Northwest NEWS

June 8, 1998

Local News

Council scraps tourist district tax idea

Focus now on CIP: $42M in projects, $20M in funding

   by Andrew Walgamott
   Staff reporter

   WOODINVILLE--Woodinville's mayor sounded tired and dejected last week, as if he'd gone a couple rounds with a heavyweight champion. In a sense he, and the City Council, had. "We got beat up pretty bad," said Don Brocha last Thursday, three days after the council dropped the idea of taxing events and performances held at Chateau Ste. Michelle and other tourist district businesses. The city now has one less option for funding parks. But it was also a matter of the council squeezing golden geese a little too sharply and frequently.
   About two dozen business people and local activists filed into a hot upstairs room of City Hall June 1 to protest the tax before the full council. There were representatives from Chateau Ste. Michelle, Redhook Brewery and Columbia Winery at the meeting who detailed how the tax would take money away from charities. Recently hit with the city-wide utility tax, they say they bring in thousands of tourists and thousands of tourist dollars as well as providing park-like grounds, both which benefit the city.
   There were community members, some of whose organizations benefit from events held in the tourist district. They called into question whether the council had considered the effect the tax could have on economics city-wide. The issue didn't even make it to a vote. By consensus the council decided not to move ahead with it.
   Far from feeling beat up, Councilwoman Barbara Solberg called it a "very informative session" where business and community shared their perspectives. "How often do you get that many people coming to the City Council? It was wonderful," Solberg said. The council has now asked city staff to work with tourist district businesses to identify in-kind contributions for parks that could be made in lieu of money. "Maybe there are more things they can do without being hurt financially," Brocha said.
   "The important thing for me," said Councilwoman Marsha Engel, "is that those who didn't want an admissions tax realize that we still need money for parks. If they're willing to contribute, so much the better." The Woodinville Chamber of Commerce has extended an olive branch, offering to help the city find other sources of funding for its projects. Mayor Brocha said the uproar over the tax surprised him. He said he went home from the meeting not feeling well. "We were trying to do our jobs and provide parks for Woodinville. And we were made out to be the bad guy," Brocha said.
   "From the City Council's perspective, this was business as usual," he said. "Faced with a large Capital Improvement Plan and the PRO Plan, we had to look around." After the tax had been killed, and most of the audience had left City Hall, the council took up discussion on this year's six-year Capital Improvement Plan (CIP). Think of the CIP as an iceberg with funded projects above water, and all else lurking below. This year's CIP targets 43 projects that would cost $40 million, but only identifies $20 million in available funding.
   The Parks, Recreation and Open Space Plan, which is coming up for adoption, would cost the city another $12 million to fully implement, and $2.5 million to keep current with growth over the next six years. The plan would buy land for parks as well as provide equipment for them. While taxing the tourist district would have raised only $100,000 a year, by backing down, the council's revenue options for parks have been further narrowed. Right now, parks are funded through the admissions tax on the theater and a real estate sale tax.
   Other funding sources, such as property tax hikes and a business and occupations tax, won't likely be considered. Engel said the voters' message in rejecting two bond proposals for Sorenson and nearby ballfields was partly because they weren't willing to raise their own property taxes for parks. But the search for revenues continues in a round-about way. Later this month, the council's finance committee may look at requiring businesses to register with the city-for free. Penalties would be levied against those that don't. Registration may also find businesses who haven't been reporting sales tax revenues which could bring in additional dollars.
   There may be another answer. "Impact fees are the next big thing," Brocha said. "We're seeing the impacts of growth. We should have done this several years ago." To collect impact fees, the city first has to establish a list of existing and future projects on which to collect impacts. That's partly what the PRO Plan and CIP are about. Brocha believed impact fees, charged to newcomers, will be more palatable for the council.