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2006 - Legislative AgendaAs adopted by the Federal Way City Council November 15, 2005 CITY OF ,A�L Federal Way CITY OF FEDERAL WAY 2006 LEGISLATIVE AGENDA FEDERAL WAY CITY COUNCIL Dean McColgan, Mayor Linda Kochmar, Deputy Mayor Jeanne Burbidge Jack Dovey Eric Faison Jim Ferrell Michael Park FEDERAL WAY CITY ADMINISTRATION David Moseley, City Manager Derek Matheson, Assistant City Manager (Legislative Relations) City of Federal Way 2006 Legislative Agenda About this Document The City of Federal Way's 2006 Legislative Agenda is organized as follows: • The Legislative Agenda reflects the City's position on matters expected to arise either as legislation or through the state budget process, or both. Each major area of the Legislative Agenda first lists local government financing, tax/revenue, and transportation issues, with remaining issues categorized in alphabetical order. The 2006 Agenda helps note the City's level of involvement in an issue by listing it as: "Active" — meaning the City, as an individual entity, plans to actively involve itself in advocating for or against a given legislative/budget provision; "Support'— meaning the City has a great deal of interest in a given legislative/budget provision, but is more likely to support an advocacy or opposition effort than to lead it; • The Federal Issues portion of this document reflects the City's position and interest on several issues that directly impact local government funding and capacity to provide general services, maintain adequate tax revenues, address transportation, deal with `core services, such as law enforcement and parks, and do its part on the critical issue of homeland defense. Note To Readers: The City of Federal also maintains a listing of city policies that guide its approach to a broad array of legislative and policy matters. Any legislators, legislative staff, state officials, stakeholders or Federal Way citizens who would like a copy of these policies should call Derek Matheson, Assistant City Manager, at (253) 835-2411. 2 City of Federal WaV 2006 Legislative Agenda Active Items for 2006 Financing Issues • Avoid Unfunded and Inadequately Funded Mandates In keeping with its policy of vocally opposing mandates that are unfunded or inadequately funded, the City of Federal Way will actively oppose bills and budget initiatives that contain unfunded mandates. In accordance with Initiatives 62 and 601, legislators, state agencies, and courts should refrain from imposing new mandates on local governments without the necessary funding to go with them. Federal Way strongly urges legislators to refrain from imposing unfunded mandates, to ask if pending bills and budget matters contain unfunded mandates, and to seek full funding for local governments if mandates are considered a necessity for policy reasons. Specific "unfunded mandate" items the City will be prepared to oppose, absent necessary funding, include Growth Management Act (GMA) measures, tax policy and pension issues, and others which impose new responsibilities on local government. Guard Against Tax -relief and Tax -exemption Measures That Erode Local Government Revenues Despite the budget pressures facing our state, the 2005 Legislature received scores of requests for new tax relief or tax exemptions, as advocates of tax exemptions on business and property tax relief, etc., brought their cases to Olympia. The Legislature is to be commended for showing restraint in the areas of tax relief and tax exemption. The City of Federal Way urges the Legislature to avoid worsening the budget and fiscal landscape for local governments by passing ill-advised measures that erode local revenues through tax exemptions or tax relief. Sales Tax Streamlining The State Legislature enacted SB 5783 in 2003, legislation that largely brings Washington into compliance with a "Streamlined Sales Tax Agreement' (SSTA) project under development in a few dozen states. The SST effort involves unifying sales tax definitions and practices, in hopes that Congress will explicitly authorize that sales tax be imposed on Internet -based transactions currently receiving tax-free treatment. In advance of any Congressional action, 18 states have formed an SSTA Governing Board of members and associate members in October, and will be contracting with multi- state and multi -channel retailers to voluntarily remit sales taxes from internet-based transactions. Fiscal estimates show the State of Washington gaining $25 million to $32 million a year from these voluntarily compliance revenues, with estimates trending upward in future years. With the SSTA moving forward and a Governing Board forming, Federal Way has spearheaded a compromise among cities that are both positively and negatively impacted by local sales tax sourcing changes required under the SSTA. The compromise calls on the state to use its general fund to set up a dedicated fund for full mitigation of sourcing impacts, with voluntary compliance revenues expected to ensure the state recoups its mitigation investment. The mitigation would not be permanent, and cities will work to ensure that no mitigation funds come in the form of taking gains experienced by certain cities (such as Federal Way) under a new sourcing system. Cities also are acknowledging that, even with their agreement, the