Fund the pool operations with a Sales Tax option

[pasayten]

Pasco just did this!!!!!

Voter Approved Indoor/Outdoor Aquatic Facility
The voters of the Pasco Public Facilities District voted on Proposition No. 1 imposing a 2/10 of 1% Sales & Use Tax for the purpose of funding an Aquatics Facility and Competition Pool during a special election held in April 2022. The PPFD Ballet Measure was approved and certified by the Franklin County Auditor in May 2022.

The collection of the Sales & Use Tax commenced on January 1, 2023. The PPFD Board intends to allocate funds from the voter approved Sales & Use Tax consistent with RCW 82.12.048 to fund the building and operations of an Aquatics Facility and, in Phase 2, a competition pool.

https://pasco.civicweb.net/portal/members.aspx?id=55

[pasayten]

A PFD sales tax seems like a reasonable solution. I’m guessing only the residents of Twisp and Winthrop would be able to vote on the proposal? And can Winthrop collect taxes for a facility that is built in Twisp?

Good questions... Will need some legal opinions...

[dhop]

A PFD sales tax seems like a reasonable solution. I’m guessing only the residents of Twisp and Winthrop would be able to vote on the proposal? And can Winthrop collect taxes for a facility that is built in Twisp?

[dhop]

This sales tax plan sounds like the way to go. For every $100 purchase you would only have to pay an extra 20 cents. Travelers to Seattle and other cities in the state are hit with additional sales taxes, we should return the favor. The burden for paying the expenses of this mega pool complex shouldn’t fall entirely on property owners. Much, much fairer way to pay for the pool.

[PAL]

The most reasonable plan so far. Everyone would pay. Not just the property owners.

[pasayten]

My original list of options/questions...

1. Could Winthrop and Twisp each create their own PFD and combine the funds to support a joint pool?
This could be a solution! Needs legal verification. RCW 36.100 implies county boundaries, but Pasco has a PFD...
https://www.pasco-wa.gov/225/Public-Facilities-District

Overview
Any city or group of contiguous cities in a county of less than one million population may create a public facilities district (PFD) under chapter 35.57 RCW to develop, improve, and operate "regional centers" (defined in RCW 35.57.020) costing at least $10 million and serving a regional population.

In addition, any county may create a public facilities district under chapter 36.100 RCW to develop and operate sports, entertainment, convention, or recreational facilities, as well as "regional centers" as defined above.

Public facilities districts are municipal corporations with independent taxing authority and are taxing districts under the state constitution. PFDs must be coextensive with the boundaries of the jurisdictions that created them.

So... it would be under RCW 35.57, nor RCW 36.100... Not sure how the $10mil factor comes into play. More lawyer stuff...


2. Could a school district boundary be used for a PFD?
No

3. Could two cities and a small portion of unincorporated county between them form a PFD?
No

4. Maybe Winthrop and Twisp could extend their boundaries to become contiguous?
Not likely

So we are left with option 1. With a reasonably sized pool, this could be a viable option.
Total Pool Sales Tax Revenue per year $239,349 should be adequate with some left over for debt service or other expenses.

I would not mind a local 0.2% sales tax add on to support a reasonable cost pool for the Valley. Much better than a Metropolitan Park District and a permanent property tax. In addition, tourists would also be helping to pay for the operations of the pool, not just the local tax payers. Food exemptions still exist so as to not to unreasonably burden the fixed/low income folks.

[pasayten]

Dang... Both Twisp and Winthrop (and the county) are already collecting the maximum 0.5% first half and 0.5% second half unrestricted sales taxes. Funds for O&M of a pool would have to come out of their original budgets for the revenue (1.0% total).

I am now looking at a Public Facilities District (PFD) and Sales Tax option (0.2%) for the operation and maintenance of a "regional" swimming pool. A PFD is created by the city/county... The sales tax is voted upon by a simple majority of the local voters.

A with additional sales tax authority can be created for contiguous cities, but Winthrop and Twisp are not contiguous. I have asked the AG office some questions...

Could Winthrop and Twisp each create a PFD and combine the funds to support a joint pool?
Could a school district boundary be used for a PFD?
Could two cities and a small portion of unincorporated county between them form a PFD?
Maybe Winthrop and Twisp could extend their boundaries to become contiguous?

