LETTER: ‘I believe your inaction has caused Burien to become insolvent…’
[EDITOR’S NOTE: The following is a Letter to the Editor, written by a Reader. It does not necessarily reflect the opinion of The B-Town Blog nor its staff:]
Dear Council Members,
I believe your inaction has caused Burien to become insolvent, thus preventing the City from meeting Boundary Review Board obligations to the Residents of Burien and Area X. I have asked the Governor’s Office to assist in placing Burien in Chapter 9 Reorganization to compel you to meet Burien’s corporate Annexation obligations.
Burien’s annexation of Area X incurred specific obligations to the Residents of Burien and Area X.
Bold fonts are highlights from the Boundary Review Board findings: “Findings from the Fiscal Study provide reasonable assurance that available municipal funds, together with regional funds and state funds (e.g., sales taxes available pursuant to SSB 6686, will provide sufficient resources to ensure governance of the North Highline Area “X” and maintain services to the greater City of Burien. The City is committed to taking the necessary steps to govern and serve the North Highline Area “X”.
I believe the following Burien defaults necessitate immediate action:
- Burien does not have the money to maintain City services to the greater City of Burien.
- Burien does not have money to govern Area X.
- Burien has not taken the necessary steps to redevelop Area X.
Berk & Associates Reports
Burien contracted Berk & Associates (B&A) in 2006 to pursue Sales Tax Credit monies. B&A’s 2007 report indicates Burien needs more than Annexation to cover its fiscal shortfalls.
B&A said comprehensive fiscal reform should involve either:
- Voters raising property taxes 3.6% annually to cover Police.
- Retail Activity must increase to cover increasing Police costs.
To date, I see no action on either item. Consequently Burien is experiencing a crime wave precipitated by Council inaction. Five Council Members tacitly or overtly do not support adequate funding of Police presence in Burien. Your personal views on Police are subordinate to Burien’s corporate obligations.
Chapter 9 Reorganization
Your task in Chapter 9 will be correcting the defaults. This is likely to involve raising money for more Police. Failure or refusal to do this will likely bring you before the Bankruptcy Judge.
I recognize and accept many of you are opposed Levying money for more Police. B&A provides an alternative solution: increase revenue through increased Retail Activity to pay for more Officers. This avenue is likely to be more palatable to the Residents and is likely to make meetings less contentious: you will be focused on specific revenue raising measures; instead of petty feuds.
Application of Code
One of the easiest ways to turn Burien around is through the judicious use of Code. In my letter to the Governor I noted several failed attempts to address problems in Area X. These problems are found in pre-annexation Burien too:
- Non-maintained bank foreclosed properties
- Slum Lord dwellings
These problems are destroying Burien’s desirability, thus discouraging more revenue from Retail activities and redevelopment of Area X. The Council examined these issues 8 years ago. It failed then, and continues to refuse to address impediments to a better Burien.
Burien needs $3.7 million dollars annually to fund pre-annexation levels of Public Safety and wean itself off Sales Tax Credit monies that will expire by 2020.
Then and Now
Burien’s population is expanding at ½ of 1% annually. That is significantly lower than neighboring Cities. Why? Crime. People have a choice where they live and shop.
Times have changed since Annexation. The Puget Sound economy is red hot and opportunities exist for Burien to prosper with an expanded Retail Tax Base. Additionally, the redevelopment of Area X will add significant Tax revenues as new people move into the North Highline.
I see your refusal to deal with crime as a dereliction of duty: a breaking of your Oath of Office.
This Council has a reputation for not following through on its commitments. I am going to continue speaking to this issue. If you are one of those Council Members who cannot or will not follow through, I strongly advise you tender your resignation immediately.
– Dick West
PS: Below is the letter to Governor Inslee with supporting documentation:
I believe Burien misrepresented its finances to secure Washington State Sales Tax Credit monies for annexing Area X. Losses to the State of Washington: 6+ million dollars.
