City Council Recap | May 5, 2020
Posted on 05/08/2020

The Newcastle City Council roundups offer a digest of notable items for those who can't make it to the regular meetings. View the meeting agenda packet here and watch the meeting video here. View past City Council roundups at newcastlewa.gov/councilrecaps.

COUNCIL REVIEWS FINANCIAL IMPACTS OF COVID-19

The COVID-19 outbreak is forcing everyone to alter their routines and take extraordinary measures to slow the spread of the virus. This has come with significant economic impacts, and the City of Newcastle is not immune. With business closures, construction project slowdowns and mandatory social distancing measures, cities across the region are feeling the impact of revenue losses due to the COVID-19 shutdown.

Staff prepared a study analyzing several scenarios that outline how the shutdown impacts our budget now and into the future. The deep-dive assessment looks at anticipated revenue losses and reviews opportunities for expenditure savings. Prior to the public health emergency, the City forecasted an $896,000 deficit in the operating budget. Depending on how quickly the economy recovers, staff estimates that number will now be anywhere from $1.125 million to $1.929 million.

With a budget shortfall made worse by the COVID-19 outbreak, City Manager Rob Wyman noted that the City is implementing the following actions to help mitigate the loss of revenues:

1. The City has paused all new hiring. There are currently four vacant staff positions (out of 28 total) that were in the process of being hired when the crisis began. These positions will remain unfilled until we have a better grasp of the longer-term fiscal impacts.

2. The City is delaying expenditures in all departments that are not essential to our daily operations or the COVID-19 response. City trainings and travel have been canceled indefinitely and non-essential consultant projects have been stopped.

3. We’ve made the difficult decision to cancel this summer’s Fourth of July fireworks and Concerts in the Park series in the interest of public health. Sponsorships, not taxpayers, fund the majority of Newcastle’s summer events. However, given the current economic climate, we’ve understandably seen a decrease in sponsorship commitments. The cancellations will be a minor help in reducing financial impacts to the City.

4. City staff will continue to seek federal, state and county financial assistance to help local businesses survive this crisis. We are trying to be a clearing house of information and advocate for our local business owners. In addition, we continue to update our “Newcastle To Go” site to help drive sales to our local restaurants and businesses. 

5. Our City leadership team and members of the City Council Finance Committee have updated our 2020 revenue forecasts and analyzed several scenarios that outline how the shutdown impacts our budget. This will be updated at least monthly as new data becomes available. It will also form the basis for policy decisions going forward.

Earlier this year, the Newcastle City Council adopted an action plan that outlines specific strategies to resolve an operating budget shortfall expected to eclipse $1 million for the foreseeable future. With a limited commercial retail base, declining opportunities for development and ever-increasing public safety costs (which remains the City’s largest expense), the City does not currently have the revenue streams to maintain the current levels of service that our citizens desire, as outlined in the most recent community survey. During the May 5 meeting, Councilmembers recognized that this situation has been made worse due to the COVID-19 outbreak.

That’s why Councilmembers voted to continue discussions surrounding the implementation of a utility tax. The state Legislature allows Cities to establish a utility tax to generate revenues for general operating costs, such as police and streets. Taxes are imposed on any business or public entity providing utility services (Cable, electric, waste, etc.). Newcastle is one of only three King County cities without a utility tax.

Given the current economic climate, it wasn’t an easy decision to move forward with a possible utility tax, Councilmembers acknowledged. However, some of them noted that without an additional revenue stream, the City cannot survive, much less maintain the community’s expected levels of service and police protection. Additionally, there are certain deadlines the Council must meet to ensure there is time to prepare for a possible vote on this tax measure if it is placed on the November 2020 ballot.

The City Council will review a draft ordinance during a special meeting on Tuesday, May 12. They will not adopt the ordinance that evening as they will be finalizing details for a final version to be considered at their regular meeting on May 19. Prior to any adoption, the community will have a chance to learn more about any proposed utility tax (including proposed rates, implementation dates and more) and comment on it. The City of Newcastle is committed to keeping you informed as this process unfolds. Please bookmark newcastlewa.gov and sign up for email updates at newcastlewa.gov/newsletters to stay informed.

GENERAL UPDATES

— During public comment, representatives from communities like China Creek and The Reserve shared their concerns regarding the quality of Comcast Xfinity internet in their neighborhoods. They sought City assistance in encouraging Comcast to prioritize solutions for their community. City Manager Rob Wyman acknowledged their frustration and said he will forward their concerns to the City’s Comcast representative in an effort to get answers for their neighborhoods. He also cleared up one bit of misinformation circulating among the community. Comcast technicians have told some customers that the City of Newcastle is holding up a permit that is preventing them from proceeding with improvements. That is not true. There are no Comcast permits into the City at the moment. The permit referenced is through another agency.

The Newcastle City Council wants to hear from you! Members of the public are invited to share thoughts during public hearings or two open public comment periods at meetings. Regular meetings of the City Council occur on the first and third Tuesdays of each month starting at 7 p.m., unless otherwise noted. You can also email your thoughts to Councilmembers at citycouncil@newcastlewa.gov.

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