legislative process may lead to potential refinements of this approach. Onqoinq Revenue/Local Government Financina/Infrastructure Fundina/Annexation Financina Tools With the exception of the hardest-hit cities and counties, the 2005 Legislature continued the process of phasing out all post -Initiative 695 backfill funding appropriated to assist impacted cities and counties. Federal Way has already foregone the yearly $300,000 provided by the old sales tax equalization program. Additionally, the City has dealt with property tax revenue decreases brought on by voter - approved Initiative 747, used banked property taxing capacity to address law enforcement needs, and worked to move police personnel away from desks and onto streets during a post -9/11 era when citizens are demanding more safety and security. The City does not believe that local governments should have to address these issues alone and strongly believes the State of Washington has a long- term policy obligation to assist and partner with its cities Federal Way urges lawmakers to discuss new revenue needs for cities and counties in the 2006 Session. Specific efforts the City will actively support and participate in include: Legislation to afford cities and counties the option of a new 4/10th of 1 percent Real Estate Excise Tax (REET) for infrastructure needs. The City urges the Legislature to ensure that the first and second '/<% REET authority currently provided to cities, and any new REET authority, can be expended on a flexible menu of infrastructure needs. Legislation to provide new financing mechanisms for large-scale annexations In 2005, the Legislature came close to enacting 2SHB 1153 to provide a financing source for large annexations, but the bill stalled in the Senate and did not pass. In King County, officials would like to see approximately 200,000 residents of ten large unincorporated areas — including 20,000 east of Federal Way — annex into cities. However, cities would be taking on areas that are infrastructure deficient and where operating expenses dwarf expected operating revenues. In Federal Way's case, the Potential Annexation Areas would lead to an annual operating deficit of nearly $3.6 million per year and over $16 million in new capital costs. It will be very difficult for Federal Way and other cities to take on these large areas without direct funding or financing options. • No Pre-emption of Local Authority; Provide Flexibility to Local Governments As a wide-ranging staple of its 2006 Agenda, the City will emphasize the need for legislators to recognize local government "home rule" authority. Federal Way will urge legislators to refrain from legislation that would pre-empt local government authority, restrict the flexibility of local governments, or remove existing authority and revenue sources. Transportation State Highway System Proiects In 2005, the State Legislature enacted the Transportation Partnership Act, an $8.5 billion transportation investment package financed primarily through a 9'/2 cent increase in gas taxes (spread over four years), bonding of new gas tax revenues, and weight fees. In the event the state's voters pass Initiative 912 to repeal the new gas tax monies, the state would be without the revenue sources that financed several billion dollars worth of investment in state highway projects — including $100 million toward revamping the "Triangle" interchange of Interstate 5, Highway 18, and Highway 161. The City will urge Legislators to continue to make transportation investment a top priority, and is prepared to advance the following state highway system projects as most important to addressing traffic and safety issues in and through the City: - Interstate 5/State Route 18/State Route 161 "Triangle" Interchange - City Center Access Improvements north of 320th Street - State Route 509 — including "collector/distributor" lanes on 1-5 to 320th Street - Interstate 5/272nd Street Interchange and 272nd Street improvements • Local Funding & Local Options The 2005 Legislature's passage of a Transportation Partnership Act investment package included 112. cent in new direct -distribution gas tax revenues for cities and %2 cent for counties. This''/2 cent provides some new funding for Federal Way to address the upkeep and maintenance of its local roads and arterials (about $340,500 per year). Should voters pass 1-912, this new direct -distribution revenue source would be repealed. Additionally, the Transportation Parternship did not include any new local funding options for local transportation needs, which are critical. Over the last decade, local transportation revenues have declined sharply due to initiatives, court decisions, and the fact that existing gas tax revenues do not keep pace with inflation. During the 2006 session, Federal Way will actively advocate initiatives to augment local transportation funding and options. These options should include additional funds for the Transportation Improvement Board (TIB), which has been an excellent funding partner for local governments generally and Federal Way specifically over the last decade. • Regional Transportation Investment District (RTID) In 2005, the Legislature directed that the RTID should take a regional transportation financing initiative to voters prior to the 2007 Session. At the urging of some legislators, a