WALLA WALLA -- In spite of impending cuts in state revenue and the loss of a nearly $200,000 reimbursement from the Rural Library District, the City Council approved only a small increase in property taxes in 2012.
At a special meeting Monday night, the Council voted to raise taxes only by 0.44 percent, the amount related to new construction and property improvements. The hike will net the city an additional $32,079 next year. The city's total property tax levy for next year is projected to be $4,758,418.
At a Nov. 16 meeting, Council members asked staff to consider using banked levy capacity -- allowed tax increases from previous years that were never taken -- to make up a $280,000 shortfall in the 2012 budget.
Staff recommended against using banked levy or even taking the authorized 1 percent increase allowed for next year.
Instead, City Manager Nabiel Shawa said the city would either use reserve funds or layoffs if sales tax revenue didn't come in as expected.
Adding fuel to the debate between Council and staff was the issue of an underfunded city library, which is the result of a breakdown in contract negotiations with the Walla Walla County Rural Library District. Those negotiations now appear to have a glimmer of hope, however.
Next week, the Rural Library District's board members will vote on a contract that would provide the city with a $245,000 payment for 2012 as a reimbursement for providing services to county residents.
Council approved the property tax plan 6-1, with Council member Shane Laib opposed.
Laib argued the 1 percent increase and banked levy might still be needed if negotiations break down again between the city and the Rural Library District.
Since 2008, officials have argued over how much the district should pay the city, which each side feeling the amount is unfair, resulting in contracts being approved close to or past deadlines.
"I think we are wising upon a star if we think we are not going to continue this fire drill over and over again," Laib said.
The majority of Council members were pleased with the reworked figures and staff's ability to increase the reserve fund to 9.2 percent next year.
"I am comfortable that you and your staff have looked this over ... I want to commend you for going back and doing this work. I appreciate it. I will support it," Council member Dominick Elia said, who two weeks earlier was one of the harshest critics of the unbalanced budget present by City Manager Nabiel Shawa.
The reworked numbers did bring up a few issues with Council members.
A plan to move $77,000 in street funding to the city's general fund resulted in Council members directing staff to leave the money where it is.
"We are pulling $77,000 out of that. You say our fund is adequate. I don't think our street fund is adequate," Council member Jerry Cummins said.
Another issue brought up by the Council was the "sweeping" of left over Downtown LID funds into the general budget, a move that was legally supported by City Attorney Tim Donaldson and ethically challenged by Elia.
"What I am concerned about is people paid this. I paid part of this as part of the Downtown LID ... and now we are done with this and now we are going to keep the extra? ... In essence they have overpaid those LIDs, and we are going to say thank you very much, and we are going to take them for the general fund," Elia said.
Also under scrutiny was $15,000 of IRRP funds provided to Commitment To Community in the proposed budget. Previously, those funds had been allocated from the general fund.
Shawa justified IRRP money to fund the nonprofit because Commitment To Community will take on community outreach for the city in the Edith and Carrie avenues neighborhood, where the city's largest IRRP project will take place next year.
"We believe that this will both improve our outreach efforts in the neighborhoods ... and allow the engineers to keep their focus," Shawa said.
The Council took no action on the proposed LID and IRRP moves at Monday's meeting, which drew about 30 residents. The majority were there to show support for library funding, but several commented they wanted no increases to their property taxes.
Monday's vote was to determine the property tax levy rate for next year. Council is expected to review and vote on the city's budget in December.
Alfred Diaz can be reached at email@example.com or 526-8325.