Loading...
Incorporation Study Dec 2001 Spokane Valley Incorporation Study Bob Noack Summary Interim Finance Director City,of Spokane Valley Updated December 2001 11797 East Sprague Avenue, #106 Spokane Valley, WA 99206 City of Spokane Valley 509-921-1000 City Hall N 509-9211008 Fax The new City of Spokane Valley is bounded on the west by the City of Spokane_and on the east by Hodges Road approximately one-half mile ease of the newly formed City of Liberty Lake (Map 11). The proposed City's current estimated population is 80,700 and is projected to grow to a population of 89,425 in ten years. The new city boundaries encompass about thirty-eight square miles. Type of Government The type of government selected for the new city is classified as a non-charter code city. Code cities follow the Optional Municipal Code (RCW 35A) with the essential difference between a charter and non-charter code city is that a charter code city can provide for an individualized plan of government with a unique administrative structure, whereas a non- charter code city must choose one of the forms of government provided and are governed by statutory provisions, Form of Government The City of Spokane Valley will have a council-manager form of government. This form of government has seven council members elected by the voters. Either the council may elect a council member to serve as mayor and chair of the council or the city council may, by resolution, submit a proposition to the voters to designate the person elected to council position "one" as the chair of the council. If the proposition is approved, at all subsequent general elections, the person elected to position one becomes council chair and the city's mayor. Because the "mayor" continues to be a council member, however, the only elective position under a council-manager form remains that of council member. The elected officials must be residents of the city for one year and are elected for a four- year term. Until a salary ordinance is passed, the salaries are restricted to $500 per month plus expenses for the Mayor and $400 per month plus expenses for the council members. The council appoints a person to the position of"city manager". The city manager is the Chief Executive Officer of the city and the head of the administrative branch of the city's government. Appointments of all department heads, officers, and employees are made by the city manager. Under a council-manager form of government, two positions must be appointed by the council: City Clerk and Chief Law Enforcement Officer. Legal Counsel must be provided for either by appointment or by contract. 1 Washington State Boundary Review Board for Spokane County December 2001 Background of Spokane Valley Incorporation Government alternatives for the Spokane Valley have been proposed and discussed for many years, dating back to the 1950s. In the late 1970s, there were a number of Valley residents who began to look at the issue of incorporation as a means for self-government. In 1984, the Spokane Valley Chamber of Commerce published Directions for Tomorrow: Local Government in the Spokane Valley on local government options for Valley residents. Table 1: Comparison of Past Incorporation Proposals = 199Oij L7iT.Wie 1995 42�D�Y Land Area (square mites) _ 55 75 50 33 38 Population 78,200 91,200 76,700 64,800 80,700 Housing Units 32,349 34,992 30,929 25,600 32,280 Population Density (persons/sq mi) 1,422 1,216 1,534 1,963 2,124 Taxable Assessed Value (million) $2,160.0 $2,364.3 $2,096.6 $2,500.3 $3,952.5 1987 Spokane Valley Incorporation Proposal In 1985, the Committee for Incorporation was formed and proposed the incorporation of the City of Spokane Valley as a new city in Spokane County. A Notice of Intention to incorporate the Spokane Valley was submitted to and subsequently filed by the Washington State Boundary Review Board for Spokane County on July 3, 1985. On November 9, 1985, following a series of public hearings on the proposal, the Board approved the proposal with modified boundaries. Before the incorporation proposal was placed on the ballot, the Board's decision was challenged in Spokane County Superior Court by a consortium of affected entities. One of the principal reasons for the suit was the consortium's claim that the Board had reached its decision without sufficient information, particularly financial information. On September 22, 1986, the Court found in favor of the consortium, remanding the issue back to the Boundary Review Board for further consideration. A report entitled Fiscal and Service Analysis of the Proposed City of Spokane Valley was then prepared. Following publication of this document in September 1987, the Board held three public hearings in the Spokane Valley. After reviewing the report and considering the factors and objectives of the state law for Boundary Review Boards, the Board voted to deny the proposal on December 9, 1987. 