Part I: Berk Report On Annexation Indicates Annexation Of North Highline Would “Pencil Out” For Burien

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by Ralph Nichols

When Seattle backed away from pursuing annexation of North Highline earlier this year, Burien looked once again toward bringing the remaining unincorporated area into the city.

Several Burien City Council members have said in the months since then that they will likely support annexation of North Highline – “if the numbers pencil out.”

While it will take a while before the financial bottom line for Burien is determined, a just-completed study of a possible annexation of North Highline indicates the numbers are there.

The study by Berk Associates was presented to council members immediately before their Aug. 1 meeting. It is available online.

According to an overview of the study, the financial analysis addressed three “key questions”:

  • “Does annexation of the area make it more or less challenging for the City to balance its budget over time?”
  • “What is the effect of the annexation sales tax credit on both the short- and long-term fiscal impact of annexation?”
  • “What is the scale of needs for infrastructure in the area?”

Berk’s findings determined:

“The current City has a present-day and structural fiscal challenge.”

“The annexation sales tax credit would cover the City’s incremental cost of annexation.”

“The annexation sales tax credit provides the City with greater flexibility to manage expected future fiscal challenges.”

“Over the long-term, annexation would be a fiscally NEUTRAL proposition to the City.”

“Annexation will bring additional capital facility needs and revenues.”

The council will discuss the Berk study on Aug. 15, and then review it in-depth at a special study session on Aug. 22.

City Manager Mike Martin told the B-Town Blog Thursday the report “confirms the fact that an annexation would be right side up financially.

“I think the question that everyone will want answered is, how can this make financial sense for us and not for the city of Seattle? It’s a legitimate question that needs to be explained.”

Monday’s City Council Discussion

When the issue came before the city council at Monday night’s meeting, Councilman Jack Block Jr., who has indicated a general interest in annexing the area, again said he is “concerned about the speed” at which the question is being considered.

“We need to give people time to catch up … I’m not an advocate of procrastination, but they need time to study” the issue.

But, said Councilman Gerald Robison, “this is an important enough decision to discuss it and make a decision. We owe it to our citizens not to delay.” Later, he added, “At some point we have to make a decision.”

“I don’t understand how this council is way ahead of the citizens,” observed Mayor Joan McGilton. “We have had no formal discussion. We have had no financial report. The council is at the same place as the community.

“We’ve got to see the numbers before we make a decision. We’re at that point now … for a discussion.”

Councilman Gordon Shaw noted that “no doubt the community will be engaged on this issue. Even if they don’t agree with the decision, they have to be comfortable that we’ve covered all aspects. We need to work until we get all the issues out.”

Block agreed that the report should not be allowed to gather dust, and it’s time “to start studying” the document.

Seattle, Burien Differences

In his B-Town Blog interview, Martin said differences in the way Seattle and Burien city governments operate help explain why one city apparently can’t afford annexing North Highline, while the other may be able to do so.

The Seattle City Council received a report from the mayor’s budget office in January, stating financial considerations would prohibit that city from annexing the area for a year or two.

In March, the Seattle City Council backed away from annexation, indicating it would not block Burien if the city decided to move forward.

This two-step resulted from a compromise Burien offered Seattle over a year before the city began the process of annexing “south” North Highline.

Burien told Seattle officials then it would not interfere if that city attempted to annex the remaining unincorporated area. Seattle made no subsequent moves toward doing so.

The primary reason Seattle can’t afford North Highline annexation in the foreseeable future, but it may pencil out for Burien, is that “we have a different way of providing services than Seattle,” Martin continued.

“We don’t provide some services that the city of Seattle provides” – including fire, water and sewer, and library services. “Nor do we provide the same level of human services.”

And Burien “just provides some services more efficiently,” for example, police services, he said.

Martin also acknowledged a “perspective” by some opponents of annexation who suggest the Berk study is slanted to support adding North Highline to the city.

But, he said, “I feel that the report definitely is honest and unvarnished. Some things in there speak to concerns that citizens have. I hope they take time to read it and see if it goes a long woy toward allaying their fears.”

Berk Report: a Quick Look

As if addressing their concerns, Berk’s first finding notes that, like most cities, Burien has had declining revenues during the current recession, and has had a 1 percent a year limit placed on its property tax levy growth by Initiative 747.

“Obviously, the challenge for the City is to maintain adequate levels of service without changing tax and fee policies,” the report says. “Regardless of annexation, the City will have to continue to take steps to bring revenues and costs in line in the form of a balanced budget.”

Still, “the annexation sales tax credit” – $5 million a year from the state for 10 years – “provides additional resources to the City….

“In this sense, annexation provides additional general fund revenue to the City during the ten years of the credit, and buffers the City against its pressing fiscal challenges.”

Therefore, Berk projects, “annexation would be a fiscally neutral proposition for the current City … annexation of the area introduces the same level of operating challenges experienced by the current City….

“In other words, addressing the current City fiscal challenges also addresses the fiscal challenges of the annexation area.”

