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Lessons Learned from Two Successful Levy Lid Lifts

By Tracey Dunlap, Director of Finance & Administration, City of Kirkland

The City of Kirkland was fortunate to have two levy lid lift measures pass on the November 2012 General Election Ballot:

  • Proposition 1 - Levy for City Street Maintenance and Pedestrian Safety (referred to as the “Streets measure” below), and
  • Proposition 2 - Levy for City Parks Maintenance, Restoration, and Enhancement (referred to as the “Parks measure” below).

The city has received a number of questions about how we approached these measures and what may have contributed to their success. This article is intended to respond to that interest and provide links to some useful resources. Remember that this is the Finance Director's perspective - there were a wide range of factors that contributed to passing the levy lid lifts. It truly took a village to make the process successful!

The Measures

The two ballot measures came about through two separate processes. The streets measure was initiated internally through discussions of the slow decline in the city's pavement condition index (PCI) and the impacts of budget cuts on transportation programs during the Great Recession. A transportation benefit district (TBD) was under consideration, however, in order to make a dent in the street maintenance backlog, a vote to charge in excess of $20 per vehicle would have been required. Rather than pursue a TBD, which taxes vehicles of residents only, the council determined that a property tax increase that would impact both residential and commercial sectors was a more equitable approach. The streets measure was a permanent levy lid lift of $0.204 per $1,000 of assessed valuation and it is expected to generate about $3 million per year with 90 percent spent on street overlay, 5 percent spent on pedestrian safety, and 5 percent spent on safe routes to schools. The annual impact on a median household valued at $346,000 is $70.58.

The parks measure was initiated by a group of citizens concerned that the significant budget reductions to the parks & community services budget necessitated by the economic downturn, including a 20% reduction in parks maintenance staffing, would jeopardize Kirkland's renowned parks system and the attendant quality of life it provides. In response to the citizens' request, the city council convened the park funding exploratory committee (PFEC) comprised of about fifty stakeholders throughout the community. The PFEC met nine times during a six month period to reach a recommendation on what should be funded by the levy and the structure the levy lid lift should take. The parks measure was a permanent levy lid lift of $0.16 per $1,000 of assessed valuation and is expected to generate about $2.4 million per year, with roughly half of the funds used for operations and maintenance and the remainder available for pay-as-you-go capital, initially invested in a specific list of projects. The annual impact on a median household is $55.36.

Links to the informational pieces that the city prepared for each proposition are included at the end of the article.

The Structure

The first decision the city needed to make was whether to pursue a single year (also referred to by some as “original flavor”), a multiyear levy lid lift, or an excess levy.

In brief, a single year or “original flavor” levy lid lift (RCW 84.55.050(1)) can be for any purpose and can be for any period of time or permanent. If proceeds are used for debt service on bonds, the maximum period is nine years. The initial “lift” occurs in the first year, with annual increases in subsequent years limited to the lesser of one percent or the implicit price deflator (IPD). This option requires a simple majority vote on any election date.

For a multiyear levy lid lift (RCW 84.55.050(2)), the purpose must be stated in ballot measure title. The lid can increase each year for up to six years. After the first year, the lift can increase by a percentage specified for each year. If the final year is designated on the ballot as the base amount after six years, the increase is limited to the lesser of one percent or the IPD thereafter. The lift can be for any period of time or permanent, unless proceeds are used for debt service on bonds, in which case the maximum period is nine years. New funds raised cannot supplant existing funds and a simple majority vote is required at a primary or general election.

An excess levy (Article VII, section 2(b) of the Washington State Constitution) is available for capital purposes and the term is determined by the life of the proposed bonds. An excess levy requires a supermajority (60% approval) plus minimum 40% turnout based on last general election (validation). The election can occur on any election date.

The city also evaluated a metropolitan parks district (MPD) (RCW 35.61), but that is a whole topic unto itself and was not pursued. The options evaluated are summarized in the table below.

Levy Lid Lift Table

If you are thoroughly confused, I don't blame you! There are excellent resources to help you understand the choices. A few that we used extensively were published by MRSC and the Association of Washington Cities (AWC) and the links are provided at the end of the article.