Leadership Group of 21 business and government leaders has been formed to decide whether the RTID statute should be revised. Federal Way officials believe it is critical that the RTID remain viable and workable, and the City will be actively involved in any 2006 legislative discussions regarding the enabling statute. Puget Sound Regional Council (PSRC) Executive Board Voting Seat Through a provision of the 2005-07 new -law transportation budget bill, the PSRC was directed to add an automatic voting seat on the PSRC Executive Board for Federal Way. In the event that voter passage of 1-912 requires the Legislature to re-examine its transportation budget, the City of Federal Way will work with area legislators to ensure the PSRC voting seat is not impacted. Also, Federal Way is prepared to support legislation put forth by the PSRC to make the Federal Way seat permanent and set up percentage -of -county population criteria for future Executive Board membership. City of Federal Way 2006 Legislative Agenda Support Items for 2006 Assuming these items arise during the 2006 session, Federal Way will work in support of efforts led by others in the following areas (grouped in alphabetical order according to general subject matter): Capital Budget Needs • 2006 Session Project List Federal Way is deeply appreciative of the leadership and efforts by its area state legislators in the area of State Capital Budget funding. Through capital budget line items, the City received $856,000 in 2005- 07 for the Joe's Creek stream restoration and salmon enhancement project, as well as $100,000 toward the rebuilding of the West Hylebos Park boardwalk. 2006 is a course correction year for the state's biennial capital budget, and the City realizes that there are likely to be few if any opportunities for new capital funding. In the event that new capital funding for infrastructure, parks, and the like, is being examined, the City forwards these items: Project Brief Description State Funding Needed Capital Budget Line - Item, or Capital Budget grant program *Camp Kilworth Preserve public space on $2 million Line -Item or IAC (via a acquisition Puget Sound with retroactive (NOTE: Council decision purchase of a 25 -acre site reimbursement program) to be made 10/4/05)) that was formerly home to a Boy Scout Camp. *Downtown Park/Plaza Provide funding for the $5 million Line -Item or possible City to enter into a public- Jobs Development Fund private partnership to add candidate project a park or plaza component to future proposals for downtown economic development. *Dumas Bay Center Capital upgrade to $500,000 Line -Item rehabilitation conference center and theater facility. *Saghalie Park field turf Replace grass field with $500,000 Line -Item or IAC/WWRP all-weather artificial turf product to allow for year- round use. *Lakota and Sacajawea Redevelop two aging $6 million Line -item or IAC/WWRP Park redevelopment regional parks inherited from King County upon incorporation. Criminal Justice, Law Enforcement, Courts • Courts — Municipal Court Services Flexibility Federal Way will support efforts by the AWC, individual cities such as Bellevue and Kirkland, and others to clarify state law so as to explicitly ensure that cities can contract with one another to provide multi -city or Community Court municipal court services. Drug Seizures: Timing and Direction of Proceeds One of the criticisms of drug forfeiture efforts by law enforcement is that proceeds from drug seizures are not always returned to law or drug enforcement. This is not true in Federal Way. The City has an exacting process of returning drug seizure proceeds to law and drug enforcement and maintains very detailed accounting records. A 2005 bill in the State Senate would have altered the collection and distribution of drug seizure proceeds — something the City strongly opposes. If legislation in this area is brought forth in 2006, Federal Way will join other local governments and law enforcement agencies in strongly opposing it. • E -Tickets In 2005, the Administrator for the Office of the Courts brought forth legislation to allow local governments the option of using paperless tickets for various civil fines and penalties. The so-called E - Ticket bill did not pass, but is likely to be brought back in 2006. If this legislation contains some type of provision to ensure that signatures on the original ticket can be obtained, kept on file, and verified, Federal Way will strongly support E -Ticket legislation in 2006 as an important efficiency and cost -savings tool. Interrogating Juveniles in Criminal Cases During the 2005 session, the State Legislature considered SB 5288, legislation that would have placed new notification requirements on law enforcement agencies that interview juveniles as part of a criminal investigation. Federal Way and other cities, counties, and law enforcement groups strongly opposed the legislation because some of the provisions in it would have allowed parents to undermine and even cut short an important interview component of criminal cases. If juvenile interrogation legislation is brought back in 2006, Federal Way will oppose legislation similar to 5288. The City is willing to look at legislation that calls on law enforcement to attempt to notify parents in situations where a juvenile is being interrogated. Federal Way will