Annexation at what cost to Issaquah residents?
January 14, 2014
By Peter Clark
Annexing the Klahanie area would lead to many costs and benefits for Issaquah residents according to the city-commissioned Nesbitt Planning and Management study, but questions remain.
Services to the Klahanie potential annexation area would cost Issaquah $4.63 million annually and include increasing city staff by 15 full-time employees, according to the study. The city would also incur $6 million in start-up costs. Amortizing start-up costs over five years would raise the annual $4.63 million to $5.8 million.
Through property tax, retail sales and other revenues, the study anticipates the city would receive $6.5 million annually from the Klahanie area. That leaves a supposed net benefit of $645,000 annually to the city, dependent upon a state tax credit.
Of that expected revenue, $1.1 million would be that state tax credit. In order to make the Growth Management Act viable for municipalities absorbing costly areas, the state provides a credit on .1 percent of state tax, for up to 10 years. The city would have to prove the cost of annexing the Klahanie area would outweigh the revenues in order to receive the credit.
The impact of the tax credit led annexation challengers to doubt the longevity of the state’s commitment.
“There’s the annexation sales tax credit, which we’re assuming we’re going to get for 10 years,” City Councilman Joshua Schaer said, who has continually voiced concern about the state’s financial state with regard to the annexation.
Issaquah officials continue to trust the state’s promises, contained in the Revised Code of Washington.
“The state made a commitment and they have lived up to that commitment all along,” City Administrator Bob Harrison said. “They have done nothing to say otherwise.”
Costs of the study
Exploring a possible annexation does not come cheap. The Nesbitt Planning and Management study, outlining the revenues Issaquah would acquire and costs it would incur should an annexation pass, cost the city more than $96,000.
More people, more money
By state law, Issaquah cannot lobby for either outcome on the Feb. 11 vote, though Harrison said the city would receive a large benefit by adding 11,000 people to the population.
A larger population would make Issaquah more competitive for regional, state and federal dollars, he said.
At 50,000 residents, Issaquah would become an entitlement city for Federal Community Development Block Grant consideration, which Harrison said would be a boon to the city.
“We are much more competitive as a bigger entity,” Issaquah Chamber of Commerce Chief Executive Officer Matthew Bott said. “Our footprint’s a little bigger.”
Many say the Klahanie area has grown with Issaquah and uniting the two would benefit both.
“From a local and regional perspective, it just makes sense since the community connection between Issaquah and Klahanie is strong,” Bott said.
Issaquah residents would also benefit from the addition of roughly one-third the current population, who would join in payment of approved bonds and levies.
“Financially, when we bring others into the community, they help to share the whole,” City Finance Director Diane Marcotte said.
The cost of Klahanie
When Issaquah first held an annexation vote in 2005, the state of the roads in the Klahanie area was significantly better. Road improvement and maintenance represents the largest portion of the $6 million in start-up costs. Including storm water improvements, the total amount of one-time costs for the Issaquah Public Works Operations Department would come to $5.2 million.
The Nesbitt study explains that an immediate upgrade to the roads would prevent future expenses: “The challenge for the Public Works Department is to provide maintenance to the road surface before the road degrades so much that even the subsurface is damaged and the road needs to be rebuilt.”
The city would add any extra projects of improving roadways in the Klahanie area to the Transportation Improvement Program, a long list of planned upgrades reviewed annually by the city. Some arguing against an annexation fear the city’s road improvements will not fulfill what Klahanie-area residents expect.
“They’re saying, ‘We’ll take you in, but we’re not guaranteeing you’ll be anywhere on this list,’” former City Council member and annexation opponent Dave Kappler said. “The council’s not promising what you think with road improvements, and whatever else they’ll promise you is questionable.”
More police, more cost
If the annexation passes, Issaquah would replace police service from the King County Sheriff’s Office, which would mean adding patrols to the area’s two square miles. The Nesbitt study looked at an existing district in Issaquah with similar demographics, compared it to the Klahanie potential annexation area and determined the city would need to add five patrol officers and another records specialist to the police department.
The department disagrees.
“The department would like six new officers,” Issaquah Police Chief Paul Ayers said. “The council needs to consider that as they make their final plans.”
The sentiment was echoed from the city Finance Department as the city’s administration plans run parallel with Ayers’ proposal.
“We’ve been internally moving toward six officers,” Marcotte said. “Additional resources from Klahanie would provide funds for an additional officer.”
The cost and the distance of the furthest point in the Klahanie area from police headquarters at Issaquah City Hall has added to arguments from annexation adversaries.
“Every time we’re going to send a truck up there, we’re going to travel further than Sammamish,” Kappler said. “That’s an officer safety issue. The budget isn’t providing the same level of service. In order to bring it up to the rest of the city, the rest of the city is going to have to come down, unless you want to raise taxes.”
Klahanie homeowner Mark Seely shared similar concerns.
“This is straining the police force over a wider area,” Seely said. “If something happens at Beaver Lake Middle School, it’s the furthest point. From City Hall to get there is 5.1 miles.”
Ayers recognized the geographical distance, but said it does not relate to the way the police force operates.
“Remember, our patrol function isn’t here, it’s out in the street,” Ayers said. “Klahanie is not the farthest from the station. That’s not how patrol works.”
He assured residents that the level of police service would not change for Issaquah and it would lift the Klahanie area’s services up to city standards.
“The city residents are going to have more officers as well,” Ayers said.
The Nesbitt study anticipated flexibility in its recommendations, saying that more officers and support staff may be needed to ensure the city gets sufficient police coverage.
Parks and expectation
Klahanie Park has remained a sensitive subject since King County considered closing it due to budget cuts in previous years.
“As soon as they put that out on the news, boy, I can tell you there were some people real upset about that,” Klahanie-area homeowner Rob Young said.
Should the annexation pass, the city would spend almost $400,000 in one-time improvements, according to the Nesbitt study. Those would include enhanced field drainage and adding bleachers to the park.
“Klahanie Park would be available for the whole community and programmed by our Parks & Recreation Department,” Harrison said.
In fact, the city already utilizes the park in its programs and little would change.
“Because Klahanie is so integrated in our whole community, we run some programs up there right now,” Parks & Recreation Manager Brian Berntsen said. “We always work to get people on the field. Little League, lacrosse and soccer heavily use it now.”
Now, the city rents Klahanie Park from King County. If the area is annexed, Berntsen said the city would save between $200 and $300.
Outlying factors of the study, upon which the City Council has made most of its decisions, continue to raise questions among opponents. The city’s plan to adjust the police patrol recommendation speaks to them about questions that surround the vote.
“The Nesbitt study has made this an economic success for the city, but it’s leaving out so many things,” Seely said.