Burien’s retail tax base atrophied due to Council neglect, causing ongoing financial trouble. Former Council Members saw Annexation as a cure for Burien’s fiscal problems. Berk & Associates (B&A) were hired to guide the City Council in their pursuit of Sales Tax Credit money.
B&A also believed Burien needed a longer term fiscal solution than Annexation. B&A wanted Burien to ask voters to approve 3.6% annual increases in property taxes and/or Burien to broaden its Retail Sales Tax base for comprehensive fiscal reform.
Burien did neither.
Burien supplied information, through B&A, to the King County Boundary Review Board to affirm:
- Burien was prepared to govern Area X.
- Burien had the financial strength to maintain services for greater Burien.
Both statements are unkept obligations.
Below are the PDF reports Burien used to support Annexation. The reports are chronologically ordered with highlighted passages for easier referencing. Notice how Burien changes the underlying financial assumptions over these 3 years.
Berk & Associates: August 9, 2006
Burien is offering $190 per capita policing for North Highline: same as Burien
Plans for a North Highline Annexation Annexation began in 2004. Burien City Staff developed cost and revenue data to extend equal services to North Highline. B&A extrapolated this data out to 2025.
A North Highline Annexation would double Burien’s population. The $5.9 million policing budget (PDF 1) for North Highline doubles Burien’s Police presence. B&A (PDF 2) validated these estimates as “entirely reasonable” since Burien was offering identical Police and Municipal services to the North Highline area.
The Retail Sales Tax Credit (PDF 3) is intended to create new revenue streams for Burien during and after Annexation. This money is to jump-start the redevelopment of the Northeast Redevelopment Area (NERA), causing the City to prosper on three fronts:
- Money spent on redevelopment is subject to Sales Tax.
- Every $1000 increase in assessed value yields $1.60 per year in property taxes.
- Redevelopment helps increase the population, thus creating more economic activity and Retail Sales Tax collection.
This report raises concerns over King County’s $8.7 million (PDF 4) expenditure for “Sheriff” and “Safety & Justice’ services in North Highline. The Boundary Revue Board requires services to be maintained or increased during an Annexation.
Berk & Associates: May 15, 2007
Sticker shock sets in as revenue sources dry up.
2007 saw housing prices and property taxes peak. However, since 2000, Burien Police costs are increasing 6% annually, while property tax revenues rise 1%. Then, King County delivered a lightening bolt: it wanted $1.7 million dollars (PDF 5) more to maintain existing Police coverage per B&A’s 2007 Annexation Technical Analysis.
B&A 2007 Annexation Technical Analysis proposed two options to cover increasing Police costs:
- Raise property taxes 3.6% annually (PDF 6)
- Increase retail activity for more sales tax revenue
Without a robust Retail Sales Tax base to fall back on, Burien is stuck between a rock and a hard place. The Council didn’t have the political will to ask voters to fund basic services. And, it was disinclined to increase retail activity. Failure to act on problems is a common City Council practice in Burien.
The Summary of Findings (PDF 7) paints a bleak picture of deficits. The B&A report delivers 3 annexation scenarios:
- No Annexation creates the smallest deficit assuming Seattle does not Annex North Highline. 2015 deficit: ($1M) 2025 deficit: ($2.1M)
- Annexation by Burien doubles the No Annexation near term deficit and has the highest long term deficit: 2015 deficit: ($2M) 2025 deficit: ($7.8M)
- Annexation by Seattle creates higher near term deficits and lower long term deficits than a Burien Annexation: 2015 deficit: ($3.4M) 2025 deficit: ($5.6M)
B&A’s Redevelopment Model (PDF 8) shows how redeveloping North Highline could offset these deficits while making Burien financially stronger.
Annexing North Highline gives Burien ~$1.3 million dollars in Sales Tax Credits per year for 10 years. The annual 700K deficits are eliminated and fiscal health restored through redeveloping North Highline while expanding Burien’s retail base.
Berk & Associates: March 24, 2008
Burien slashes policing from $190 to $127 per capita for Area X.