want to ensure language on notification is worded carefully and will want to be involved in discussions over legislative language. Economic Development/TIF and other tools • New Economic Development Financing Authority and Tools for Cities via State Sales Tax Credit Federal Way will support new funding and tools to assist with enhancing economic development opportunities in cities. • Expansion of Tax -Increment Financing (TIF) More than 45 other states use Tax -Increment Financing (TIF) as a tool to stimulate economic development in urban areas. Federal Way supports this tool. but given the reluctance by some key legislative leaders to embrace the expansion of TIF, the City will support rather than initiate any efforts in this area. Efficiency Measurers Promoted by Cities and Counties • Efficiency Measures Pursued by the Tri -Association Group and Individual Local Governments Federal Way supports efforts by the AWC, the Tri -Association group of city and county associations, and individual local governments to seek out changes in statute that can make the provision of local government services more efficient and cost-effective. 7 GMA, Annexation, Housing Targets, Land -Use, Permitting, Impact Fees It is expected that a variety of proposals related to the Growth Management Act (GMA) will come before the 2006 Legislature — everything from how "Best Available Science" is defined, to how flexibly cities can move forward in meeting state guidance on four dwelling units/acre zoning for single-family residences, to whether GMA comprehensive plans can be amended more than once a year. Federal Way does not expect to take a lead role on these issues, but below are some specific items the City is prepared to support or oppose: • Annexation Authority for Cities Federal Way will support additional measures that better facilitate the process of annexations, which are expected to occur under the tenets of the Growth Management Act (GMA). • Governor's GMA Reform Package This summer and fall, representatives of the Governor's Office met with various stakeholders in preparation for developing a GMA Reform Package to be unveiled by Governor Gregoire. Federal Way will await specifics of the proposal — but is prepared to support planks of the Governor's GMA package that make the Act easier to implement and administer. Housing Issues Involving Buildable Lands and Housing Targets Federal Way is sympathetic to the goals and objectives of housing availability and land supply for housing under the Growth Management Act. The City supports a thorough review of the process for allocating housing targets, as well as establishment of objective criteria for allocating targets. Additionally, the City did not oppose the agreed-upon language in SSB 5602 from the 2003 session, which asks cities to ensure that amendments to their comprehensive plans and GMA plans, taken collectively, will not diminish a city's commitment to meeting housing targets and economic development goals. However, the City does have concerns with any potential 2006 legislative proposals that would introduce new definitional and data -collection requirements to the Buildable Lands program that will add new costs and requirements for cities. Federal Way will work against measures that unnecessarily add new costs and requirements for cities and counties within the Buildable Lands program. Additionally, the City will work against legislative initiatives that attempt to hold cities responsible for housing market performance. Clarifying Local Zoning Authority on Location of Gambling Establishments Federal Way supports legislation clarifying that localities, through their zoning and land -use police powers, have authority to condition the location of gambling establishments and determine where they should be situated in a community. Federal Way believes such authority already exists in law and will want to ensure that any 2006 legislative initiative is drafted so that it builds off of the concept of existing authority. Planning and Environmental Review Fund (PERF) In its request package for 2006, the Governor may be seeking re-establishment of monies for this fund. The PERF program was funded in 1995-97, but was discontinued when the state ran into economic troubles. The program provides grants to local governments that do pre -planning of large areas so that there can be an overall land -use vision for such areas vs. a parcel -by -parcel, case-by-case view. For Federal Way, there are several areas in which PERF dollars could be put to good use. Federal Way will support a PERF funding for the 2006 Supplemental Budget if Governor Gregoire brings one forth. SEPA Reform Federal Way's planning officials have suggested that substantive portions of the State Environmental Policy Act (SEPA) are duplicative of requirements that Federal Way and other cities already enforce through individual codes regulating transportation, drainage, sensitive areas, etc. While Federal Way will not be initiating any SEPA reform proposals for 2006, the City will look to fold this idea into other SEPA proposals that may come along. LEOFF & PERS Pension Costs, Workers' Compensation, Family and Medical Leave • The 2006 Legislature may be considering changes to the Law Enforcement Officers and Firefighters' (LEOFF) and Public Employees' Retirement System (PERS) retirement