Cost of Klahanie annexation to Sammamish taxpayers: $4m-$5m so far

  • $3m in tax revenues to King County;
  • Forfeiture of $1m-$1.5m in sales tax equalization;
  • $700,000 to Fire District 10 for tax revenues lost;
  • In return, King County provides $500,000 in services;
  • Klahanie residents don’t get to vote in November 3 City Council elections; must wait until 2017 to vote in next City Council election;
  • Taxes get lowered for 2016;
  • Klahanie gets some services from King County it should have been doing anyway.

The cost of annexing Klahanie to Sammamish is adding up to $4m-$5m before the annexation becomes fully complete on January 1.

The cost to Klahanie voters is two years of disenfranchisement because the Sammamish City Council voted July 7 to make the annexation fully effective January 1, 2015, rather than July 31, in two weeks, when everything else procedurally effectively becomes part of Sammamish. The January 1 effective date means residents in the Klahanie annexation area won’t be able to voter for candidates in the Sammamish City Council races November 3. The next city election is in 2017.

“I know the failure for the Klahanie citizens to be able to vote for city council this November is a disappointment, although it has been mischaracterized by some as taking away their right to vote in the November election, without noting that they  will be able to vote on every issue, including King County issues, except Sammamish Council,” Council Member Don Gerend told Sammamish Comment this weekend.

Klahanie voters get lower taxes. They get more services from the County in the ingterim in a deal negotiated by City Manager Ben Yacizi, including road repairs, park maintenance and other services. Police service remains the same until January, when the County is able to accelerate employment of additional police officers, with a trickle-down effect to Sammamish, which contracts with the County Sheriff for our services. But the full complement of six police officers Sammamish promised Klahanie won’t be on board until next March, regardless of when the annexation is effective.

Yacizi and the City Council said Sammamish was following this method to avoid reducing services to Sammamish citizens during the transition.

But other than processing building permit applications, nobody has publicly identified what other services would be impacted.

Gerend, who advocated for 15 years that Klahanie should be part of Sammamish and who worked to defeat annexation to Issaquah last year, told Sammamish Comment:

“I sensed a huge feeling of relief from the city staff when we voted to have the annexation December 31st instead of July 31st. Our staffmembers have full plates, what with the Community/Aquatics Center, major changes coming in EF&R, the Trail, plus many developer projects and city projects to deal with. It is a very busy year with new staff members in key roles.”

Ramiro Valderrama, the lone Council Member to vote against the ordinance setting the dates for the annexation solely because of the voting issue, suggests that the City could negotiate with King County to have the remaining three dozen or so applications for Klahanie processed by the County.

Gerend is skeptical.

“A whole lot more negotiations and contract work would have to be done in the next three weeks. I don’t see that as reasonable to accomplish. I prefer to have our staff sitting down with the representatives of the Klahanie HOA’s and focus on putting together a work plan for next year. Maybe the transition committee can work with city staff on ideas like another All About Roads event with a big map and pins and stickums in conjunction with the gathering planned in Klahanie later in the summer. Everybody has their pet pothole or safety issue to bring to the table, and that is what we have to know before planning the work for next year.”

For all these services that will be provided by the County between now and January, Yacizi placed a value of more than $500,000.

For this, Sammamish is giving up $3m in tax revenue to the County for the remaining part of 2015. This nets to $2.5m of lost revenue to Sammamish.

On top of this, in an agreement negotiated by Mayor Tom Vance with Issaquah to transfer the Klahanie area to Sammamish, Vance agreed to forego between $1m and $1.5m in sales tax equalization from the State that is routinely offered to cities annexing rural areas.

Then there is $700,000 that will have to be paid by Sammamish to Fire District 10 by year end to make up for revenue it loses from the Klahanie annexation. (This reinforces the idea that the annexation is effective July 31, except for voting rights.)

The deal negotiated with King County–give it $3m in tax revenue in return for $500,000 in services–hardly seems like a good deal, say critics. Gerend has a different view.

“I haven’t been involved in the negotiations with the County, but I would imagine that the County expected the revenue from the Klahanie PAA for the year 2015 when they put their budget together last year. As I mentioned at the meeting, so did FD 10. I suspect that if we were to take away that revenue for the second half of 2015, the County would not be inclined to provide $500,000 or more worth of services to the Klahanie PAA during 2015.

“I am inclined to take a more regional approach and be fair to our partners, King County and FD 10. We are working with King County well in other areas. For example, in the case of the Emerald Necklace vision, King County is stepping up in terms of efforts to acquire some of the missing links in the north end to complete this 28 mile loop around the Plateau. The County is also flexing on the ELS Trail program, although it is true that we have had to keep their feet to the fire. The next section of the Trail will be even more of a test of our relations with the County, especially since it appears that flexibility has to come from the top down.

