City council reviews proposed changes to municipal fees; discusses utility bill repayment program

The Mountlake Terrace City Council meets via Zoom at its Dec. 2 work/study session.

The Mountlake Terrace City Council discussed various municipal fees and schedules during its Dec. 2 work/study session.

The council reviewed a water service installation fee ordinance recommended by staff that would convert the installation of water meters to a flat fee. The city is authorized, as the operator of a public water system, to collect a fee to recover its costs for installing water meters. Municipal code currently requires those wanting a water meter to first make a deposit toward the estimated cost. That estimate is based on the costs of materials, labor and equipment. Any difference between the deposit and the actual cost of installation is then either refunded to the customer or an additional fee is charged by the city before it issues any occupancy permits.

Converting to a flat fee would save on administrative costs for installing water meters based on the additional time currently associated with processing either a refund or an additional charge. If adopted, the fee would then be based on recapturing the actual cost of the water meter along with a labor cost related to the average amount of time needed to install a meter.

City Engineer Jesse Birchman said installation typically takes about one hour and the proposed code change would provide the city with greater flexibility to modify the basis for the water meter installation fee. However, depending on any separately adopted fees, individual water customers might possibly end up paying either more or less than the actual costs of water meter installation.

The proposed ordinance would update the city code to eliminate the time-and-materials fee with the associated upfront deposit. Moving forward, it would also allow the city council to maintain oversight of fees and set the cost of installation in the annual fee resolution rather than through future municipal code updates. Adoption of the water service installation fee ordinance is on the consent calendar for the council’s Dec. 6 regular business meeting.

The council also reviewed proposed changes to the 2022 fee schedules for development services, which include the review, permitting and inspection of land use and construction. The current development and permit fee schedules for building/fire and civil/land use were adopted in a 2020 resolution that included provisions to adjust the fee schedules annually based on the Seattle consumer price index through 2023.

The current fee schedule uses three general approaches to determine the permit fee. These include published valuation tables, fixed cost fees and cost for service fees. The intent of adopted fees is to cover the service costs for most types of approvals and permits. Some fees are reduced for homeowners with “mom-and-pop” development activities where it is deemed better to have oversight of activity rather than cost recovery.

According to the city, the objective of the fee schedule is to meet the cost recovery goal the city council has adopted for the development services portion of the Community and Economic Development Department, provide greater equity in permit fees primarily for homeowners to ensure the work meets health and safety standards, and also to make sure the schedule is in line with industry standards.

City staff changes proposed for the 2022 fee schedules include:

– An increase in the hourly rate to $155 per hour in order to account for anticipated cost-of-living adjustments, while also remaining aligned with neighboring jurisdictions.

– Adjusting some fees to more accurately reflect the actual staff time required for processing, such as a decrease in administrative time needed for some permits with electronic permit submittal.

– Removing the current requirement of a deposit for water meter installation and instead using a flat fee, which is intended to reduce the time and costs associated with administration and permit submission.

– Altering electrical permitting fees so they are based on the number of inspections required, lowering the cost of minor electrical permits and decreasing the administrative staff time associated with the automatic issuance of some permits through the city’s electronic permit system.

Staff said the recommended actions would allow the city’s development services department to improve its cost-recovery model for services provided while also taking into consideration the economic climate, complexity of individual activities and fees charged by neighboring jurisdictions. It also continues to reflect the council’s interest in subsidizing the costs of some minor permits for do-it-yourself property owners.

Two fee resolutions have been drafted, one for building/fire and one for civil/land use to reflect the recommended changes. The proposed resolutions also contain an adjustment clause authorizing the rates to be automatically changed, based on the consumer price index, in 2023 and 2024. Adoption of the resolutions is on the city council’s Dec. 6 meeting consent calendar.

The council also discussed the city’s utility bill repayment program. Washington law controls how public utilities, such as the city’s water, sewer and stormwater services, can collect customers’ unpaid bills. Under state law, the city can place a lien on a customer’s property for unpaid sewer and stormwater bills. That lien can then be increased if the amount of the unpaid bills continues to grow over time.

However, for publicly owned water and electric utilities, the amount of an unpaid bill is capped at four months of service. The limitation’s rationale is that water and electric services, unlike sewer and stormwater, can be shut off in order to motivate payment.

Early in the COVID-19 pandemic, the number of unpaid utility bills grew at a rapid rate as unemployment levels rose and household incomes shrank. The state recognized that utilities faced with the four-month limitation on collecting unpaid water bills were approaching a point of having to shut off a large number of customers in order to get payment. Waiving the past-due amounts would run contrary to the state constitution’s prohibition of gifting of public funds.

Gov. Jay Inslee and the state’s legislative leaders adopted a moratorium in April 2020 that prohibited public utilities from shutting off water, electricity and telephone services for nonpayment, and also suspended late fees. The moratorium, which remained in effect until Sept. 30, 2021, was meant to ensure that water, electricity and other essential public health and welfare services continued to be available.

To address public utilities’ having accrued up to 19 months of unpaid bills during the moratorium, along with the ability to collect only four months in arrearages, the Washington State Legislature passed House Bill 1069 (HB 1069) this year, which modifies the process for collecting water bills following an emergency such as the pandemic.

As a result, the city may collect on the full amount of unpaid utilities, but it must implement a repayment program that allows customers at least six months to repay the amount past due. The city may put a lien on the property for the unpaid amount if the utility customer either doesn’t sign up for the repayment program within three months of the emergency ending, or the customer does not abide by the terms of the agreed-upon repayment plan over a three-month period.