systems, the Family and Medical Leave Act (FMLA), and workers' compensation. In all these areas, Federal Way is prepared to support efforts by AWC and others to prevent the passage of legislation that imposes new cost burdens on employers. Regarding FMLA, if the Legislature considers a bill in 2006, the City would like to see the Legislature make distinctions between public and private employers, or exempt employers already offering significant leave allowances (such as Federal Way). The City also will work with AWC to urge legislators to smooth out any contemplated pension rate increases, and avoid spikes in the rates that cause sudden and significant budget impacts for local governments. Liability Reform Liability Reform Package/Public Duty Doctrine The Legislature has looked at liability reform for the past several years. Partisan divisions and sharply differing views on this subject area have kept omnibus legislation from being enacted, but lawmakers have passed specific items, including an employee reference liability protection measure in 2005. Federal Way is prepared to support certain pieces of liability reform in 2006, such as changes to the Public Duty Doctrine, and putting the brakes on joint and several liability costs for cities. Local Government Funding, Grant Programs, and Funding Options • Support New Funding, Grant Programs Funding Options In areas such as Economic Development, affordable housing and prevention of homelessness, public health, and human/social services, Federal Way will support state funding, state grant programs, and funding options that help local governments meet service obligations, provide additional opportunities, and protect the most vulnerable citizens in local communities. Property Tax Levy Rate Ratification Authority Federal Way took forward a 2005 legislative initiative to amend state law to allow cities, counties, and other local taxing districts to lock in or ratify existing property tax rates over a six-year period. Based on discussions with key legislators this interim, Federal Way will no longer make this an active part of its legislative agenda. However, should other taxing districts take this initiative forward in 2006, Federal Way will be supportive of their efforts. Miscellaneous Local Government Issues Expansion of non -tribal gambling This issue was debated in prior legislative sessions and dealt with via a voter initiative in 2004. Federal Way does not believe that significantly expanding non -tribal gambling is an appropriate way to address the fiscal crises confronting state and local governments. Further, the City has concerns about how such proposals affect a community's character and quality of life. While the City does not expect to see legislative consideration of this issue in 2006, Federal Way will join others in opposing non -tribal gambling expansion. • Public Records Requests, Public Disclosure Act (PDA) The Legislature enacted a comprehensive PDA bill in 2005, covering attorney-client privilege exemptions to releasing documents, how local agencies are to respond to broad requests for records, and the adoption of a model rule on public disclosure. Given the 2005 action by the Legislature, the City of Federal Way urges the 2006 Legislature to refrain from additional legislative action that would further complicate how to deal with public records requests. The City also seeks the state's help in clarifying that the courts system is directed to respond to records requests under the same laws and guidelines as general governments. • Public works bid laws During the 2004 and 2005 sessions of the Legislature, several bills were initiated regarding the public works bidding process. The bills would have made the public works bid process more onerous, more costly, and perhaps more prone to liability problems by, for example, requiring local governments to establish new "just cause" provisions for rejecting bids. On behalf of cities, AWC helped defeat these bills. Federal Way will join cities, counties, and ports in opposing 2006 legislation that attempts to add new costs and complexities to a public works bidding process that works well under current statute. Parks and Recreation Parks Funding Initiatives — WWRP, Overall State and Local Parks Funding Federal Way has heard from some legislative leaders who may push for a major state and local parks funding initiative in 2006, perhaps through an issuance of new state bonds that would require voter approval. It is also possible that the Washington Wildlife and Recreation Coalition (WWRC) will push the 2006 Legislature to increase funding for the Washington Wildlife, Recreation, and Parks (WWRP) program in the state's capital budget from the current $45 million to $60 million. Federal Way expects to apply for WWRP funding next year and will support an initiative to increase funding for WWRP. The City also supports new funding initiatives for parks and open space and would advocate that maintenance and operations be in that funding mix. Stormwater • Flexible Permits for Phase II Cities and Counties Last summer, the state Department of Ecology published a first draft of a permit that would regulate how Federal Way and more than 100 other cities and counties deal with stormwater runoff and detention. DOE drafted the permit in accordance with its authority to administer the