The City chooses a smaller Annexation of the North Highline as property taxes plunge.
B&A evaluates 3 different Annexation scenarios for Area X. Burien picks the riskiest choice: Option 2 requires the most police staffing. Additionally, annexing a smaller population:
- Reduces revenue from the State Sales Tax Credit by half.
- Reduces Police coverage by 34% (PDF 9) for Area X Residents from the 2006 B&A Report (PDF 1).
B&A’s proprietary model for policing compares: housing mix, commercial activities, demographics, etc vs. police staffing. It is based on statistical analysis of police staffing in 170 Washington cities.
Seven years after Annexation, B&A’s additional Police request appears prescient. Burien’s 2006 proposal to have equal services with the North Highline area would have worked better than cutting corners.
Boundary Review Board Findings: April 8, 2009
The Boundary Review Board evaluates Burien’s data and states (PDF 12) :
- Burien has sufficient financial resources to maintain services in Burien.
- Burien is committed to governing North Highline Area X
The Great Recession is underway and Burien is steaming ahead with annexation. I believe Burien is using Area X as a “Municipal Payday Loan” to cover its revenue shortfalls for 10 years.
The 2007 B&A report (PDF 13) states Burien’s financial health looks better in the short term than long term because of the Sales Tax Credit monies.
Council Packet: April 27, 2009
Burien acknowledges financial strain. (PDF 14) Item O: For 2 years, property tax money from Area X cannot be used for Police. Burien is now on the hook for an extra $2.4 million dollars in Police costs, cutting Sales Tax Credit monies by 1/3.
I see Item O as disingenuous. Burien was aware of this issue in B&A’s 2007 Report. (PDF 15) Reporting it after the Boundary Review Board findings raises ethical questions: why did the Council Members opposed to Annexation not act decisively?
Council Packet: January 25, 2010
The City Manager says dedicated policing will change April 1st due to Annexation. (PDF 16) Translated: Police presence will be cut.
The Sales Tax Credit is a quid pro quo obligation: it has expectations and responsibilities. The State expects the Council to redevelop Area X to increase the tax base.
Responsibilities are stated in the Boundary Review Board findings:
- Maintain service levels to greater Burien.
- Burien will take necessary steps to govern and serve Area X
I see Council inaction causing Burien to default on both conditions.
Police cost are rising 6% annually while Police expenditures increase 2%. Something has got to give: Police presence per 1000 Residents will be reduced. The Council authorized Police presence to drop 20% over 4 years.
Officers per 1000 Burien Residents: Source KCSO
Our Police dispatches are rising 5% annually, while our population grows less than ½ of 1% per year.
Annual Burien Police Dispatches: Source KCSO
City Service Levels
Boundary Review Board: “Findings from the fiscal study (PDF 11) provide reasonable assurances that available municipal funds…will provide sufficient resources… and maintain services to the greater City of Burien”.
I think Burien is insolvent when it reduces 3 primary City services:
- Effective Policing
- Maintaining City infrastructure
- Expanding economic activity for revenues
Effective Policing is a proactive stance vs Our reactive Policing mode that is insufficient for the crime wave engulfing Burien. Dispatches for Police service are growing by 1000+ per year, squeezing money fromother vital City services.
Maintaining City infrastructure is impossible without money to pave streets, maintain bridges, etc. The Structural Deficit continues climbing steadily since Annexation, while Burien crumbles before our eyes. Lack of infrastructure maintenance disincentivizes redevelopment, further hammering Burien.
Delaying maintenance is expensive. The corner of 128th Street & 1st Ave South needs its roadbed replaced due to deferred maintenance. The 116th South bridge suffered support damage in a landslide. Burien needs money for its Public Works projects. Funding repairs and maintenance requires ongoing action from the Council. They have not been paying attention.
Expanding economic activities is key to turning Burien around. The 1% property tax lid denies Burien monies needed for the first 2 priorities, thus hampering needed Retail expansion.
