Not worth the risk
Without the backing of sufficient evidence, the Post Falls City Council unanimously voted to forgo CARES Act grant funding at Tuesday night's meeting.
After no official response from the U.S. Treasury on the legitimacy of Gov. Brad Little's Property Tax Relief Program, the council felt it was too high of a risk to opt-in to the statewide grant.
In previous meetings, the council and city staff discussed the program's lack of security, citing an unanswered letter of intent to the treasury and a pending lawsuit by Bonner County.
During Tuesday's discussion, Post Falls Mayor Ron Jacobson noted the provision on page five of the U.S. Treasury's frequently asked questions page that explicitly states that CARES Act dollars are not allowed to substitute taxes.
Page five of the U.S. Treasury document regarding the assistance of property tax says, CARES Act funding "may not be used for government revenue replacement, including the provision of assistance to meet tax obligations."
"When I look at the CARES Act, I think the intentions were really good, but I don't think it was properly administered," Jacobson said. "I would love to see tax relief for our citizens, but I don't want to put the city, council, or our citizens into a corner if it is determined down the road this is not legal."
Some of the looming concerns about implementing Little's property tax relief program include the risk of being federally audited for incorrect use of the dollars and an upturn effect on mortgage repayments in the coming years.
"I wish it was stated somewhere that it could've been used for tax relief because I think the intentions could've been good," Post Falls City Councilman Steven Anthony said. "I think there are just too many unanswered questions."
At this time, Burley and Lewiston's cities have declined CARES Act funding, while McCall, Sandpoint, and Rathdrum have accepted it.
Post Falls' City Council also unanimously passed the $96,587,162 2020-21 budget and various city fee increases.
By choosing not to take a 3% increase in property taxes, the subsequent $356,247 will be reserved into the city's forgone balance. According to Jason Faulkner, the city's finance and support service director, Post Falls' accumulative forgone account holds approximately $1.6 million.
Most of the city funding for the 2020-21 fiscal year is funneled into upcoming capital expenditures and staff expenses. Faulkner said most of the $28.8 million increase from last year's budget is going toward the Post Falls Wastewater Treatment Plant, which has been under construction for the previous few years. While the price tag may raise resident concerns, the project is entirely funded through wastewater fees collected over multiple years.
In addition to the plant, Post Falls is expected to complete various road maintenance projects, hire three new staff members, improve city facilities, update agency vehicles, and cover miscellaneous personnel expenses. These expenses include a 2% cost-of-living adjustment and 3% merit for full-time Post Falls city employees and health benefits.
The City Council also approved six fee increases for the upcoming fiscal year, including water rates by 3%, wastewater rates by 7%, reclaimed water capitalization fees 8.06%, water capitalization fees 4.62%, impact fees 1.64%, and sanitation fees 1.5%.