CONNELL -- Connell officials are on the hunt for more revenue to avoid service cuts.
The city council unanimously approved collecting the second 0.25 percent portion of the real estate excise tax last week.
And it plans to consider asking voters to approve a property tax levy lid lift for the first time in city history.
Connell has reached the point where either the city needs to find more revenue or slash services, said City Administrator Steve Taylor.
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Even with cuts made in the 2011 budget, the city still expects to have to use reserves to fill the gap between its expenses and revenues this year, he said.
Connell has been trying to find a way to pay for parks and streets operations and maintenance without using general tax dollars. Neither has a dedicated funding source, Taylor said.
The council is discussing asking for a property tax levy lid lift specifically to pay for parks and recreation, he said.
That money could go to operate and maintain parks or pay for parks projects in the city's capital improvement plan, he said. Possible projects include adding playground equipment, replacing the blue slide at the city pool, building a spray park and adding to the city skate park.
Taylor said the city is considering asking voters to approve a higher property tax levy rate that would increase total revenue the city could collect beyond the allowed 1 percent increase and revenue generated by new construction. If approved, the increased amount would become the base for future years.
Connell's property tax levy is $2.52 per $1,000 of assessed value, and city property is valued at $135 million. Taylor said the city could ask voters to raise the levy by 58 cents to the $3.10 maximum, or it could ask for a smaller increase.
Connell expects to receive $330,000 in property tax this year. Should voters OK a levy lid lift to the $3.10 maximum, Taylor said the city would be able to collect $78,500 more in 2012.
The council would have to approve a ballot measure by its May 16 meeting to meet deadlines for the August primary. The council plans to hold a public hearing first, before making any decisions on asking voters to raise the levy, Taylor said.
The additional real estate excise tax also could help fund some of the parks and recreation costs and street projects.
The city normally can use the real estate excise tax only for projects on the city's capital improvement plan, Taylor said.
But some of the money could become available for operation and maintenance costs for streets, parks and existing capital facilities until 2016 if Gov. Chris Gregoire signs a bill that give the city more flexibility in using the money. The bill has passed in the House and Senate but still needs Gregoire's signature.
Connell receives $10,000 yearly from the first 0.25 percent of real estate excise tax and expects to receive $10,000 more from the second 0.25 percent. Taylor said the city has saved more than $100,000 of real estate excise tax.