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Federal Way feels state's budget pain

Federal Way officials aren’t looking forward to the outcome of this year’s state budget process in Olympia, particularly with a recent announcement that the budget deficit is worse than initially projected.

Still, the city is holding out to see what happens with its two main priorities — transportation improvements and about $500,000 in Initiative 695 backfill money.

If too much state and county money dries up, the city could be in the position of having to make some cuts in its operating budget.

“The budget deficit looks more daunting than previously expected,” said assistant city manager Derek Matheson. “That clearly hurts us in our goals for this session.”

City officials haven’t discussed what will happen if the I-685 backfill doesn’t come through, Matheson added.

Specific departments might be asked to trim costs however they can. The city also could choose to target specific programs to cut costs.

“There are a million ways to trim $500,000 out of a budget,” Matheson said. “It’s hard to say.”

The city’s capital facilities budget could still allow for some projects to continue, but city policy doesn’t allow money to be transferred from the capital budget to the operating budget.

The City Council will have to vote in 2003 whether to continue a 5 percent utility tax passed in 1996 for several capital improvement projects, including Celebration Park and a public safety facility.

City officials knew the backfill was in jeopardy but are still hoping for the best.

“We weren’t willing to concede defeat,” Matheson said. “We thought there was a chance to preserve all or some of the backfill.”

Here’s how city interests are faring in the Legislature so far:

• Transportation. The House and Senate both passed regional transportation funding bills, which, if they become law, would create regional taxing districts to tackle local transportation projects.

The city favors the House plan’s broader opportunity for city input into which projects are funded. The Senate version, in comparison, places project and funding decision-making authority with county councils.

Philosophically, city officials disagree with a regional transportation package because it removes responsibility from the state to improve transportation. But Matheson said earlier that the city would support legislation as long as cities retained a place at the table to secure funding for their transportation needs.

Federal Way officials are somewhat relieved that lawmakers are working on associated state transportation funding to help drive the regional package.

“Most in Olympia feel a regional package on its own doesn’t mean much without a state package,” Matheson said. “We support (regional transportation funding) because we see it as a step we have to take to get the robust state package.”

• Public safety. A coalition of cities is working on legislation to clarify contradicting regulations for housing prisoners in jails outside arresting agencies’ jurisdictions.

The Federal Way Police Department transports prisoners to four other county jail facilities besides King County. The city doesn’t have its own jail. In an effort to cut jail service costs, the department opted for other, less expensive jails.

• County utility tax. City officials are opposing a bill that would give counties the authority to levy a utility tax of up to 3 percent of assessed property values.

Matheson said the bill essentially would double-tax city residents who already pay a city utility tax.

Counties currently don’t have the authority to levy a utility tax, but cities can tax up to 6 percent of assessed property value.

Federal Way residents pay a 5 percent utility tax. If the county utility tax measure passes, that could add another 3 percent, totalling an 8 percent utility tax for FW residents.

“Cities are concerned because we see it as double taxation for businesses and residents,” Matheson said.

Instead, cities are working for a 6 percent county utility tax only in unincorporated areas.

• Comprehensive plan relief. City officials are asking legislators to rescind the mandatory five-year comprehensive plan update and to delay until 2004 the city’s five-year update, due this year.

City staff expect they could save some money if they could stretch out the frequency with which they had to undertake the updates.

For 2001 and 2002, comprehensive plan updates were budgeted at $10,500, which covered staff overtime and printing costs but not the regular salaries of city employees working on plan updates during normal hours.

Eliminating the mandate would not prevent cities from updating their comprehensive plans every five years — if they felt it was needed. “It gives us some flexibility,” Matheson said

Staff writer Erica Jahn can be reached at 925-5565 and ejahn@fedwaymirror.com.

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