1990 City of Chief Joseph Proposal In February 1990, a Notice of Intention for incorporation of the Spokane Valley as the City of Chief Joseph was submitted to the Washington State Boundary Review Board for Spokane County. The Boundary Review Board filed the Notice of Intention on March 9, 1990. A report entitled Chief Joseph Incorporation Study was prepared and published in July 1990. After four public hearings on the incorporation, the Boundary Review Board deliberated on the proposal and recommended against the incorporation. The state law had changed and Boundary Review Boards could no longer deny a proposal if the population was over 7,500; the Board's decision was limited to approve as submitted, modify the proposal by up to ten percent of the land area, or recommend against the proposal. With the change in the state 2 Washington State Boundary Review Board for Spokane County December 2001 law, even though the Board recommended against the proposal, the incorporation was placed on the ballot. The issue was brought to an election in November 1990 and was defeated by a large margin. It needed a simple majority to pass but received only 34 percent of the vote. State law requires that if an incorporation ballot receives less than 40 percent of the vote, three years must elapse before an incorporation may be placed on the ballot again. November 1993 was the earliest that the incorporation could be placed on the ballot. 1993 Spokane Valley Incorporation Proposal Proponents for the Spokane Valley incorporation continued their efforts and a petition was circulated in early 1993 for another proposal to incorporate. In the proposal, the boundaries encompassed less land area and a smaller population. The Boundary Review Board held several public hearings and after deliberation, again recommended to deny the proposal because of the large amount of rural land included. The Board's decision was appealed because a request for modification to exclude the Kaiser and Spokane Industrial Park property was not approved. Both the Superior Court and later the Court of Appeals upheld the Board's decision and the matter went on the ballot in April 1994. The proposal was defeated but received 44 percent of the vote so that the matter could be placed on the ballot without any time restrictions. 1995 Spokane Valley Incorporation Proposal Inspired by the 1993 election results, the proponents again initiated the incorporation process. A Notice of Intention for the incorporation was filed on January 12, 1995. The Boundary Review Board held a public hearing on the proposal on February 13, 1995. The matter was placed on the ballot in May of 1995 and was again defeated at the polls. The vote for incorporation was greater than forty percent in favor, which enabled the proposal to go on the ballot the following year. 1996 Cities of Opportunity and Evergreen Proposals Immediately after the 1995 election, proposals to incorporate five separate.cities in the Spokane Valley were filed with the County. Proponents of two of the five cities submitted petitions in a timely manner and the petitions were certified by the County Auditor. The proposed cities of Opportunity and Evergreen were scheduled for public hearings before the Boundary Review Board on February 26th and 29th, 1996, respectively. The incorporations went to the voters, but received less than forty percent of the vote, preventing another election for three years. 2000 City of Liberty Lake Proponents for Spokane Valley incorporation had in the past included the Liberty Lake community within its incorporation boundaries. In 1999, a committee was formed to look at governance options for the Liberty Lake community. An incorporation of the area was proposed in early 2000; was placed on the ballot in November 2000; and was approved by the voters. The official incorporation date for the new City of Liberty Lake will be August 31, 2001. 3 Washington State Boundary Review Board for Spokane County December 2001 Existing Conditions in the Spokane Valley Population The estimated 2002 population for the proposed City of Spokane Valley is 80,700 people. There are approximately 32,280 residential units. These numbers are based upon the 2000 U.S. Census data updated with Spokane County residential building permit information from April 2000-2001. The population density for the new city would be 2,124 people per square mile based on a land area of 38 square mites. The tables are based on 2000 Census data for each city and show how the new city would compare to other cities in Spokane County and Washington. Table 3: Population Density of Spokane County Cities (2000) _ t Narnemof Cit_1 ?