Burien Councilmembers Set To Discuss Revised Berk Report On Annexation
Burien City Council members will get their first chance at Monday’s meeting (Aug. 15) to discuss a new report on the financial impacts of annexing the remaining North Highline unincorporated area.
That study, prepared for the city by Berk Consulting, was ready for presentation to lawmakers only just before the Aug. 1 meeting. They decided to consider the report at Monday’s meeting, then take a closer look at a special study session Aug. 22.
But the document before the council is a newly revised draft that now includes an analysis of differences between a 2011 Seattle report on annexing the unincorporated area and the Berk report findings.
Representatives from Berk and city staff will give the council a detailed report and answer questions during the discussion. City staff will also present crime statistics that relate to North Highline annexation.
The updated study can be downloaded from the Burien website here (PDF file).
“The City of Seattle report estimates that annexation would require expenditures increases of about $19.2 million to $28.7 million annually, compared to increases of $7.1 million to $9.8 million annually for the City of Burien,” Berk notes.
“The Seattle report also estimates that annexation would generate $11.9 million to $17.4 million in additional revenues, compared to $9.1 million to $12 million for the City of Burien.
“While each city levies the same four major general fund taxes (e.g., property tax, sales tax, utility taxes and business and occupation taxes),” Berk found that “keen differences exist in the rates applied,” which “yields greater amounts of tax revenues for Seattle.”
For example, Seattle’s 2011 regular levy rate is $1.87; Burien’s is $1.56. “This does not include any of the excess levies that would be raised from Seattle…. Currently, Burien does not levy any special excess levies.”
Burien’s business and occupation (B&O) tax rate is significantly lower than Seattle’s, and “Seattle also levies more and higher utility taxes than the City of Burien.”
The new Berk study – the consultants also prepared an annexation analysis for the city in 2011 – “estimates an ongoing operating surplus [for Burien] of $2 to $2.7 million annually due to the annexation sales tax credit [authorized by the Legislature] until its expiration in 2023.
By contrast, the Seattle study projected that “even under the best-case scenario of high revenues and low expenditures, the annexation area would have an annual net operating deficit of about $1.7 million … [and] may range up to $16.7 million per year under a worst-case scenario.”
Berk reports “the largest differentiator between the Seattle and Burien studies is the scope of services offered and revenues generated by each respective city” in the annexation area.
Seattle provides its own fire and emergency medical services, while in North Highline these would continue to be provided by Fire District 11. Fire/EMS services in Burien are provided by two independent fire districts.
Seattle also provides its own police services; “Burien would continue to provide public safety services through contract with the King County Sheriff’s Office.
Burien would add the equivalent of about 24 full-time police officers if it annexes the unincorporated area; Seattle would add the equivalent of 53 to 66 positions.
“It is important to note why there is a large difference between the two staffing estimates,” Berk says. For Burien, its contract with the sheriff’s office “provides economies of scale in both supervision and related indirect costs” by allowing the city to share these costs with other contract cities.
Library services in Seattle are provided by the city, while libraries in Burien and North Highline are operated by the King County Library System, another independent taxing district.
And Seattle “has large Human Services programs … where the City of Burien is much smaller,” with about 1 percent of its general fund budget going to human services.
The original draft report submitted to the city by Berk 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.”
REPORTER’S NOTE: A planned follow-up to the first story on the current Berk report was delayed pending this anticipated update, which was posted on the Burien website Friday. Stay tuned for that follow-up after a report on Monday’s council meeting.