Anyway, waiting for response from AG Office. I also passed this info on to Andy Hover as the AG Office may not respond to opinion questions from private citizens.

In the meantime, I also found this...

https://www.atg.wa.gov/ago-opinions/ext ... ricts-also
https://www.atg.wa.gov/ago-opinions/aut ... ding-other

And this...

Olympia, Lacey, and Thurston County created a regional PFD... Why not Twisp, Winthrop, Mazama, and Okanogan County?

https://cityoflacey.org/government/lace ... 0in%202003.
https://olympia.granicus.com/MetaViewer ... ta_id=8863

In summary, I did note on the AG Opinion web page that they may not answer these opinion questions for a private citizen. They will for government officials. If that is the case, maybe Andy can help out.

Against Proposition 1 and a Metropolitan Park District... But for a reasonable cost and funded pool for the Methow Valley.

[mister_coffee]

Here is a crazy analogy.

Ketchikan Alaska has an elaborate indoor aquatic center....

Yeah, but because of the North Slope Oil Royalties the state is very flush, so I'd suspect that the pool was financed through them. I wouldn't assume that the overall tourism revenue there is dramatically higher than here. Although it probably is very differently distributed over the course of the calendar year.

The Ketchikan Killer Whales was quite a good swim team for the size of the community back in the day.

[pasayten]

Interesting. I asked FOP about establishing a sales tax to fund the pool expenses a couple of months ago. They told me they looked into it but there was no way they could do it without breaking State law. They weren’t fibbing, were they?

I am not a lawyer, but it looks like there are sales tax options to me...

https://mrsc.org/explore-topics/finance ... -use-taxes

Unrestricted City and County Sales Taxes
Cities and counties can impose “unrestricted” sales taxes totaling a maximum of 1.0% on top of the 6.5% state sales tax. These revenues may be used for any lawful governmental purpose.

Below is a summary; for a more comprehensive discussion, including administration and revenue-sharing calculations, see MRSC’s City Revenue Guide and County Revenue Guide.

Basic/First Half Sales Tax
Any city, town, or county may impose a “basic” or “first half cent” sales tax of 0.5% (RCW 82.14.030(1)). These revenues are unrestricted and may be used for any lawful governmental purpose. All cities and counties in Washington have imposed this tax.

The revenues within incorporated areas are shared between the cities and the counties, with 85% distributed to the city and 15% to the county. The total combined (city plus county) rate may not exceed 0.5%, so the statute provides mechanisms for credits and revenue sharing to make sure this limit is not exceeded.

Optional/Second Half Sales Tax
In addition to the “basic” or “first half” sales tax, any city, town, or county may impose an “optional” or “second half cent” sales tax of up to 0.5% (RCW 82.14.030(2)). These revenues are also unrestricted and may be used for any lawful governmental purpose.

The total combined (city plus county) rate may not exceed 0.5%, and just like the “first half” the statute provides mechanisms for credits and revenue sharing to make sure the limit is not exceeded. Almost all cities and counties in Washington have imposed the second half sales tax at the full rate of 0.5%. If both the city and the county have imposed the second half at the same rate, the revenue from the incorporated areas is shared between the city and county just like the first half (85% to the city and 15% to the county).

This tax may be imposed by the legislative body and does not require voter approval. However, changes to the tax rate are subject to possible referendum even if the city or county does not have powers of initiative and referendum (RCW 82.14.036).

If a city or county has imposed both the 0.5% “basic” sales tax and the 0.5% “optional” sales tax, the total combined (basic plus optional) sales tax rate will be 1.0%.

Restricted Local Sales Taxes
Cities, counties, transit districts, and public facilities districts can impose a number of “restricted” local sales taxes on top of the 6.5% state sales tax and the local “first half” and “second half” taxes. These restricted revenues may only be used for the specific purposes listed in state statute. For any sales taxes requiring voter approval, the revenues must be spent in accordance with the purposes stated in the ballot measure.

Below is a summary of these various restricted sales taxes. For more a more comprehensive discussion of these revenue sources, including administration, revenue-sharing calculations, and ballot measure requirements, see MRSC’s City Revenue Guide and County Revenue Guide.