-KO PoRulatrann-.Area -.__S Density Spokane 195,629 59 3,315/sq mi Spokane Valley 80,700* 45 2,124/sq mi Cheney 8,832 4 2,154/sq mi Airway Heights 4,500 5 900/sq.mi Medical Lake 3,758 4 1,043/sq mi Deer Park 3,017 6 479/sq mi Millwood 1,649 1 2,356/sq mi *2001 population estimate When analyzing population density, it is important to realize that concentrated development can lead to greater efficiency, reduced fiscal and social costs, and potentially a better quality of life. Population density can also be used to identify areas that are urban character. Out of the twelve cities on the table below, the proposed City of Spokane Valley has the lowest population density. Table 4: Population Density of Washington Cities over 50,000 I�me_o# Shoreline 53,025 12 4,418/sq mi Tacoma 193,556 49 3,942/sq mi Federal Way 83,259 21 3,927/sq mi Bellevue 109,569 31 3,534/sq mi Spokane 195,629 59 3,315/sq mi Everett 91,488 28 3,279/sq mi Vancouver 143,560 44 3,240/sq mi Lakewood 58,211 19 3,063/sq mi Yakima 71,845 26 2,763/sq mi Kent 79,524 29 2,704/sq mi Bellingham 67,171 25 2,686/sq mi Kennewick 54,693 25 2,187/sq mi Spokane Valley 80,700 38 2,124/sq mi 4 Washington State Boundary Review Board for Spokane County December 2001 Projecting population growth into the future is exceedingly speculative and can be particularly complicated considering all the potential constraints that could be imposed on future growth. In order to estimate growth within the boundaries of proposed City of Spokane Valley; the total population growth from 1990 to 2000 (9.7%) was continued to 2010. Population projections for Spokane County and the City of Spokane were estimated as a part of the growth management planning process. For the table below, the 1990-2000 population growth rate was continued to 2010. Table 5: 10-year Population Projection for the Spokane Valley Incorporation Area WOW 2000 °fo ChangI—2x10 Spokane County 361,333 417,939 13.5 F 453,881 Unincorporated Area 165,443 199,135 16.9 232,788 Incorporated Area 195,890 218,804 10.5 221,093 City of Spokane 177,165 195,629 9.4 214,018 Spokane Valley Incorporation Area 71,081 80,700 9.7 89,425 Assessed Valuation The proposed city has an estimated 2001 assessed value of real property of $3,952,562,092 This estimate of value is for taxable regular value and includes a component for personal property and state assessed value and excludes certain taxable value exemptions. Table 6 compares assessed valuation and per capita assessed value to Washington cities with populations of 50,000 or more. Table 6: Per Capita Assessed Value of Washington Cities over 50,000 �a�re.ofrCity�Y_Assessetl Valua��_,� �e�Ca�it�As�essed Valve_ �- Bellevue $14,980,866,542 $136,725 Kent $6,468,268,324 $81,337 Everett $7,183,712,229 $78,521 Shoreline $3,708,147,323 $69,932 Vancouver $8,479,116,092 $59,063 Bellingham $3,932,604,474 $58,546 Federal Way $4,717,399,199 $56,659 Lakewood $2,968,214,814 $50,990 Tacoma $9,847,273,062 $50,875 Spokane Valley $3,952,562,092 $48,978 _ Spokane $8,461,699,950 $43,254 Yakima $3,076,532,870 $42,822 Kennewick $2,261,626,148 $41,350 Land Use The Spokane Valley incorporation area contains a typical mix of urban land uses as well as rural and suburban uses (Map 5). Urban land uses in the Valley consist of single and multi- family dwellings; recreational areas; light manufacturing; commercial, including many retail 5 Washington State Boundary Review Board for Spokane County December 2001 • stores; professional office buildings; business parks; schools; and undeveloped land suitable for residential, commercial and industrial growth. Rural and suburban land uses include low density residential and agriculture. The land use inventory information was compiled using aerial photos, windshield surveys, and parcel data from the Spokane County Assessor's Office. In order to make better use of the data, smaller areas within the incorporation boundaries were identified. These were based upon the responses to the Valley Survey questions on community identity and on observable physical and cultural features. Spokane Valley Community Views Survey of Residents: At the onset of the Spokane Valley Incorporation Study, a survey of Spokane Valley residents was conducted with the cooperation of the Spokesman