EVERETT — In the end, the numbers simply didn’t add up.
The City Council on Wednesday unanimously voted to abandon a plan to invite thousands of people who live east of Silver Lake to join the city through Everett’s biggest annexation ever.
“It was ultimately the sound decision,” said Councilman Drew Nielson, who along with Councilwoman Brenda Stonecipher opposed the annexation since the October release of a consultant’s study on the proposal.
The vote follows additional analysis of the consultant’s revenue projections for the annexation area. The city’s finance department determined that under current economic conditions, the consultant’s revenue estimates in its October fiscal study were too optimistic.
In November, the council voted 4-2 to pay up to $50,000 for further analysis, outreach and polling in the proposed annexation area.
By bringing about 12,500 people into the city fold, Everett could have qualified for a 10-year state sales tax rebate potentially worth tens of millions of dollars.
But the state incentive — aimed at encouraging cities to absorb large urban neighborhoods on their peripheries and implement the intent of the Growth Management Act — fell far short of the city’s expense to serve the residential neighborhoods, according to the city’s analysis.
Even with the tax rebate, the area likely would have run up deficits — costing taxpayers more than $30 million over 15 years, according to one council member’s analysis.
Part of the problem is the proposed annexation area was almost exclusively residential land.
Residential neighborhoods typically cost the city more to serve and provide less in taxes than industrial and commercial areas. In many cases, police, fire and other city services in residential neighborhoods are subsidized by other revenue sources.
A 2001 voter initiative in Washington limits annual increases in property tax revenue to 1 percent, which has been outpaced by the city’s cost of doing business.
That means cities have to rely less on property taxes to fund services and more on business, sales and other taxes. All of that makes residential areas less attractive to annex.
The city last year paid the Seattle consulting firm Berk &Associates up to $84,000 to determine if annexation made sense.
It created a report to analyze various options. The City Council whittled those down from a jumbo annexation of 62,000 people along the city’s entire southern fringe to a single option of a few neighborhoods east of I-5 from Everett Mall and east of Silver Lake.
Reporter David Chircop: 425-339-3429 or dchircop@heraldnet.com.
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