Kirkland gains, loses funds under 2013-2015 state budget

After a regular legislative session, one special session and half of a second special session, Kirkland city officials now know what legislators secured for the city and what funding was dropped.

After a regular legislative session, one special session and half of a second special session, Kirkland city officials now know what legislators secured for the city and what funding was dropped.

For more than 150 days, budget disagreement between the Democrats and Republicans left many cities wondering whether a budget would be passed before the ominous government shutdown feared to take place on July 1. But the Washington Legislature recently passed a budget that left Kirkland with wins, losses and some hope.

“The city is thrilled to have gotten some good news out of the Legislature,” said Lorrie McKay, the Intergovernmental Relations manager for the city of Kirkland. “You get a little, you lose a little and you go back. It was nine months of really hard focused work to try and do right for the residents of Kirkland.”

Thanks to Sen. Rodney Tom, D-Medina, who leads the Senate Majority Coalition Caucus, McKay said $1.3 million was allotted from the capital budget to design and construct an enclosed elevator, accessible by those with disabilities, and a covered pedestrian bridge walkway that will be incorporated into the new South Kirkland Transit Oriented Development public parking garage. The access will connect the Cross Kirkland Corridor with the development.

“We’re incredibly grateful to Sen. Tom for including the pedestrian bridge in the capital budget,” McKay said, noting the funds were for phase one of the project.

And with the passage of a $65 million grant for the Washington Wildlife and Recreation Program in the capital budget, $500,000 was given to the Cross Kirkland Corridor.

The Cross Kirkland Corridor project was ranked No. 2 by the state-run Recreation and Conservation office and approved by the office’s funding board for this 2013 funding cycle.

Marilynne Beard, Kirkland’s deputy city manager, said the city is “very pleased” with that grant, which will eventually go toward developing a recreational trail at the Cross Kirkland Corridor 5.75-mile-long span.

Although many rejoiced over the $1.8 million in Cross Kirkland Corridor-related grants, city officials also let a sigh of relief when they discovered legislators left the state annexation sales tax credit alone.

The tax credit, which was implemented in 2011, funds the Finn Hill, Juanita and Evergreen Hill neighborhoods of Kirkland.

“The state annexation sales tax credit was threatened to be swept in 2012 and used to pay off the bills of the state but we fought to have it left alone,” McKay said. “That was a promise for cities who have been working hard to comply with the Growth Management Act and it will be on our list to watch for the next eight years.”

But the budget wasn’t all butterflies and rainbows.

The city, along with other municipalities, suffered greatly when legislators cut half of the local share in the liquor excise taxes and redirected funding for the Public Works Trust Fund.

According to the Association of Washington Cities, $24.7 million in liquor excise tax was spread across Washington cities, instead of $49.5 million that would have been allotted had the Legislature not diverted 50 percent of funds to the state general fund.

Beard said Kirkland city officials put the liquor excise tax revenue in reserves for the 2011-2012 budget, but by the 2013-2014 budget it was assumed to fund basic services and was planned for use.

“The annual amount of ongoing lost revenues is $135,000,” Beard said, adding that the liquor taxes are deposited into Kirkland’s general fund and were planned for basic city services such as police, fire, emergency medical services, parks and other general government services.

City staff will discuss how to adjust to the cut this summer, while the Kirkland City Council will address the issue during the mid-biennial update meeting in November, Beard said.

The city also suffered a huge loss when the Legislature “swept” $277 million from the Public Works Assistance Account into the state general fund and left no funds for the 2014 state construction loan list, which is outlined in the state’s operating budget. It was a move that severely impacted the Public Works Trust Fund – a fund that provides low-interest loans to government public works projects.

The Association of Washington Cities states legislators redirected 67 percent of the real estate excise tax, all of the public utility taxes and 100 percent of the solid waste taxes from the Public Works Assistance Account to the Education Legacy Account for six years.

Only a portion of the estate excise tax revenues and loan repayments will fund construction loans until the end of fiscal year 2019.

Marie Stake, spokeswoman for the city of Kirkland, said the city received a $4 million loan in 2011 for phase one of a sewer main project and a water main replacement project, both of which are located at Northeast 80th Street in Kirkland. However, she noted the city did not have loan applications for 2014, which is when cities would be affected, and that there were other ways to secure loans for public works projects. She added the city would be discussing those options during the November mid-biennial update meeting.

The city was unable to acquire $5 million for the next phase of the Northeast 132nd interchange ramp design, which was to be included in a statewide transportation investment package, House Bill 1955. But the bill, which would have appropriated $1.2 billion from several state accounts, was shot down in the Senate at the end of the second special session.

“The ramps are an interesting project because they were funded by the state for the ‘Nickel Project’ and they were a prior commitment by the state,” McKay said. “Then there was the recession and the state put that project on the back burner in terms of bringing in funding.”

She said the entire interchange project is $75 million and is listed as unfunded until 2023.

“That project is really important to the economic development in the Totem Lake area in getting cars on and off the freeway,” McKay said. “We’ll likely be fighting for that going into next year.”

McKay said the transportation package would have also included other Kirkland projects, and if it had passed, the city would have received $9 million.

About $1.2 million “was left on the cutting room floor,” as the transportation House Bill 1954 didn’t pass that would have slated those funds for the Park Lane pedestrian corridor enhancements project. That measure would have included a 10 cent statewide gas tax.

However, the city is still hopeful that two short-listed projects titled “Safe Routes to School” will see the light of day.

Proposed in 2012 and also in 2013 under HB 1954, two sidewalk improvements in Kirkland could get funding from the base transportation budget after the Washington State Department of Transportation goes through the short-list process.

If granted, the city would receive $920,000 for a Northeast 104th Street sidewalk that would serve Mark Twain Elementary and $816,000 for the Northeast 132nd Street sidewalk improvement that serves Carl Sandburg Elementary and Finn Hill Middle School.

“[The council’s legislative committee] worked from September through June 30 on trying to keep the city’s priorities before the Legislature,” said McKay, who noted transportation investments were of top priority. “We’re ready to regroup and go back in next year.”