Review newspaper. The survey attempted to identify Valley residents' satisfaction with existing service providers, service levels, community identity, and governance options. The results were used in determining staffing levels for a new city, assumptions for service providers, boundaries of neighborhoods and communities within the Valley, and priorities of residents for future capital projects. The survey was prepared by the Incorporation Study staff and published in the Valley Voice edition of the Spokesman Review in November 2000. Five hundred responses were received and the results were compiled and analyzed as shown on Table 8 on the following page. A score of I indicates a high level of satisfaction with the service provided; a score of 2 indicates an acceptable level; and a score of 3 indicates that residents are unsatisfied with the service provided. Open-Ended Questions In addition to the quantifiable responses on the survey, open-ended questions were asked regarding the most positive change in the Valley, most negative change, and biggest concern with the development of the Valley. Some of the responses from the survey are summarized below: What do you think has been the most positive change in the Spokane Valley? By a large majority, citizens listed investment in roads,with new additions and improvements to the freeway and road system, as the most positive change in the Spokane Valley. Over one hundred respondents noted the freeway improvements and widening of I-90, and the new Evergreen Road Exchange.Additional new roads were mentioned by over ninety citizens, who listed both the Valley Couplet and the Argonne railroad overpass at Trent Road as important projects. Business and commercial growth received the second largest response as being a positive change in the Spokane Valley. Although most mentioned the Spokane Valley Mall, others mentioned various new commercial developments that have brought businesses and services that they no longer have to go to Spokane to find. Citing their pleasure in maintaining natural areas, a few people mentioned the development of the Dishman Hills Natural Area and the Mirabeau Point area as positive developments for the 6 Washington State Boundary Review Board for Spokane County December 2001 Valley. Others indicated the recreational facilities created by the construction of the Centennial Trail and the Mirabeau Point/YMCA complex were their picks for the most positive changes. Table 8: Spokane Valley Survey Results Transportation Traffic Movement X Public Transit Service _ X Sidewalks X Bike and Pedestrian Trails X Pedestrian Access to Schools X Planning and Land Use Quality of Planning for Growth X Land Use Regulations X Enforcement of Zoning Violations X Quality of New Development X Land Use Decision-making Process X Sign and Billboard Regulations X Environment Noise Levels X Visual and Aesthetic Quality X Air Quality X Protection of Natural Areas X Protection of Shorelines X Sense of Community Community Events and Gatherings X Employment Opportunities X Arts and Cultural Events X Preservation of Historic Sites/Buildings X Parks and Open Space Availability of Parks/Open Space X Quality of Parks and Open Space X Quality of Recreation Facilities X Public Safety Enforcement of Safe Traffic Speeds X Fire Protection X Sheriff Response Time X Safe to Walk in your Neighborhood X Neighborhood Crime Rate X Animal Control X Utility Services Sewer Service and Availability X Water Service X Garbage Service X Street Cleaning X Snow Removal X Street Repair and Maintenance X Street Lighting X Stormwater Control/Flooding X Community Services Library Services and Facilities X Shopping X Schools X 7 Washington State Boundary Review Board for Spokane County December 2001 - -- Nearly fifty respondents listed sewer construction as a slow, but positive development. A few mentioned improvements in other services, such as police or fire, but the availability of medical services did receive a few positive responses, Government was mentioned several times as bringing positive changes to the Valley. Some mentioned their satisfaction with the fiscal responsibility shown by the current County Commissioners. What do you think has been the most negative change in the Spokane Valley? Overwhelmingly,respondents to the survey listed uncontrolled and poorly managed business, commercial and residential growth, and the resultant traffic problems they have caused, as the most negative change in the Spokane Valley. Many residents expressed their discouragement concerning the continued lack of use of the University City Mall and the closure