Othello helps Adams County with budget

Trying to prevent $362,000 loss

OTHELLO - The Othello City Council unanimously approved to allow a "levy switch" at the request of the Adams County Board of Commissioners Monday night.

Without the 2007 approval of the levy switch, between the county road taxing district and the county current expense fund, the county faces an approximate $362,000 loss to their 2008 budget. The potential loss is close to 11 percent of their budget.

The switch between the taxing districts results in an approximate $4,800 loss to the City of Othello in their 2009 budget. The county agreed to reimburse the city in 2008 for their expected 2009 loss, but not for the 2008 city budget losses.

The "levy switch" allows the county to have a larger taxation area, City Administrator Ehman Sheldon said.

For the past 29 years the county road taxing district and the county current expense fund have conducted a "levy switch," which results in the county paying back the tax dollars lost by Othello due to the county collecting for the road taxing district. Both the district and city collect property taxes for the same use.

In 2007 the City of Othello collected the highest lawful property tax allowable, $3.60 per $1,000 assessed value minus the library district's tax of 34 cents, Adams County Assessor Dave Anderson said.

The equation allows the city to collect $3.26 per $1,000 assessed value.

The county collected 67.5 cents of the levy in 2007. The amount collected by the county was reimbursed to the city to mitigate tax dollar loses to the city's taxing district. The county will be collecting approximately 33 cents in 2008 due to assessed values increasing, he said.

"We had something that happened this year that has never happened in the 29 years we had a levy switch," Anderson said. "A tipping point got reached that we didn't even anticipate."

The city can no longer collect the amount they received in the past, he said. Assessed values across the county increased so much, the regular taxation rate is considered too high. Assessed value in Othello went up approximately 18 percent, Anderson said.

"Othello grew faster than expected," City Attorney Jim Whitaker said.

The city must collect the lower of two taxation rates, Anderson said. Due to new legislation recently passed into law, the new option for the city is to collect the past year's assessed value plus a one percent increase over the previous year's assessed values and new construction rather than the rate set by the city.

The new taxation limit results in an approximate $9,600 loss for the city in 2008 due to the "levy shift," Anderson said. The $9,600 loss is due to the city approving to allow the county to conduct the "levy switch" in 2006. The switch allowed for the county's 2007 budget to be whole but caused the city to unexpectedly lose $9,600 from their 2009 budget.

Councilmember Eleanor Brodahl asked why the county was not going to reimburse the city for the lost funds in 2008.

Whitaker said the county will not reimburse the funds because the contract was created in 2006 and the new taxation rates were not expected.

Councilmember Ken Caylor said he is an favor of the "levy switch" because if the county takes a large cut in their budget, it will affect the city negatively potentially through loss of programs.

Anderson said the "levy switch" approval allows the county one year to find a solution to their taxation issue to solve possible loses in their 2009 budget.

He said the new taxation limit came as a surprise in November when the county was finishing their budget process. There was no way the county could have known the budget cut was going to happen because taxing districts do not submit budget requests until the end of the year, Anderson said.

The extension will prevent the county's budget loss for 2008 if all Adams County cities agree to approve the levy switch.

Hatton is not affected by the levy switch.

Anderson said the City of Ritzville is affected by an approximate $350 loss.

Lind would face a loss of $30 and Washtucna would face a loss of $19.

He said the monetary loses are smaller for the other cities because they are smaller and deal with smaller budgets.

Councilmember Tim Wilson was absent from the meeting.