The Federal Way City Council is considering a storage facility registration fee. MIRROR FILE PHOTO

The Federal Way City Council is considering a storage facility registration fee. MIRROR FILE PHOTO

Federal Way looks at imposing storage facility registration fee

Revenue would be used to curb potential shortfall for 2019-20 budget

The city of Federal Way is considering a storage facility registration fee as a possible new revenue stream for the 2019-20 budget.

The fee, which the Federal Way City Council is expected to vote on during its June 5 meeting, was one of several revenue-generating options discussed at a special budget meeting on Tuesday.

Several storage facility owners spoke against the fee, saying they feel their businesses are being singled-out.

Bob Oldright, one storage facility owner, told the council he didn’t want this fee to be entirely on the backs of these businesses, adding they function similarly to apartments.

“Adding another fee… does become a challenge because we have a facility that’s located on the edge of the city and most of our competition comes from Kent and Des Moines,” Oldright said.

He believes this could cause future problems because storage owners like him are being put “at an unfair economic disadvantage.”

“We appreciate your budget challenges, but we don’t want to have it all on our backs,” Oldright said.

Council member Hoang Tran suggested reducing city expenditures rather than increasing revenue.

“Why don’t we invest in technology so we can reduce human capital?” he said.

Tran said, for example, the city could invest in riding lawn mowers to potentially reduce the number of full-time employees needed to maintain the park.

Council member Dini Duclos said the city has a revenue problem and needs to consider bringing in more business to create revenue.

“We need to look at attracting new businesses or whatever we can do to bring B&O (business and occupation) and other taxes in here,” she said.

Dana Hollaway, a Federal Way resident, said she is concerned about the impact low-income properties have on the city’s budget.

“I wish we would not allow anymore low-income properties until we fix our budget,” Hollaway said.

Projects approved under a multifamily tax exemption program are exempt from property taxes for up to 12 years, according to mrsc.org. However, land and nonresidential improvements are nonexempt.

Federal Way’s Finance Director Ade Ariwoola discussed challenges the city could face during the 2019-20 budget and revenue options to supplement those obstacles.

One of the largest challenges, he said, is hiring five additional police officers, costing a total of $500,000 annually.

The city received a COPS grant to cover about 60 percent of the new officers’ salaries for five years, costing the city about $200,000 a year. By 2022, the city needs to be prepared to take over the full amount of the salaries, Ariwoola said.

“We need to find a sustainable revenue source because of some of these things coming down,” he said.

Another possible challenge facing the new budget is increased health care premiums for the city, Ariwoola said.

Other potential revenue sources discussed include a soda tax and revisiting a ban on retail marijuana businesses in the city. More information on these and other suggestions will be brought to the council in the future.

To increase revenue, the council has already approved removing a cap on admission taxes charged at entertainment venues in the city along with a 7.75-percent utility tax on water and sewer.

The city most likely will not see any revenue from the utility tax until 2019, Ariwoola said. Lakehaven Water and Sewer District has filed a lawsuit challenging the city’s authority to collect the tax.

Additional revenue sources are needed to help balance a potential $1 million budget deficit. That figure could be closer to $500,000 if the daily population at SCORE Jail, where Federal Way houses its inmates, stays the same, according to Mayor Jim Ferrell.

The City Council will approve the final budget in December, but the preliminary budget will be created and presented to the council on or before Oct. 1.

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