Vancouver Strong had a tight schedule to develop a sustainable and comprehensive funding strategy for the city of Vancouver. That schedule is now getting a redesign.
Instead of potentially putting something on the ballot this fall to help generate revenue for the city, the committee recently opted to do more research and aim for 2019.
“Any community-based engagement process that is this kind of sausage making — that’s really what this is — you’re going to have these kinds of dynamics,” City Manager Eric Holmes said of changes to the schedule for Vancouver Strong, a group comprised of four committees and an executive council made up of 59 community, business and neighborhood leaders.
The group began meeting in May 2017, tasked with finding solutions to some of the city’s revenue challenges: keeping up with inflation and a cap that limits the city to an annual 1 percent increase in property taxes, and limiting how much the budget can increase to support additional or expanded services. In February, Vancouver Strong had some initial recommendations.
First, take more time. The initial guidelines planned for a complete recommendation in time for the November 2018 ballot, which has an August 6 filing deadline. The group wants to delay any decisions and shoot for the August or November 2019 ballots for any necessary measures.
“Let’s take the rest of the year and take the time to not only craft a thoughtful and viable package but also to engage the community and educate them about all this,” Holmes said.
The second recommendation relates to funding for the Vancouver Police Department. As it stands, $6.1 million in funding for the department will be raised by a new business license surcharge per square foot and per multi-family unit. The fees will go into effect Jan. 1, 2019, unless a replacement funding method is recommended.
Vancouver Strong had a recommendation, sort of.
The group proposed replacing the business license fee with any one of three tools available to the council: utility taxes, per employee business license surcharges, and business and occupation taxes. These tools do not require a ballot measure to approve.
The recommendations do not include specific suggestions, but a 1 percent increase in the utility tax, for example, generates $1 million in revenue. The utility tax is currently 24.9 percent.
The per-employee fee is $90 annually at the moment, with a cap at 400 employees per year per business. A $10 increase equates to an additional $400,000 in revenue.
The business and occupation tax is the only option with a statutory maximum rate. Vancouver can only increase the tax to $2 per $1,000 of gross receipts. The rate is $0.10 currently.
With this initial recommendation, Vancouver Strong sought council direction before moving forward at its meeting this week. But the city council wasn’t ready to proceed just yet. Holmes said they want to see more analysis about what the options mean for taxpayers before providing any input.
A workshop is tentatively scheduled for later this month to consider alternative revenue methods.
The comprehensive funding solution can be delayed without any real impact to the city, but unless new revenue methods are approved for the VPD, the multi-family and business square footage fees will go into effect. Because of the immovable deadline, Holmes said he believes at least that revenue source will be identified by May.
“And the conclusion might be just keep it as it is,” he said. “We need a conclusion on that in order to start outreach and actually notify people on what their bill is going to be.”