I believe Burien’s insolvency is making it impossible to meet its legal obligations to:
- The State of Washington for Sales Tax Credit monies.
- Burien Residents expecting City services to be maintained during annexation.
- Residents of the NERA who are paying higher taxes for services not rendered.
Declining property tax revenue is not a hall pass for Council inaction, rather it is a call for immediate Council action. Revenue remedies exist:
- Minimize impediments to NERA redevelopment through Municipal Code.
- Use Municipal Code to create a retail environment that encourages business growth, bringing people into Burien to shop.
B&A warned Burien of financial danger in 2007 if revenues through taxation or retail expansion were not implemented. This chart (PDF 17) shows Burien slipping into permanent deficits in late 2012. Burien dipped into its rainy day fund for $1.4 million in late 2012.
Our current City Council is acting irresponsibly with its predecessor’s obligations. Responsibility is about fixing the problem as stated in the 2007 B&A Report: increase retail activity and/or property taxes.
I don’t believe Burien was or is prepared to govern Area X.
Boundary Review Board on Area X: “The City is committed to taking the necessary steps to govern and serve the North Highline Area X”. “Necessary steps” requires action; not avoidance.
- Adequate City Staffing for Code enforcement, public works, etc.
- Code to address redevelopment impediments
Redevelopment is a 10 year obligation that doesn’t end when the ballots are counted. Seven years after Annexation, Burien has yet to redevelop Area X. We were promised redevelopment in exchange for higher taxes.
Council Member Tosta’s observations that rundown neighborhoods are a precursor to crime is correct. Issues deterring people moving into the NERA must be addressed before commercial activity in Area X will generate more revenue.
Revitalizing neighborhoods is accomplished by amending the Burien Municipal Code (BMC). Our City Council ignores known problems in Area X, while pocketing money from the State and Area X Residents for redevelopment not yet started.
A few of the NERA issues are:
- Non-maintained Bank foreclosure properties
- Slum Lords
Banks abandoned many foreclosed properties after Annexation. Burien tolerated these blights for 3 years until the State Auditor stepped in. Attached is my letter to Jim Griggs (PDF 18, Hoeun_Tun_Amened_Plan (1) & Hoeun_Tun_Order_Approving_Plan) of the State Auditors Office requesting action. Subsequently, Burien leaned on the Banks to clean up the 8 houses I brought to the attention of the City.
Burien’s enforcement on foreclosed homes is ineffective. BMC Ordinance 561, passed in 2012, identifies Banks as the “responsible party” with foreclosed properties. What it doesn’t say is what they are responsible for. The Council is aware of this omission and does nothing, perpetuating blights and hindering redevelopment.
Slum Lord dwellings are eyesores. In 2009, prior to annexation, Burien examined ways to cleanup rental properties plaguing the NERA. Following their examination they did nothing and the problem didn’t go away. Slum Lord dwellings continue corroding property values in the NERA, impeding redevelopment.
Gangs are the symptoms of Council inaction. In 2009, the Burien City Council looked at other local Cities’ action with regards to gangs. They took no action.
Prior to annexation, gangs were not a problem in the NERA. Due to under-capitalization, Burien chopped Police presence in 2010. This red carpet invitation to Gangs is hampering redevelopment.
I believe the Burien City Council defaulted on its governance obligations to Area X.
- Area Y annexation resoundingly defeated.
- Burien dipping into its “rainy day fund”.
Both annexation fiascoes were avoidable. Two current Council Members were uniquely positioned to stop these annexations, yet they appeared to do nothing.
In 2009, Council Member Krakowiak could have contacted the Boundary Review Board, the Legislature, or the State Auditors Office showing Burien was financially unfit to fulfill its annexation responsibilities for Area X. It appears she didn’t contact anyone.
