City Council Approves Property Tax Hike and Keeping Ambulance Fee for 2012

Mercer Island City Council moved to head off a projected shortfall in 2012 by approving several new taxes and fees Monday night — including an extension to a into the near future — to help maintain current services and pay for council priorities for the following year.

The City Council passed a budget last year that anticipated an estimated $400,000 shortfall in 2012, but unexpected state cuts pushed it to agree to remove a provision to end the ambulance fee next March and extend the fee's trial run, on a 4-3 vote, through the end of 2012.

Councilmembers El Jahncke, Mike Grady and Mike Cero were opposed.

"This is all about telling the truth. We should wait the full year and review the program thern, as we told the voter's we'd do then" Grady said. "But to take one data point and say this program is a success is the wrong approach — We don't know, because we haven't seen the final report."

City Hall had seemed flush just a month ago with cash savings of around $2 million from an under-budget infrastructure project. Council members jockeyed for position to spent it, earmarking the money for a new fire station on the south-end of the Island, a human resources audit and continuing the city's sustainability work, among other items. But a dire state budget proposal by Gov. Christine Gregoire that promises to slash local funding is creating unexpected turbulence for the city's biennial budget.

The fee was extended despite not delivering the level of revenues expected due to a lower-than-expected number of patients — $127,500 has been collected from 296 patients as of Sept. 30, 2011 — transported by the . The MIFD had expected to transport 365 patients and drawn in $165,000 in revenues at this point.

"Revenue projections have not met expectations," said Mercer Island Fire Chief Chris Tubbs. "But the vast majority of the firefighters I've interacted with like the program."

The $770 fee is assessed for all non-life threatening injury transports to area hospitals by the fire department's basic life support (BLS) aid cars.

A different mix of users than expected and not charging mileage or deductibles also reduced anticipated revenues, he said. Nonetheless, Tubbs said the fire department was still maintaining fast response times and felt they experienced little-to-no impact to their services.

The mileage and deductable could be added to the ambulance fee at a later date.

The council also approved on a 5-2 vote to raise property taxes 1 percent (Grady and Cero opposed) and separately approved an additional "banked" .5 percent imposed to contribute to the city's law enforcement and firefighter's pension plans (LEOFF 1). Jahncke, Cero and Grady opposed the increase in banked property tax. The total property tax hike is expected to bring in an addition $160,000 next year — or $17.73 from the average homeowner (for a home worth $950,000).

Councilman Bruce Bassett, citing an elevated 3.8 percent rate of inflation in the Puget Sound, said the property tax increase wasn't tied to inflation and was more like a tax cut rather than a tax hike.

"Over the arc of time, the one-percent cap on property tax forces a decline in our buying power as a city," Bassett said.

The additional ambulance fee and property taxes would bring at least an additional $300,000 in taxes and fees.