Vancouver sifts through revenue options

Vancouver is set to avoid layoffs through 2012, but to keep city services at the same level in 2013 and beyond, it’s going to take a fresh source of revenue, City Manager Eric Holmes told the city council Friday.

In a daylong retreat at the new City Hall building downtown, Holmes said that to keep police, fire, transportation, parks and other city services as they are now, more taxes and fees are going to have to be a part of the solution.

“There is not a way to fix the problem by rearranging pieces. The pieces are broken,” Holmes said.

The council spent the day hashing out every possible option — including a 0.1 percent public safety sales tax, a $27 million fire station capital bond, a $20 vehicle license fee, or forming a metropolitan parks district.

All of the options the council discussed, excluding the $20 car license fee, would require voter approval.

City finance analysts said the budget, adopted last fall, will remain balanced through the end of the biennium, although inflation, the economy and labor negotiations are variables.

“Folks here are anxious about their jobs, and all indications are we are stable for this budget,” Holmes said. “I cannot guarantee anybody anything, but indications are we have a spot-on forecast.”

But if nothing changes, Vancouver will face a deficit of $2 million to $4 million in both 2013 and 2014, based on a projected 2 percent inflation rate. That deficit will be wider if inflation is higher.

Additionally, grants that pay for 32 police and fire positions are set to expire in two years, and the city will have to come up with an extra $3.3 million annually to keep those employees on board.

The council talked mostly in broad strokes about which options it may favor. No measure will likely be put before the voters this year.

“We have reforms we need to seriously pursue before we go asking for revenue,” Holmes said. “I do not anticipate having anything ready for you in 2011.”

Several councilors even mentioned reinstituting a business and occupation tax, which the city eliminated in the mid-1990s.

One thing that may happen this year is a council-enacted $20 car license fee. State law allows cities to impose a $20 fee without a vote; anything more requires voter approval.

Vancouver’s capital fund for new roadways is nearly expired, and all new projects are set to end after this year. Federal and state grants typically require matching funds from the city. Currently no such funds exist.

To charge the fee, the city would have to create a Transportation Benefit District through ordinance, with a public hearing and council vote. A $20 fee would raise $2.1 million a year.

Mayor Tim Leavitt indicated he was behind such a move.

“I’d like to see this council weigh in on transportation issues sooner rather than later,” said Leavitt, who added the best way for the city to bring in jobs and development is to build infrastructure.

Councilor Jack Burkman said he’d like to put a license fee to voters, rather than impose the fee, fearing it could turn residents sour toward voting on other measures the city may ask for in the future.

But Councilor Jeanne Harris noted that people may need to see the benefits the fee brings before they can fully realize how much good it can do.

“In other communities that have done it, people have been upset for a little bit of time, but it’s almost like you have to seed the (benefit district) to see the benefit,” she said.

The council also continued its discussion of finding new ways to deliver fire and parks services.

A regional fire services study is under way, and a blue ribbon commission on regionalizing parks is finalizing its recommendations. The formation of both would also likely include a tax increase.

The council will have another budget retreat in June to further discuss public safety funding in particular, and will narrow down its potential ballot measures as the year goes on.

But as of now, “everything’s still on the table,” Holmes said. “It seems there’s a heightened sensitivity to transportation, but everything’s still on the table for further discussion.”

Andrea Damewood: 360-735-4542; andrea.damewood@columbian.com.