councilmember elect Brian Hess agreed with Blair as he submitted public comment during the hearing portion of the meeting. Hess said the city is already getting a funding increase since property values have increased considerably in the past year.

Dice said not taking the 1% increase would amount to a considerable amount over the years. The city will miss out on this year’s total percentage increase each year moving forward, even if the council were to take a 1% increase in subsequent years, though the loss would only amount to about $15,000 in 2022.

Based on the information presented, Blair moved to amend the ordinance, which was seconded by Councilmember Joe DePinto, and subsequently approved by the council.

The council then passed the ordinance to keep the 2022 property tax levy at $1.276 per $1,000 of assessed property value.

Also at the meeting, Mayor JW Foster swore in Joshua Crossman as an interim councilmember, to replace EJ Curry for the remainder of her term. Foster also swore in Councilmember Holly Smith at the meeting for her upcoming term. Crossman will be sworn in again in January for his full term, along with Hess.

During the meeting, the council approved the use of the American Rescue Plan Act (ARPA) funds that it accepted at its Oct. 26 meeting.

The city will receive two payments, separated by a year, each of $1,320,188.67.

The funds must be used in one of five categories: To aid in public health expenditures; to address negative economic impacts caused by the public health emergency; to replace lost revenue by the public sector; to provide premium pay for essential workers; or to invest in infrastructure.

Yelm City Administrator Michael Grayum said the three categories city staff recommend for the potential uses of the funds include infrastructure, public safety and COVID-19 mitigation efforts.

For infrastructure, city staff recommended the council use the funds to pay off the assessments on the 640 acres it acquired late in 2017 to own the property free and clear, which is part of the Killion Road Local Improvement District (LID) approved in 2006.

Foster signed to receive the deed of the property in December of 2017, acquiring the 640 acres in lieu of the then property owner’s delinquent LID contributions, in addition to about $1.8 million that went into the LID fund.

According to public record, Foster did not seek council approval of the move at that time, which resulted in the city owing money into the future for the property’s LID contributions. Because of this, DePinto raised the question of whether the council actually needed to have approved the allocation of the 640 acres, a question the council will have the opportunity to address if it sees fit.

Grayum said previously that once the city owns the 640 acres, it could then utilize the land at the council’s discretion as long as the land’s use is consistent with the city’s comprehensive and transportation plans.

For public safety, city staff recommended the purchase of cameras for law enforcement as required by state law.

For COVID-19 mitigation, city staff recommended replacing the money the city has spent from the equipment rental and replacement fund, Grayum said. The money was used by the city to invest in remote technology needed for the hybrid environment the city is operating under because of the COVID-19 pandemic.

Two plans were presented to achieve the investments.

The council approved a plan that will free up over $1.4 million for use at the council’s discretion over two years after making the public safety and infrastructure investments. Much of the freed-up funds will become accessible thanks to the balance the city had planned to pay on the 640 acres for the Killion Road LID without the ARPA funds, which will now be paid with the ARPA funds.

The council also approved its 2021 Transportation System plan, which will guide the transportation plans for the city for 20 years.

“Really the purpose of this document is just to make sure that our transportation plan is staying in line with how our city is growing and changing,” said Yelm assistant planner Casey Mauck.

Projects detailed include the construction of a major arterial, which would extend south from 93rd Avenue through the Thurston Highlands, connecting to state Route 507 between Yelm and Rainier. Another project will see the construction of a two-lane highway from state Route 507 on the east side of Yelm with state Route 507 on the sound side of Yelm, creating an alternate route around the southeast quadrant of the city.

“This is the long-range document,” Mauck said. “The way we get these done in the short term is every year we do a capital facilities plan where we say, ‘These are the projects that we are doing this year.’”

She added the city rounds up its funding sources and produces a transportation improvement plan every six years to ensure the projects it has planned are in motion.

She said to fund the projects, the team at city hall is looking at grants and will use initiatives like traffic impact fees.

Dice also presented on the 2021-22 midbienium budget amendment to conclude the public hearing on that matter.

The council will consider the budget amendment at its Dec. 14 meeting.

According to the meeting’s agenda packet, the amended 2021-22 midbienium budget for the city of Yelm shows the total 2021 beginning fund balance to be about $20.9 million. The agenda packet shows revenues for 2021 amounted to about $46.7 million, with total resources coming in at about $67.6 million. With amended expenditures set to about $53.38 million, the amended ending fund balance for 2021 comes in at about $14.2 million.

The ending balance has become the starting balance for 2022, with expected revenues for the year being about $30.16 million. With amended total resources being about $44.4 million, and expected expenditures totaling $30.66 million, the ending balance for 2022 is expected to be about $13.76 million.

The council also accepted a 1.2% interest loan from the Washington State Department of Ecology of $23,862,000, which will be paid back over 20 years, in order to enact phase two of the city’s Water Reclamation Facility overhaul.

Phase one was completed in 2019, and saw the replacement of the reclaimed water pump and the installation of upgraded hardware. Phase two will see the replacement of the current sequence batch reactors to a membrane bioreactor system.

The city will not need to raise water rates to pay off the loan, said Yelm Public Services Director Cody Colt, at a recent study session.

Comments

No comments on this item Please log in to comment by clicking here