Thursday, November 14, 2013

City EIT Rate Hike Passes, Rental License Fee Increase Fails

By Christina Georgiou

A 0.2 percent increase in Easton Earned Income Tax (EIT) was passed unanimously by city council members Wednesday evening, raising the rate to 1.95 percent for residents. The EIT rate paid by those who work in Easton but do not reside in the city will remain at the current 1.75 percent rate.

A last-minute attempt to fill a $110,000 hole in the city's 2014 budget proposal by increasing the city's residential licensing fee by $25 per unit annually failed to get city council members' approval.

The shortfall cropped up after the council rejected a provision during a budget hearing Tuesday night that would have raised rates in the city's South Third Street parking garage from $2 to $3 per hour during summer months.

City Administrator Glenn Steckman suggested at Wednesday's meeting the hole could be filled by raising the residential licensing fee to $80 per rental unit, up from the current $55 rate.

The 2014 budget proposal calls for a $5 increase in the fee to $60, which the council said it agreed with, but members balked at the sharper rate increase.

"I just think it needs a lot more thought," said Mayor Sal Panto, who attended the meeting by phone. Panto is in Seattle, WA at the National League of Cities' annual conference.

Steckman said the increase would support more vigorous code enforcement and rental unit inspections.

"Although I support (that), and I want to support it, I think it will take months to implement it," Panto said. "So I have some reservations about putting this in place in 24 hours, but I do support the intent."

The city plans to hire one additional code enforcement officer next year to help with rental unit inspections. The budget proposal calls for the new position to be filled in April, but city officials said Tuesday evening that might be pushed back until June to help cover the shortfall after the parking rate increase failed to gain traction.

Easton Council member El Warner said the new proposed rate increase was too steep.

"We're talking about making this cost $80, a $25 increase," she said. "I'm just not ready to do this on 24 hours notice."

Steckman said raising the fee more than the budget originally called for would help the city recoup costs associated with city rental unit inspections and code enforcement, noting that Councilman Roger Ruggles had said he wished the fee was reflective of the expenses to the city to do so.

"What this gives to me is a vision for the future of where this may go. may not be this, and this may not be where we go," Ruggles said.

"I think it may be what we all want to do, but not at this time," Vice-mayor Ken Brown said.

Panto suggested that "baby steps" towards a higher fee might be taken along with better enforcement through coordinating city departments to make sure rental units comply with health and safety ordinances.

Technology upgrades, which the city is working on implementing soon, would allow police to better communicate with the codes and health departments after situations such as drug raids, he suggested.

Steckman seemed frustrated the suggestion was rejected.

"I've done this in other communities," he said, adding that such rate hikes are "aimed at increasing rental property values."

The city administrator then suggested that city council could opt to leave the $110,000 shortfall in the proposed $32 million budget for now, and approve it as it stands at the next regular city council meeting. The administration would then further work on ways to eliminate it in the first quarter of 2014, in January.

He also suggested city council might reconsider the parking deck rate hike, saying that traffic in the municipal garage is mostly monthly pass holders during the week, and city visitors on weekends.

Panto said he favors finding other ways to cover the shortfall in January.

"I'm not on board with the increase Monday to Friday," he said.

The mayor suggested the bulk of the $110,000 could be made up through the elimination of a "long empty" city position through attrition.

"I'm not talking about a person, I'm talking about a position," he added.

City Finance Director Chris Heagele said he'll be working immediately to identify other places the shortfall might be made up, noting that eliminating the vacant position is a good place to start. With salary and benefits being the majority of the amount, he said it may be possible for him to identify other small cuts to cover the rest of the amount.

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