News

People east of Federal Way could vote their way into city

By PHILIP PALERMO

The Mirror

By August 2007, voters in unincorporated neighborhoods east of the city may get to decide if they want to be Federal Way residents.

New state legislation, Substitute Senate Bill 6686, signed into law by Governor Christine Gregoire in March, could pave the way for the city’s efforts to expand eastward.

“Dealing with the whole annexation issue has been on our agenda for years now,” City Councilman Eric Faison said.

Faison, a former Potential Annexation Steering Committee member, said King County has encouraged cities to absorb neighboring unincorporated areas, called potential annexation areas.

Much of Federal Way’s potential annexation area is located east of Interstate 5.

The new law essentially allows cities in King, Snohomish and Pierce counties, except Seattle, to impose a sales and use tax if they find costs to provide city services to an annexed area exceed the expected revenue from that area.

Since most of Federal Way’s proposed annexation area is residential property instead of more revenue-conducive retail property, the city estimates it would lose money each year.

“Generally speaking, residential doesn’t pay for itself,” Faison said.

According to the city’s 2003 annexation feasibility study, one of the proposed solutions to the deficit was state assistance.

The new law makes it possible for Federal Way to impose a 0.2 percent sales and use tax for no more than 10 years if it annexes the more than 20,000 residents east of the city. All revenue from the tax would go toward providing city services to the annexed area.

Such an annexation could push the city’s population above 100,000, overtaking Everett as the state’s sixth-largest city. Federal Way’s population now is about 84,000.

The tax would be taken as a credit against the state’s sales and use tax, in essence allowing cities to keep 0.2 percent of the state tax. The end result means residents wouldn’t see an increase in their taxes, a Senate bill report stated.

The law also states revenue from the tax may not exceed the deficit between the cost to provide services to the area and the expected revenue from that area. Each year, if the tax revenue is ever greater than the expected deficit, the tax would be suspended for the rest of that year.

Three neighborhoods –– North Lake, Redondo East and a portion of Parkway –– annexed into the city last year.

Council members last looked at annexations at a January retreat, when they discussed the possible annexations of the Star Lake, Camelot and North Lakeland areas.

According to documents from that retreat, the city estimated it would face a $1.6 million deficit if it extended city services into those areas.

The city’s potential annexation area also includes the larger Lakeland area, Jovita and the remaining unincorporated areas of Parkway.

Interim city manager Derek Matheson said officials are reviewing the city’s options. He added the council hasn’t made any decisions on which neighborhoods to consider for annexations.

Any annexation push would likely include an effort by the city to promote the levels of service it would provide in the proposed annexation areas.

“I think we’re going to have a large outreach effort,” Faison said.

He said voters in the proposed annexation area helped defeat Federal Way’s initial efforts to become a city.

Still, times and residents change. Faison said many current residents may not feel the same way about incorporation.

“We’ve heard some positive (comments), some negative,” he said. “It runs the gamut.”

Faison said the earliest the issue could go to voters would be August 2007.

Though the state law gives the city new taxing options, enacting those taxes still depends on voters in the proposed annexation area.

Matheson pointed out it isn’t the city that decides whether or not the neighborhoods will be annexed.

“It’s ultimately the people who live there,” he said.

Staff writer Philip Palermo: 925-5565, ppalermo@fedwaymirror.com

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