Among the items presented at the Thursday, Nov. 2, Mountlake Terrace City Council meeting was a review of the potential financial impacts of increasing staff salaries.
City of Mountlake Terrace Deputy City Manager Carolyn Hope and Finance Director Janella Lewis presented possible implementation strategies for proposed pay and benefit adjustments based on the city’s 2023 salary survey of market averages.
Staff is recommending that council adopt a revised salary schedule that uses a seven-step system with 3.5% increments and a projected 3% cost-of-living adjustment (COLA) each year. This would result in an approximately 17.5% increase in salaries and benefits for non-represented staff in the first year of implementation and 3% to 5.3% per year thereafter to account for COLAs and step increases. According to staff, this change addresses the fact that the city didn’t evaluate market conditions for more than 15 years and didn’t keep COLAs more consistent with inflation.
In 2024, the dependent match for medical benefits would increase from 80% to 90%, which is a cost of approximately $30,300.
Staff is recommending the city implement salary and benefit adjustments no later than the start of 2024, as staff have been awaiting action on a salary survey for more than a year. To address the financial impacts to the city, Hope told the council that three options were considered to bring staff closer to the market average.
One strategy would bring positions farthest from the average to within 5% of the market. However, Hope said this option would still present a challenge in attracting employees from competing employers.
Another option would be to provide a smaller wage increase and switch employees to a 32-hour work week. Hope explained there are downsides to this approach: There is a considerable amount of work conducted during a 40-hour week, and employees currently work a significant amount of overtime.
“This will be a challenge to implement with all work groups, especially those that cover around-the-clock and seven-day-a-week coverage,” Hope said.
She added that this strategy does not solve the salary problem for employees, and many would seek second jobs during their time off. San Juan County, which implemented this model, has had problems with it, she said.
The third option would be to reduce city services, which could in turn reduce the need for additional staffing. Hope said considerable financial analysis is required to evaluate specific options, such as outsourcing or bringing services now being done by consultants in-house.
According to Lewis, revenue options for cities are typically limited to property taxes, business and occupation taxes, utility taxes and sales taxes. Other options include regulatory requirements or incentives and council-approved revenue options, such as a property-tax increase.
The city may also change regulations and strategies with regulatory requirements or incentives to allow or encourage more revenue options from gambling and hotels.
“At this time, the most viable option is a councilmanic action to increase the general levy rate by adding the 1% inflationary rate allowed by the state and/or seeking the highest lawful levy based on the city’s total assessed value,” Lewis said.
The highest lawful levy is the most a district can levy for a particular year, and the actual levy is what a district does levy for that year.
State law limits cities to a 1% property tax increase per year, and these don’t keep pace with inflation. She explained that the reasons for considering a levy rate increase include the depreciation of the rate over time, the salary adjustments for non-represented staff and the future union contract increases, and the need to maintain service levels over the next few years.
“Another way to look at the data is to compare the highest lawful levy, which is based on the total assessed value, to the actual levy amount,” Lewis said. “In this evaluation, the levy collections are lower than the assessed value and highest lawful levy over the last couple of years.
She added that inflation is typically higher than 1%, and it is difficult to synchronize revenues with inflation.
The next step is for staff to prepare a property-tax increase proposal for the city council to consider.
During Thursday’s meeting, the city council also unanimously passed a proposal to vacate 236th Street Southwest. Although this agreement means that the City of Mountlake Terrace will vacate and sell the proposed land, it has not yet agreed on a price or conditions of release.
While a public hearing was scheduled on the street vacation, no one signed up to speak in person and no letters of comment were submitted to the council.
In other business Thursday, Mountlake Terrace Police Chief Pete Caw, Commander Scott King and Commander Mike Haynes gave the department’s third-quarter report.
“The city and the region have continued to experience a dramatic increase in vehicle theft and a significant increase in property crimes such as burglary and theft,” Caw said. “Fortunately, the city has not seen similar increases in violent crime during this period.”
The presentation showed drone deployments, training, records, code enforcement and community outreach statistics. It also featured a case study outlining the police response and investigation of an incident during the Tour De Terrace festival.
Chief Caw said that recruiting efforts to fill open officer positions are ongoing, and a candidate is currently in police training.
The next city council meeting is scheduled for Thursday, Nov. 9.
The meeting will begin at 7 p.m. in Mountlake Terrace City Hall, 23204 58th Ave. W., Mountlake Terrace. To attend the meeting online, visit zoom.us/join and enter meeting ID 889 2199 7573 and passcode 98043.
To listen via telephone, call 1-253-215-8782 and enter the same meeting ID and passcode.
You also can view livestreamed meetings and past video recordings at www.youtube.com/cityofmlt.
You can see the complete agenda here.
— By Rick Sinnett