The University Place City Council is debating the best response to handle growing budget deficits expected over the next decade.
On the immediate to-do list is finding close to $1 million to cut or generate in new revenue to balance the city’s 2017-2018 budget.
The council previously pledged to cut its recreation program starting next year, which will save $390,000 annually. Now it’s looking to generate new revenue to fill the remaining $600,000 hole.
How to do that hasn’t been decided.
Ideas discussed recently include imposing additional taxes on business, negotiating a franchise fee with Pierce County for its use of city right of way and extending the city’s $20 car tab renewal collection past its five-year sunset date.
At a recent finance committee meeting the council seemed less interested in imposing additional taxes on business. Instead, members asked for more information about the franchise fee with Pierce County.
Council members made it clear they are still exploring the best funding scenario.
“We’re not asking for more taxes. We asked for options,” Councilman Chris Nye said.
The city charges other public utilities franchise fees but has not imposed one against Pierce County for its use of city right of way to run its sewer line, said Eric Faison, assistant city manager and finance director.
Faison did not know why the county hasn’t been charged.
The county pays a 6 percent franchise fee to the city of Lakewood to run its sewer on city right of way. UP officials want a similar agreement.
City finance officials say that revenue, combined with an extension of the city $20 car tab fee, would be enough to balance the budget.
When the council approved the car tab in 2013, it included a clause that collections would cease after five years. The condition was included because some council members worried that once added, the fee would be hard to remove.
Continuing the car tab collections would require council action.
The council is looking to generate new revenue because there are few places left to cut to save money, Faison said.
The city previously cut staffing levels by one-third at the start of the recession, leaving little room to cut more personnel, he said.
“Even if you cut the salary or cut the employee, you have to contract out for those services. That can be more expensive,” Faison said.
The city is also limited where it can cut spending because of restrictions on how money can be used. University Place uses 100 percent of its property tax collections to fund public safety, including police and legal services.
That leaves the general fund as the primary funding source for services that don’t have dedicated revenue. Sales tax is the largest contributor to the general fund.
UP voters made it clear in 2014 they wouldn’t support a tax increase. That’s when they rejected a city-proposed levy to support police services.
Residents will be asked again in April to increase taxes through the formation a metropolitan park district to take over recreation programs in the city.
The council will hold a series of public meetings later this year on the budget.