2020/02/26 Council Agenda Packet

Everett Transit Options: • Seek increase in sales tax to keep Everett Transit as is • Merge ET with CT Change in sales tax: • Keep ET=Ask voters for a 0.3%increase in the tax rate for a total of 0.9%for Everett Transit. This would bring the total tax rate in Everett to 10.1%. o It is estimated that a 0.3% increase in Everett's sales tax rate will fund current operations. However, it would only fund the long-range growth option until 2035. • Merge with CT=Voters would be assuming a 0.6% increase in the sales tax rate,for a total of 1.2%for transit purposes. This would bring the total tax rate in Everett to 10.4%. Impact on City General Government Budget: • Cost Allocation: - Merging with CT would result in a loss in cost allocation revenue. The amount varies from year-to-year, but the five-year average is about$573,000. • Indirect Cost Impact- Indirect costs are associated with services provided by Facilities, Finance, HR, IT, and Legal. Eliminating responsibility for Everett Transit through a merger with CT would not reduce the workload sufficiently to consider a reduction in staffing. It would require the elimination of two large departments, such as Transit and Fire, to create enough of an impact to accommodate a reduction in support department staffing. However, removing responsibility for Transit may allow HR to reorganize and exchange an HR Manager position for a lower-level HR Assistant position,which could result in approximately$92,000 in annual savings for the General Government. Annual Impact on taxpayers: Median Income (2017)• , $54,562 *Source US Census Average %of income spent on taxable goods/services. 10% *Source https: bls.gov/news.release/ceasn.nr0.htm Income spend on taxable goods/services. $5,475 Sales Tax paid at 9.8%• $537 Additional Sales Tax paid if rate increased by 0.3%. $16 Additional Sales tax paid if rate increased by 0.6%. $33 `! Alternative Service Delivery/Funding Models 15 I P a g e