Coming Next: Reaction and a Closer Look

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15 Responses to “Part I: Berk Report On Annexation Indicates Annexation Of North Highline Would “Pencil Out” For Burien”
  1. skeptical says:

    It’s a done deal. Martin decided years ago that he was going to annex White Center. He contracted with Berk Associates to provide the numbers needed for annexation. He will provide the council with “data” that says annexation is best. They will vote for what he suggests, like they’ve always done. Meanwhile, in public, Martin will say, “I’m neutral on this. I only do the bidding of the Council.” Martin is managing the Council, they are not guiding him.

    In the White Center annexation, as with the previous annexation, the existing citizens of Burien will have no say in the final outcome. Whether you believe Martin and Berk Associates, or whether you believe the Seattle assessment that White Center is a financial black hole, your opinion will count for nothing. A citizen of Burien has no power to avoid a financial disaster.

  2. Len Boscarine says:

    You are accusing Mr. Martin of falsifying information and yet you aren’t even willing to give your name. Why should we believe you? I’ve had conversations with him for years and I can’t remember an instance of where he lied to me.

  3. Len Boscarine says:

    I don’t have a problem with someone making charges against someone else. I DO have a problem with someone making charges and hiding their name. To me that seems morally wrong, totally unfair, and un-American. I’m surprised that Scott allows this to happen on the blog. I believe that if you post something on the blog you should be willing to have your name published as well. Otherwise anyone can say anything about anyone, truthful or not, without repercussions.

  4. Get a clue burien city council says:

    The reality is that the city of burien will be dealing with the consequences of annexation long after mike Martin and the city council are gone. Do the numbers pencil out without the subsidy? Absolutely not.

    The subsidy will go away in ten years. In year 11, what happens then.

    It is really simple. Mike Martin would have you believe that the financial burden is better met by 60000 residents of burien versus 400000 residents of Seattle. So that means one of two things or possibly both. Either current city of burien residents will pay way more in taxes than they do now or the city of burien will not be providing much to white center.

  5. mike says:

    Please do not annex white center. I for one do not want the burien city council deciding what we need and raising taxes to get it. They spend money like drunks. They don’t listen to anyone but themselves. Seattle can’t afford us and neither can you. We’re just fine with king county.

    • Burienite says:

      Please ampify your statement that “…they spend money like drunks…” I would like to know specifically HOW they spend money like drunks.

      Burien is one of the few cities that is running pretty efficiently. Yes, all cities are hurting due to the economy, but Burien is doing pretty good compared to others.

      • mike says:

        Street overlays that raised taxes.
        Having two city halls.
        The tax rate is 12.92.
        The new car tax.
        Higher taxes if they annex white center.
        A Towne Center thats mostly empty.

        Is that drunk enough?

  6. TcB says:

    I’m an advocate for this annexation, not a tiredless advocate, but an advocate. I have a reason for believing in the expansion of the city. I realize that taxes may go up and I think if it can be shown that older residents on fixed incomes would be negatively impacted in the extreme, and the City of Burien would make no exceptions for them, I could reconsider. Here’s the thing that I know about corporations and how they chosse to locate. When a large retail organization wants to locate in a city or an area they look at a few factors. They look at population numbers in general (This is where more people in a city benefit, and annexation increases numbers overnight). They look at the OTHER retail corporations who have chosen to locate in the area (an example would be the new Ross, if there are a number of similar retail organizations in an area, then it becomes more favorable to locate there. This is a snowball effect). They look at affluence, or the average income of the citenzenry. Of course there are other things like freeway access, etc. My post doesn’t take everything into account. I’m focusing on the populations size in general. Basically i’m saying that by increasing the city size, we may end up with a more prominent footing with Hotels, Major Retailers, and other companys that bring JOBS. So, increasing the size of the city can bring more taxes but it can also bring more jobs, helping residents get more pay and paying higher taxes. I know this because I have the experience seeing first hand how a major retailer looks at making the decision to invest in moving into a city. I’ve done it. There are other mitigating factors involved but I won’t go into those here. The one argument that is hard to defeat is higher taxes. No one likes higher taxes, no one likes to pay, but they like what taxes pay for. In this case we must be carfeul not to look at a shor sighted argument to kill what can be a benefit for decades to come.

  7. Three Tree Dem says:

    Mike is correct. Nice small town Burien with one of the highest property tax rates in the county and a commercial vacancy rate that will have tumbleweeds rolling down first ave.

    We get what we pay for with our nice well meaning retired unpaid council members enjoying their health coverage. What happen to quality over quantity??? Oh and our over-staffed un-consolidated fire department sucking unnecessary fiscal resources.

    The economy is only going to get worse, much worse and White Center will be our financial undoing. Martin will have his extra income based on damaging growth and the current council members will just scratch their heads…

    So Burien

    • Burienite says:

      Hmm, interesting statement. How exactly is the fire department “over-staffed?” Additionally, how is the fire department “…sucking unnecessary fiscal resources” as you say?

      Clearly you’re unaware that the fire department is NOT a municple fire department and not operated by the city, but rather a fire DISTRICT.

      Waiting for your supporting facts the substantiate your statements….

  8. Chuck says:

    Are there any numbers on the projected sales tax revenue from the Businesses in w/c? There sure seems to be a lot of action in the old Rat City these days.

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