City council members voted unanimously on Thursday to place a measure on the Nov. 4 general election ballot. The annexation, if approved by a simple majority of voters, is set to take effect on Jan. 1, 2016.
The measure would increase taxes in Stanwood. Based on this year's assessments, people would pay 39 cents more per $1,000 assessed property value, according to a city staff report. This amounts to about $97.50 per year on a $250,000 home.
The potential tax hike factors in both a new library tax and reduced city rates.
Annexing into Sno-Isle would create a library tax for people who live in Stanwood, limited to 50 cents per $1,000 assessed property value. However, the overall city tax rate would decrease due to state legislation that caps the post-annexation rate at $3.10 per $1,000 assessed value. Stanwood property owners pay $3.21 per $1,000, so the rate would drop 11 cents.
For the city, this means $70,290 less in annual tax revenue. The decline is more than offset by a potential $289,200 gain.
Stanwood currently pays that much to Sno-Isle as an annual fee for services at the city's library building, which means the dollars come from the city's general tax base rather than a specific library tax. This both limits city funding for other services and puts the library in a precarious position, according to Stanwood officials.
Several cities annexed into Sno-Isle to keep library services while alleviating contract costs during the recession. Lynnwood joined in 2008; Darrington, Lake Stevens and Sultan in 2009; and Langley in 2010. Stanwood is the only city with a library building that continues to contract with Sno-Isle, spokesman Ken Harvey said.
About three quarters of the $218,910 expected to be saved by library annexation is slated to go to road repairs and maintenance. The remainder is meant for police and fire services.
“There's been a chronic shortfall in the street fund,” City Administrator Deborah Knight said. “Our success has kind of been our downfall.”
The only constant revenues for the city's street fund are gas taxes, she said. As vehicles are built to be more fuel efficient and people pay more attention to prices at the pump, revenues have declined.
Stanwood received $148,000 for its street fund in 2014, most of it from gas taxes. The cost for street maintenance -— including staffing, supplies, equipment and electricity for streetlights — is anticipated to be about $312,000 this year.
Recession-based legislation allowed the city to redirect real estate excise taxes, which are meant for new projects, toward street upkeep. It's not a permanent solution, Knight said. The legislation is scheduled to sunset in 2016.
“The city either needs to find a steady source of revenue or cut services,” she said.
Stanwood also has struggled to keep up with police costs.
The city spent an unexpected uptick in revenues from 2013 to catch up on three months of overdue payments, totaling $350,000, for their police contract with the Snohomish County Sheriff's Office, according to a June 5 city staff report. The police contract is set to increase about 6 percent in each of the next two years.
“The key issue is making sure the public knows how the city intends to spend the savings we would get,” Knight said.“The last thing we want to do is surprise people in September and October with information on how their taxes might change.”
If voters choose to annex, they would be able to vote to withdraw anytime after three years. Both the city and Sno-Isle also could agree to de-annex Stanwood in the future.
The Stanwood City Council plans to cast its final vote on the ballot measure July 10, after which it will go to the Sno-Isle Board of Trustees for approval before being shipped to Snohomish County Council for placement on the November ballot.
Kari Bray: 425-339-3439; email@example.com.
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