Kirkland chose to pursue single year (or “original flavor”) levy lid lifts for some very specific reasons, including:

  • The streets and parks needs were both operating and capital in nature, so an excess levy would only meet part of the need and the non-supplanting provisions of the multiyear lift were inconsistent with the city's desire to establish a permanent funding source for some existing programs.
  • Since the defined needs included both operating and capital expenses, the city chose to fund the capital elements on a “pay-as-you-go” basis to avoid the nine-year debt limitation.
  • Given that many of the needs to be met were on-going in nature, such as parks operations and maintenance and street overlay, the choice was made to pursue a permanent levy lid lift rather than requiring reauthorization after a limited time. The city struggled with this decision and anecdotal feedback we have received suggests that the measures may have passed by even larger margins had they been time limited.
  • The simple majority (50%+1) appeared to be reasonable to achieve given the level of support indicated by the public and the city's large annexation vote in 2011 (that was approved by 59.9% of the annexation area). The streets measure passed with 54.8% of the vote and the parks measure passed with 57.9%.

The choice will be different depending on each agency's unique needs and situation.

Key Success Factors

The choice of the capital projects and operations and maintenance activities was one key to the success of the votes. In terms of the streets measure, the city's biennial citizen survey had indicated that an area of high importance to citizens where the city could improve upon its performance was the “street maintenance” category. There were also concerns about pedestrian safety and schools walk routes. For the parks measure, the levy lid lift helped to restore reductions that had jeopardized the park system, such as lower levels of maintenance, and enhanced activities popular with the community like beach lifeguards. In terms of the parks capital projects, they were geographically diverse and selected to appeal to a broad spectrum of the community.

The involvement of the community was another key. Many members of the park funding exploratory committee became active members of the Yes! for Great Kirkland Parks citizen advocate group. They raised funds and campaigned in support of the measure. For the streets measure, city council members, as private citizens, spoke in support of the measure to a variety of neighborhood and business groups.

Strong communications was another focus of the effort. City staff was available to provide informational presentations to a variety of community groups. A number of existing tools that the city had created for other purposes helped to educate the public. For example, the city had embarked on a series of KirklandWorks videos to educate the public on city services. Links to those videos and other materials can be found at the end of the article. It is important to remember that no city resources can be used to campaign in support of ballot measures. All information must be factual and should be reviewed by the public disclosure commission if there is any doubt (links to those guidelines are below as well).

Another aspect of the messaging focused on affordability. As part of the 2013-2014 budget process, the City of Kirkland incorporated the “price of government” concept described in the book The Price of Government by David Osborne & Peter Hutchinson. The City of Redmond has successfully used this measure for several years to provide context for evaluating how much the community pays for service from the city. The measure divides total city revenues by the aggregate personal income of the community and a percentage in the 5 to 6% range is typical for local governments. The City of Kirkland's price of government increased from approximately 3% to 3.2% with the addition of the levies, which may have contributed to the willingness of the voters to invest more in city services.

The important role of our bond counsel, Cynthia Weed at K&L Gates, cannot be emphasized enough. She helped us navigate through the intricacies of the various options and was indispensable in helping us fit everything we wanted to say within 75 words for each proposition.

A few other factors that helped were that the city regularly surveys its citizens and has a good idea of where their priorities lie and what things need to be improved. I also like to think that the success is a sign that the citizens trust us to be good stewards of their tax dollars. In order to retain that trust, the city council emphasized the need to demonstrate accountability by providing regular progress reports to the community about the status of projects.

Kirkland is fortunate to have a supportive electorate. Now the challenge is to ensure that the community sees that the things they voted for are getting done and getting done well!

Helpful Links

City Links

Statute Links

Reference Material Links

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Photo of Tracey Dunlap

About Tracey Dunlap

Tracey Dunlap writes for MRSC as a gurst author.

Tracey Dunlap, P.E. is Deputy City Manager at the City of Kirkland and served as Kirklandā€™s Director of Finance & Administration from 2006 through 2014. Prior to joining Kirkland, she was a principal and shareholder in FCS Group, a regional financial and management consulting firm (14 years). An industrial engineer registered in the state of Washington, she has worked with jurisdictions throughout the Northwest to develop and implement cost recovery and fee strategies, set utility rates, and improve organizational efficiency and effectiveness. Tracey's experience also includes working for a large defense contractor (5 years) and a major financial institution (3 years). She has presented on a wide array of topics for organizations including WFOA, APWA, APA, WABO, and AWC.

The views expressed in guest author columns represent the opinions of the author and do not necessarily reflect those of MRSC.