“I also look to King County and Issaquah to help us in our efforts to secure more grant money for the key commute routes out of Sammamish. Our relations with Issaquah have come full circle after the water issues died down, the Klahanie issue was taken care of and we supported Issaquah’s efforts to see improvements made to I-90 (the State Transportation Package has a lot of money in it for I-90 improvements).”

Forfeiting the sales tax equalization is a matter of being hoisted on our own petard. During the effort by Issaquah to annex Klahanie, our City Council made an effort to single out Issaquah and deny only Issaquah these funds from a statewide program. Mayor Tom Vance went to Olympia to testify in favor of a bill introduced at the behest of Sammamish by State Sen. Andy Hill, a Republican from the 45th District (of which Klahanie isn’t even a part–it lies in the 5th District). The bill never made it out of committee. Issaquah didn’t want Sammamish taking the sales tax, something Sammamish had already said it wouldn’t do if Klahanie annexed to Sammamish. So this benefit was forfeited.

(Having introduced the bill, Hill was then abandoned by Vance, Deputy Mayor Kathy Huckabay and Council Member Tom Odell, all Democrats, who then endorsed Hill’s Democratic opponent in the 2014 Legislative election. This burned bridges with Hill, who represents the entire north half of Sammamish from SE 8th St. Hill won the election, including garnering 55% of the Sammamish vote.)

The $700,000 due to Fire District 10 doesn’t have any baggage attached to it like the tax revenues and the sales tax equalization. This “make-good” is standard procedure.

“In general I concur with Don’s thoughts,” Council Member Nancy Whitten told Sammamish Comment. “If I thought it were an easy thing to accomplish, I would move the annexation date forward, but frankly Ben has convinced me that it would be burdensome on staff and I am very persuaded by that argument. ”

None of this includes some $23m Sammamish pledged to widen Issaquah-Fall City Road on the east side of the Klahanie area. While it is true this money–which may or may not be an accurate estimate–wouldn’t be spent without the annexation, Council members argue that this will benefit the 5,000 or more residents who live north of Klahanie who are captive to this road. This is a valid argument, so this figure gets a pass and in any event, the expenditure is well into the future.

 

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4 Responses to Cost of Klahanie annexation to Sammamish taxpayers: $4m-$5m so far

  1. Don Gerend says:

    Scott, you are mistaken in some of your numbers. First of all, Sammamish did not forgo the sales tax credit offered by the State to cities annexing areas; you have to demonstrate that it is a net income loss to annex the territory to qualify for the credit. It would be disingenuous for Sammamish to make such a claim. Issaquah might have made that claim, but Sammamish can provide services more efficiently than Issaquah. Secondly, if we did annex by July 31st, Sammamish would have to pay for the fire service for the rest of 2015; that blows a hole in your so-called net $2.5 million that we are giving up. I don’t understand your statement that we will pay FD 10 $700,000 if we don’t annex.

  2. 2ufromnancy@comcast.net says:

    Scott, Your recent article points out some of the challenges with the various stakeholders up here: King County, City of Sammamish, and various services relative to the annexation vote.

    You stated that you are not familiar with the traffic issues in our area of Sammamish and that you don’t notice a problem when you drive through. Your article does allude to some concerns of Klahanie residents (that echo mine) with the mention of the widening of the road and safety.

    I’ve attached a PDF and on page 3 is a map — the road I’ve been writing about is on the southeast and southwest border to the city. My house is just north of the border to unincorporated King County.

    Your statement from Don Gerend below: “I prefer to have our staff sitting down with the representatives of the Klahanie HOA’s and focus on putting together a work plan for next year. Maybe the transition committee can work with city staff on ideas like another All About Roads event with a big map and pins and stickums in conjunction with the gathering planned in Klahanie later in the summer. Everybody has their pet pothole or safety issue to bring to the table, and that is what we have to know before planning the work for next year.”

    The committee should not work with the city staff of another All About Roads event without including ALL HOA’s alone the roadway — Aldarra, High Country, Tibbetts Station, Beaver Lake Estates, Trossachs, and others. Thousands of other residents need representation at the table. Klahanie’s annexation transition is one thing; addressing the road issues is a whole other topic that we need to be included in, not just Klahanie.

    I will send Don Gerend an email, citing your article, and plea for inclusion. Thanks. Nancy Anderson

  3. 2ufromnancy@comcast.net says:

    P.S. I understand that Gerend was primarily referring to the roads within Klahanie and its potholes and safety issues. But your article mentions the widening of Issaquah-Fall City Rd., and I’ve got to believe that at the “All About Roads” forum, this regional route that follows along Klahanie’s border would be part of the discussion.

    Your articles about the transportation budget are interesting. “Be careful what you wish for” — the annexation of Klahanie mean that the city council can no longer ignore the southeast corner of Sammamish. We have long felt unheard and disregarded by the city.

    Nancy Anderson

  4. Pingback: Issaquah-Fall City Road cost jumps 36% over pre-annexation estimate | Sammamish Comment

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