Mountlake Terrace currently has approximately 640 utility accounts in arrears, with an average past-due amount of $1,600. The total amount of the city’s financial liability in the utilities is approximately $1 million. By implementing a repayment program under HB 1069, the city will be able to collect, either through repayment or lien, the unpaid utility bills accrued during the moratorium.

City staff recommended an 18-month repayment program, which would closely mirror the time period of the unpaid bills. City Manager Scott Hugill said that expecting utility customers to repay up to 19 months of unpaid bills over only a six-month period, while also staying current on their future bills, would be difficult. If the repayment program outlined in HB 1069 is not implemented, the city would only be able to collect four months of past-due fees.

Councilmembers unanimously supported the proposed 18-month repayment program. The city has already started the process of reaching out to utility customers in arrears about a repayment program and will continue to do so in the coming weeks. The council will vote Monday night on approving the extended repayment program. It will also explore, in future discussions, options for using a portion of the city’s American Rescue Plan Act (ARPA) funds to provide financial assistance to utility customers who may continue to be unable to pay their past-due amounts.

In other business, Hugill recommended a 3.5% salary adjustment for non-represented employees in 2022. That represents a 2% increase for next year, along with a 1% increase that the council previously discussed adopting this fall for non-union employees as a “catch-up” to the unions’ 2.75% salary adjustment for this year. There is also an additional 0.5% increase to reflect the gap in implementing the proposed increase from earlier this year.

Historically, the council has considered the wage adjustments in the city’s two collective bargaining agreements, changes in the consumer price index for the Seattle-Tacoma-Bellevue metropolitan area, pay ranges found in similar-sized cities and any other comparability factors presented by the broader marketplace when setting the city’s wages and salary ranges for its non-union employees.

The recommendation is intended to keep the city competitive in the hiring market and the net budgetary effect of a 3.5% cost of living adjustment for non-represented employees would be approximately $310,000. “We can afford it, it’s in the financial forecast,” Hugill noted.

The council will vote Monday night on adopting an ordinance amending the 2022 budget to include the increased salary schedule.

Assistant City Manager Stephen Clifton briefed the council on a proposed amendment to the professional services agreement with ARC Architects, Inc. for work at the Civic Campus. The city found there are some acoustical concerns to address. Voices and sounds reverberate to the point that it is difficult to hear what is being said and/or presented in the police station’s training room and also in City Hall’s Lake Ballinger meeting room and the north end of the lobby.

The amendment would authorize $2,934 in additional funding to cover contracting, coordination and sub-consultant fees for services. ARC has already performed and provided these services to avoid further delay in the project’s completion. The additional acoustic features were previously excluded from the project’s original scope for budgetary purposes.

Also Thursday night, the council continued its previous discussions about making revisions to city code regarding the code enforcement process. Staff has proposed modifying the code to establish one enforcement process applicable to all nuisances. A variety of nuisances are currently addressed by different enforcement processes throughout several chapters of the municipal code. That can lead to uncertainty in the application of enforcement as well as potential outcomes.

The proposed code enforcement process would provide ample notice to the person(s) responsible for the violation and multiple opportunities for correction. This would then provide the city with flexibility in allowing for the person responsible to achieve code compliance. The intent of the new process is to be consistent across city departments throughout the municipal code, whereas a violation of any chapter of the code would use the same process and also provide residents with clarity and consistency in implementing code enforcement.

Under the new process proposed, once the city receives notice of a code or permitting violation, it would inspect the property and document any violations. The city would then send a letter to the person(s) responsible advising them of the violation, and provide a timeline for correction. The property would be reinspected after the date of correction has expired and any ongoing violations would be documented.

At that time, if the conditions have not been corrected, the city would again contact the individual(s) to offer a voluntary compliance agreement and a timeline for response. It would then reinspect the property after the deadline to enter such an agreement has expired, and note any current violations.

If the conditions previously identified have not been corrected and those responsible don’t enter a voluntary compliance agreement, then the city would serve them with a notice of civil violation that includes a timeline for correcting violations and information regarding an appeal to the hearing examiner within 15 days. It will also warn of daily penalties that may start to accrue if the violations are not corrected within the timeline provided.

The maximum daily penalty and the default amount proposed would be $100 for the first violation and $200 for a second violation of the same nature or a continuing violation past a deadline set by a notice of violation — not including fees, costs, and assessments. However, the city may waive the monetary penalty if corrective action is completed by the date specified in the notice of civil violation or a voluntary correction agreement. It also has the discretion to impose daily penalties in lower amounts.

If conditions are not corrected and the civil violation notice is not appealed, the city would proceed to superior court in order to obtain a warrant of abatement allowing it to enter and abate the property as well as recuperate any costs and penalties incurred. It would then abate the property’s existing nuisances and violations and also file a judgment against the person(s) responsible as well as a lien on the property for the cost of the abatement efforts.

The proposed code would allow for different timelines depending on the complexity of the situation. The city would also have the authority to grant extensions or allow flexibility where staff observes a good-faith effort on the part of the responsible individual(s) to comply.

It also includes a chapter pertaining to “chronic nuisance” properties that have both nuisance violations and are a hub for criminal activity. The code would provide for initial notice to the owner, an opportunity to voluntarily abate the property and court action for non-compliance. The court may then consider remedies, including a daily penalty of $100, abatement by the city, or order closure of the property for up to one year.

Councilmembers generally said they liked the provisions in the proposed code, which they felt could help to encourage compliance and give the city more options for working with people in order to address and fix code violations rather than focusing on levying jail time or large prohibitive fines. Council discussions about the code enforcement revisions will continue early next year.

The city council will hold its next regular business meeting Monday, Dec. 6 at 7 p.m. It will include Economic Alliance Snohomish County’s annual report. See the agenda and information for watching/participating online here.

— By Nathan Blackwell

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