The new year will bring a tax break for residents of Liberty Lake – but employees at City Hall will have to wait to see if 2012 will bring news of a 2-percent salary increase.
After over a month of healthy debate, the Liberty Lake City Council reached a consensus on a municipal budget for next year at a special meeting on Tuesday night. The document will include a 50-percent reduction in the utility tax on electric, gas, cable, waste management and phone bills. Residents and businesses that paid 6 percent this year will pay 3 percent in 2012.
Meanwhile, a motion by Council Member Odin Langford to freeze a proposed 2-percent merit step pay increase for city staff found support at the dais as did a hold on salary structure hikes for two full-time employees.
Due to a binding collective bargaining agreement, merit pay raises for the Liberty Lake Police Department will not be impacted by the council’s decision on Tuesday night. Langford also emphasized that the budget could be amended at some point next year to include the step increase for other city employees based on recommendations from Finance Director R.J. Stevenson and interim city consultant Mike Cecka.
“Even though we just passed a budget, we still have a lot of work to do,” said Mayor Wendy Van Orman.
The final budget passed with a unanimous 6-0 vote. Council Member Josh Beckett missed the meeting with an excused absence. The shift to a 3-percent utility tax was approved by a 5-1 margin with Council Member Susan Schuler in the minority.
Schuler expressed support for an alternative adjustment to the tax, proposed by Stevenson, that would have set the rate at 2 percent for electric and gas services while keeping the toll at 6 percent for phone, waste management and cable.
A vote for the 2 percent/6 percent tax ended in a 3-3 deadlock before the 3-percent approach was passed. Mayor Pro Tem Dave Crump, Owens and Langford voted against the 2-percent/6-percent tax while Council Member Cris Kaminskas, Shuler and Council Member Ryan Romney voted in the affirmative.
As far as casting a tie-breaking vote, Van Orman made it clear that, according to Liberty Lake’s form of government, the mayor organizes and proposes a municipal budget, but cannot vote on financial matters affecting the city.
A utility tax task force organized by the Greater Spokane Chamber of Commerce has been critical of the tax and its impact on Liberty Lake businesses. While Schuler said the 2 percent/6 percent approach would be “much friendlier” to both residential and commercial entities, Council Member Judi Owens said the plan represented “a disproportionate shift to the people living in our city.”
“I’d rather have 3 percent across the board,” Owens said. “Businesses cost the city, too. I think they should be paying their fair share.”
Stevenson described how the tax on electricity and gas – even at the lowered amount – will generate approximately $462,000 of the anticipated $622,000 in utility tax revenue for 2012. The city saw around $1.1 million in utility tax proceeds for 2011.
Council members also approved – by a 5-1 vote – a plan to address the debt on the municipal golf course bond with a portion of the funds left over in this year’s ending balance, reported at $2.8 million.
Stevenson indicated that paying off the golf course bond of approximately $570,000 would save the city a total of just under $189,000 in interest. The approach will also mean an additional $63,000 in next year’s general budget that had been set aside for an annual payment.
Schuler’s motion to cut $160,000 from the 2012 budget for a city administrator salary won a second but was eventually voted down, 5-1. Mayor-elect Steve Peterson is expected to make a decision on whether or not to bring back the city administrator at some point next year.