In 2012, Council Members Edgar and Krakowiak could have contacted the various State agencies showing Burien was insolvent (Burien dipped into its Rainy Day Fund in 2012) and would not be able to meet its Area Y responsibilities. Once again, it appears neither one contacted appropriate State personnel.<
Additionally, both could have pointed out that the Berk Reports of 2007, 2008 and 2009 were “last modified on 06-23-11”. Why were they modified? Did they contact anyone about these irregularities?
These two Council Members may blame City Manager Martin for not providing Quarterly Reports of Status to the City Council. If they raise this issue, why didn’t they contact Jim Griggs at the State Auditors Office to enforce RCW 35A.33.140?
Ineffective action is the hallmark of these two Council Members. They are now leaders of the Council and their incompetence is making Burien unsafe.
Like a wildfire, Gangs and criminal activities are spreading through the City. Burien is now 5th from the bottom in crime statistics in Washington State.
On August 1, 2016 City Manager Gurol proposed adding two more Officers. After 58 minutes of discussion Council Members agreed to put this issue on the August 22nd Business Agenda. Council Members are seen asking for this item to be on the next Business Agenda. 2 minute video:
Yet, by August 22nd adding more Police are struck from the Business Agenda. I see deleting this item as consistent with the Burien City Council’s attitude toward City service requirements of its Annexation responsibilities. They want the money from Area X and the State, yet don’t render services paid for.
Payday Loans often create more problems than they solve. On November 11, 2016 Finance Director Krause shared that when the Sales Tax Credit expires Burien will not be able to fund Capital Improvement Projects without service cuts elsewhere. 30 second Video:
Redeveloping neighborhoods brings new residents and revenues to Seattle like Burien is expecting from the NERA.
Seattle is expanding its housing inventory to encourage job growth and business formation by redeveloping:
- MLK Way and the Rainier Valley.
- Delridge Way and West Seattle.
These two redevelopments will connect with Area X in 2020. Area X can be a springboard for new Burien revenue when the City Council begins redevelopment.
First, crime and quality of life issues must be dealt with using Code: people want to live in safe neighborhoods.
Enforcing these Codes to address underlying problems is the second step. Giving the City Manager tools to cleanup redevelopment impediments is inexpensive.
I see Annexation and the State Sales Tax Credit as corporate responsibilities akin to a Bank loan. The current Council does not appear interested in meeting its corporate obligations.
I see the State and Burien Residents having mutual interests: we all want a successful annexation.
I am asking your Office to assist in Burien’s annual April audit. Your agencies with detective capabilities, computer forensic skills and the ability to compel testimony will assist in answering the following:
- Was Burien financially capable of meeting its Annexation obligations when it petitioned the Boundary Revue Board in 2009 and 2012?
- Are Utility and Property tax monies (PDF 19) of Area X subsidizing other areas of Burien?
- Does Burien’s handling of Redevelopment of Area X meet State expectations?
- If not, what measures need to be implemented?
Burien’s ability to account for Sales Tax Credit monies being spent in Area X is one part of the annexation equation. The other is actually redeveloping the region for more revenue.
Council videos, Packets, and Executive Meeting minutes can shine a light on Council intentions. The Mayor and Deputy Mayor should be able to show Public Records that support Burien’s compliance with its Annexation obligations.
I am requesting an Involuntary Chapter 9 Reorganization of the City of Burien. The City doesn’t have monies to meet Governance requirements of Area X. It has not maintained City services to greater Burien. The Burien City Council’s failure to act is financially damaging Our City.
An appropriate remedy will bring Burien Police presence back to 1.29 Officers per 1000 Burien Residents. This adds 16 more Officers. This will cost ~$3 million dollars per year. The Council must raise another $700K to offset expiring monies from the State Sales Tax Credit.
A $3.7 million dollar increase in annual revenue will transform Burien. Burien will become safe and the NERA will shine adding tremendous revenue as it connects to Seattle’s growth.
I believe the Governor’s Office involvement in this matter will be viewed positively. People and businesses will have confidence and move into Burien, thus creating more revenue and shortening the time Burien spends in Chapter 9 reorganization.
Thank you in advance for your time.
– Dick West
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