Kirkland Councilmembers asked to keep their word on utility tax rate for customers of Northshore Utility District

Toby Nixon, candidate for Kirkland City Council, and Margaret Wiggins addressed the Kirkland City Council at their meeting on Tuesday, September 20, 2011, offering remarks regarding the utility tax rate to be charged customers of Northshore Utility District, and also regarding the proposed garbage collection rate increase.

The Northshore Utility District (NUD) serves approximately forty percent of the annexed area in Kirkland and their franchise agreement with the city is up for negotiation. Unfortunately for Kirkland citizens served by NUD, their utility tax rate will rise from 10.5% to 12.84%. Two citizens spoke before the council on the subject on the meeting agenda as item 11 (b), Toby Nixon and Margaret Wiggins. Their prepared statements to the council are presented below.

 

Mayor McBride and members of the Council, I am Toby Nixon, and I live in the Kingsgate neighborhood. My family and I receive water and sewer service from Northshore Utility District.

During the annexation campaign, we were told that we would be required to pay taxes on our utilities that we hadn’t had to pay in the unincorporated area, but that the utility taxes would be balanced by reductions in our property taxes. We were specifically told that the utility tax rate would be ten and a half percent. Many people depended on that representation when voting to support annexation.

Now we hear that the effective tax rate is not going to be ten and a half percent, but almost thirteen percent, on Northshore utilities. This isn’t fair. It isn’t right. It isn’t how we build trust. The city should stick to what the people in the annexation area were told, especially so soon after the annexation effective date. I ask you to please change the way the utility tax is calculated for public utilities operating in the city so that it is based on actual billings, or some other mechanism consistent with what new residents were told.

I also want to comment on the proposed garbage collection rate increase. I want to be sure you are aware that one of the reasons many customers in the annexation area “downsized” from large toters to smaller sizes is that Waste Management simply delivered the small sizes without even asking customers if that’s what they wanted.

Let me tell you what happened at our house. It was our understanding that when service changed from Allied Waste to Waste Management, we would receive the same size toters we had with Allied, unless we specifically requested something different. That didn’t happen. Our two 96 gallon toters from Allied (which we need because eight adults live at our house) were replaced with one 35 gallon toter from Waste Management. We had to call twice to get the large toters we wanted. Many of my neighbors had the same experience -- smaller toters were delivered than what they previously had, even though they never requested downsizing.

Waste Management knew what the effect on rates would be if many customers used the smaller toters, so I’m not surprised that smaller toters were delivered even though they weren’t requested. Just something to consider before you lock in this proposed rate increase.

Thank you.

Toby Nixon

 

Dear Members of the City Council,

Tonight your staff will give you some options as to the higher tax rate on the water and sewer bills of the newly annexed area. There is only one way to equalize this rate across the city, and that is to renegotiate the franchise fee agreement with NUD.

For your staff to say they have incorporated this tax into their budget doesn’t tell me what it is exactly they intend to spend the money on, the law says it is to be spent on maintenance of the streets. Will the JFK area be getting over $2 million in street repairs? Tell me why I should pay you $20 for every bill they send me.

Or you could renegotiate for a fair and equitable tax. Okay, a 10.5% tax is not “fair” to anyone but at least make it equitable instead of the much higher rate of 12.84% on just the NUD customers in half the city. The rate charged for the area in the Woodinville Water District is less than half that of the JFK residents in NUD. It will be NUD staff sent to shut off the water when the customers can’t pay. (In the last two months 353 service termination notices were sent by NUD to accounts just in Kirkland.)

They may say that The City charges direct customers a higher tax rate of 14%, but keep in mind that city staff did a little pocket switching and lowered the water rate to reflect a court decision concerning fire hydrants and pipe sizing for fire flow. The NUD attorney agrees these costs should be paid by the city out of taxes and not water rates. Franchise renegotiation would be a good way to settle that issue with NUD as well.

Your staff will compare bills and show that NUD charges less for the water and sewer service. Wholesale costs are lower for water because NUD doesn’t pay the CWA middleman. I have no idea why the City charges 30% more for sewer. (You should ask them.) Is better service and lower cost a reason to punish YOUR citizens with A HIGHER CITY TAX rate? Citizens on wells and septic systems pay NO TAX to the city.

Your staff has a budget to manage, but each of you who were elected to represent us, has an obligation to the citizens to make sure we are all treated equally. I’m asking you to renegotiate the franchise fee agreement with NUD right now, before any more bills go out with this unfair fee.

Sincerely,

Margaret R Wiggins JFK resident and NUD Commissioner