B&O revenue helps city's 2021 budget

Higher than expected revenue from the city of Blaine’s Business and Occupation (B&O) tax has provided much-needed relief to city finances and the 2021 budget. City finance director Jeff Lazenby briefed council members at their regular bi-monthly meeting on Monday night telling them he now expected a budgeted increase from $65,000 to $200,000 and attributed the increase to council’s recent decision to re-implement late fees on B&O delinquencies.

Lazenby said “one large outlier” had paid up and he was working with another company to get them caught up as well. So far this year the city has collected $197,000 in B&O taxes for just three quarters, city manager Michael Jones pointed out.

As a result, the proposed city budget now projects revenue of $6,792,000 with $6,761,000 in expenditures for 2021. The budget will be presented to council for final action on December 14. There have been no public comments on the budget through the city website and no comments were received during the public hearing held at Monday’s meeting.

One positive result of the unexpected revenue gain is that the city will be able to provide a cost of living allowance (COLA) of 2.25 percent for members of the non-union Blaine City Light bargaining unit. Jones told council that during collective bargaining negotiations with the unit, he had essentially told them the city could only afford a 1 percent increase due to projected revenue. He asked council to consider upping the COLA pointing out that the employees had been cooperative and shown understanding of the city’s plight. The COLA percentage is also close to what other bargaining units receive from the city, Jones said.

The increase from 1 to 2.25 percent would cost the city less than $1,500. Councilmember Mary Lou Steward said, “If we can afford to pay them that little amount of money, then we should.” Council voted six for, with Garth Baldwin abstaining, saying he thought doing so was “excessive and arbitrary.”

In other business, council approved its legislative agenda for 2021. The six items are those priorities and funding requests it would like the state legislature to approve in the coming year:

• A reallocation of funds for the Bell Road/Peace Portal Drive project to allow construction of an at-grade, signalized intersection (instead of a grade separation), and $1.1 million more to complete the project.

• $1.0 million to supplement $700,000 from the city on a downtown revitalization project.

• $3.1 million for Marine Drive reconstruction.

• Support for local transportation funding options, specifically including an option for a second “penny per gallon” tax for border communities.

• Funding from RCO aquatic lands enhancement program for the city’s Marine Park beach reconstruction project.

• Real Estate Excise Tax (REET) flexibility to allow the use of REET funds for maintenance of capital facilities during recovery from the Covid-19.

Council also approved a request from Mike Mulder of Nimbus Properties, LLC for a six-month extension on a feasibility study to build out 665 Peace Portal Drive. Mulder had purchased the property from the city subject to a clause allowing for a 6 percent rebate on the purchase price upon submittal of a complete building permit within six months.

In his request to the city, the developer cited the impact of Covid-19, including the loss of a 5-year lease from a prospective tenant for his building at 442 Peace Portal, the imminent opening of The Rustic Fork Italian restaurant in that space, offering grocery store space at 648 Peace Portal for the farmer’s market as well as hiring engineers, architects and others involved in the feasibility study at a cost of $25,000 to date. Staff recommended approval of the extension pointing out it was unlikely that construction would occur sooner if the property was put back on the market. Council voted 6-1, Baldwin opposed. He gave no reason for voting against the extension.