National Pollutant Discharge Elimination Standards (NPDES) under the federal Clean Water Act. While the City is appreciative of the DOE's efforts, Federal Way and numerous other city and county jurisdictions took objection with key components of the Phase II permit, including those on monitoring and what conditions developers must meet for redevelopment of property. Federal Way and other Phase 11 jurisdictions are attempting to work out permit concerns with DOE, but reserves the right to take this issue to lawmakers if a satisfactory resolution cannot be worked out with Ecology. Water -Sewer District Assumption Authority for Cities to Assume Water -Sewer Districts In the 2004 and 2005 sessions, Federal Way worked with the AWC and other individual city representatives to derail legislation that would have added cumbersome requirements to cities wishing to assume existing water and sewer districts. While Federal Way is not imminently seeking to assume water districts such as Lakehaven and, in fact, looks for opportunities to work in concert with the Lakehaven Utility District, the City does not want to see water -sewer assumption laws undermined. Federal Way will work against water -sewer assumption laws that make these efforts more difficult, cumbersome, and costly for cities. The City may also join with AWC and others in pro- actively seeking other alternatives than those annually put forward by special districts. 10 City of Federal Way 2006 Legislative Agenda Federal Issues Sales Tax on Catalogs, Mail -Order Sales, E -Commerce Federal Way supports congressional action allowing state and local governments to collect sales and other applicable taxes from remote catalog and Internet sellers. Past judicial decisions and a federal moratorium on Internet taxation gives out-of-state retailers an unfair competitive advantage over locally based businesses. A sales tax simplification and streamlining project that involves more than 40 states, including Washington, is designed to show Congress that uniform definitions and procedures can be used to make the sales tax process as seamless as possible for e-tailers. Federal Way supports this effort by Washington and other states. The City is concerned that in addressing the Internet sales tax issue, Congress should refrain from telecommunications tax simplifications that undermine state and local authority in areas such as utility tax. Community Development Block Grant Federal Way supports full funding of the Community Development Block Grant program (CDBG). In greater Federal Way, CDBG funds support emergency services, public safety, and community-based collaborations. Federal Way opposes efforts to consolidate the CDBG funding with other programs and urges Congress to resist requested cuts. The City also advocates the state's congressional delegation to reverse the trend of flat and declining appropriations. COPS & Local Law Enforcement Block Grants Since their inceptions in 1994 and 1996 respectively, the COPS grants and Local Law Enforcement Block Grants (LLEBG) have been important sources of revenue for the City of Federal Way's public safety efforts. The COPS Universal Hiring Program and COPS MORE programs provided roughly $2.3 million and 28 police officers to Federal Way's new police department. In addition, the City has received nearly $500,000 from LLEBG. Federal Way is disappointed by recent Congressional action that has consolidated.the COPS and LLEBG programs with others and resulted in reduced funding. It is the City's hope that funding for law enforcement can be restored in coming sessions of Congress. • Land and Water Conservation Fund Federal Way strongly supports full funding for the Land and Water Conservation Fund and its stateside component to support the acquisition, construction, and repair of recreation and park facilities. Homeland Security Funding Federal Way supports funding for homeland security and is doing its part to keep local communities as safe and secure as possible. However, the City urges Congress, in any measures for provision of homeland security funds, to distribute those funds as directly as possible and to local government and first responders. The City also advocates funding for training and overtime costs that will occur in our collaborative effort to protect our homeland. • Transportation Federal Way appreciates the passage of the SAFETEA-LU reauthorization of TEA -21, and high priority monies that were set aside for the 1-5/SR-18/SR-161 "Triangle" Interchange as part of this legislation. The City will continue to push for discretionary appropriations and grant funding for the Triangle, City Center Access project, and other key transportation projects. • Reauthorization of the Telecommunications Act Federal Way recognizes the need to rework federal telecommunications laws to keep up with the ever- changing world of technology. 11 However, the City strongly opposes provisions that pre-empt or limit the ability of local government to manage franchises and rights-of-way. Local government management of franchises and public right-of-way ensures robust telecommunications services are offered to the public. • Project Funding Needs Federal Way will continue to pursue federal funds for key transportation, economic development, parks, and stormwater infrastructure projects as those funding needs arise. IN