Public Facilities District (PFD) Sales Tax
Public facilities districts only. Public facilities districts created under chapter 36.100 RCW or chapter 35.57 RCW may impose a sales tax up to 0.2% to support their public facilities (RCW 82.14.048). The measure requires voter approval. There is also an additional 0.2% sales tax authority for “distressed PFDs” under the same section which currently applies only to the City of Wenatchee.

Asotin County Public Facilities District Resolution No. 13-01 (2013) – Submitting 0.2% PFD sales tax to voters for maintenance and operation of existing aquatic center

Pasco Public Facilities District Resolution No. 2022-02 (2022) – Submitting 0.2% PFD sales tax to voters for construction and maintenance of new aquatic facility and competition pool

Update 9/19...
Dang... Both Twisp and Winthrop (and the county) are already collecting the maximum 0.5% first half and 0.5% second half unrestricted sales taxes. Funds for O&M of a pool would have to come out of their original budgets for the revenue (1.0% total). A PFD with additional sales tax authority can be created for contiguous cities, but Winthrop and Twisp are not contiguous. I have asked the AG office some questions...

Could Winthrop and Twisp each create a PFD and combine the funds to support a joint pool?
Could a school district boundary be used for a PFD?
Could two cities and a small portion of unincorporated county between them form a PFD?
Maybe Winthrop and Twisp could extend their boundaries to become contiguous?

Anyway, waiting for response from AG Office. I also passed this info on to Andy Hover as the AG Office may not respond to opion questions from private citizens.

I also found this...
https://www.atg.wa.gov/ago-opinions/ext ... ricts-also
https://www.atg.wa.gov/ago-opinions/aut ... ding-other

Olympia, Lacey, and Thurston County created a PFD... Why not Twisp, Winthrop, Mazama, and Okanogan County?
https://cityoflacey.org/government/lace ... 0in%202003.
https://olympia.granicus.com/MetaViewer ... ta_id=8863

[dhop]

Interesting. I asked FOP about establishing a sales tax to fund the pool expenses a couple of months ago. They told me they looked into it but there was no way they could do it without breaking State law. They weren’t fibbing, were they?

[SOulman]

Here is a crazy analogy.

Ketchikan Alaska has an elaborate indoor aquatic center. It seems reasonable given that their climate is not conducive to outdoor swimming.

Alaska does not rely on property taxes. Local governments fund things through sales taxes. (Well, there is this thing called north slope oil . . . .)

So where does Ketchikan get sales tax revenue to support an aquatic center? Tourists. Lots of them.

The analogy isn't perfect, but it likely is scalable.

[PAL]

This would be doable. "Since the pool is for everybody, everybody can pay." Perhaps rents wouldn't increase so much like they would with a Rec district.
But people probably like it that property owners have been footing the bill for the levies.
Gotta put our foot down on taxing us for an Aquatics Center that we know is going to cost alot to build and maintain.

[pasayten]

The FOTP looked at four funding methods... Three park districts and a public facility district. I would suggest a simple local sales tax option. They excluded the sales tax option because they thought it had to be county wide to generate enough revenue for operations, maintenance, AND supplement building the pool. A local city sales tax option WOULD WORK if it was for operations and maintenance ONLY! Build the pool with grants and donations... Don't build it on the back of all local property taxpayers. Don't create a toxic Metropolitan Park District.


Year/Qtr Total Taxable Sales
Twisp
2023 Quarter 1 $9,064,861
2022 Quarter 4 $12,132,721
2022 Quarter 3 $13,333,064
2022 Quarter 2 $12,176,874
Total Sales $46,707,520
Add 0.2% pool sales tax $93,415 revenue

Winthrop
2023 Quarter 1 $13,161,226
2022 Quarter 4 $16,394,175
2022 Quarter 3 $24,148,852
2022 Quarter 2 $19,262,811
Total Sales $72,967,064
Add 0.2% pool sales tax $145,934 revenue

Total Pool Sales Tax Revenue per year $239,349

I would not mind a local 0.2% sales tax add on to support a reasonable cost pool for the Valley. Much better than a Metropolitan Park District and a permanent property tax. In addition, tourists would also be helping to pay for the operations of the pool, not just the local tax payers. Food exemptions still exist so as to not to unreasonably burden the fixed/low income folks.