of dozens of businesses along the Sprague corridor. The proliferation of new businesses and strip malls being built, while dozens of commercial and retail stores remain vacant, was viewed by some as leading to urban sprawl. A few residents surveyed indicated that rapid growth has brought increased crime, heavy traffic, poor air quality, loss of natural habitat and a reduced quality of life to them. They expressed their displeasure with the small, clustered, gated developments, too many apartment complexes, and the small lot size in new subdivisions. Other respondents mentioned environmental concerns, such as not enough protection for the aquifer and danger to the river from pollution and increased shoreline building. Loss of natural habitat with resultant negative effects on wildlife and quality of life was a concern expressed by others. Do you feel a sense of community in the Spokane Valley? Although greatly outnumbered, a few residents felt positive about their sense of community, either through their schools or community events. Valleyfeet, a fall community event, was listed by many as giving a sense of conununity. Others mentioned the Dishman Hills Association, the Centennial Trail, the Mirabeau Point/YMCA complex and the Spokane Valley Mall as providing new ties for Valley residents and offering great hope for future cultural events. Those few positives aside, the overwhelming majority of Spokane Valleyites responded that they do not feel a sense of community. While a few voiced the opinion that they relate to Spokane County,many others felt they are a part of the City of Spokane. Still others revealed that although they do not feel they are affiliated with Spokane, they believe they have to go into the City of Spokane to find any cultural opportunities. Rather than feeling part of another larger community, a few responding felt that a cohesive, community-defining element is missing in the Spokane Valley. Some reasons proposed for this deficiency in sense of community included: lack of a civic center and other meeting places,lack of events, both community and cultural, and lack of communication about community and cultural events. 8 Washington State Boundary Review Board for Spokane County December 2001 Steering Committee The Incorporation Study team selected Spokane Valley residents who indicated on the survey a willingness to participate to a Spokane Valley Incorporation Study Steering Committee. The Steering Committee included a mix of residents from eighteen to over sixty-five, men and women, living in all areas of the Valley, and not having been involved in incorporation efforts in the past. Fifteen members were originally included and, in addition, the incorporation proponent and the chair of the Spokane Valley Chamber of Commerce Governance Committee were included. The Steering Committee met five times from January 2001 through June 2001 and reviewed preliminary budget proposals, staffing levels, potential revenue sources, and community identification. Based upon the comments and suggestions, the staff formulated assumptions for a new city budget, acceptable levels of taxation, and service providers. MUNICIPAL SERVICES The proposed incorporation area is served by a large number of public agencies and private companies. In addition to the services provided by county, federal and state agencies, there are various local taxing districts that have jurisdiction within this area. These governmental units are: Spokane County: Within general government are the legislative, administrative, budget and support services. Judicial and legal include the district courts, superior courts, prosecutor's office, and public defender's office. The public safety function of Spokane County includes the Sheriff's department, corrections, probation, and jail. Other departments within the County include planning; building and code enforcement; hearing examiner; parks, recreation and fairgrounds; animal control; noxious weed control; geographic information services; community development; and public works including engineering, wastewater management, solid waste management, stormwater management, and transportation. City of Spokane: Water and sewer service and wastewater treatment. Special Purpose Districts: Fire Protection: Spokane County Fire District 1 Schools: Central Valley School District No. 356 East Valley School District No. 361 West Valley School District No. 363 Spokane School District No. 81 • Library: Spokane County Library District Water Purveyors: Consolidated Irrigation District No. 19 Vera Irrigation District No. 15 Trentwood Irrigation District No. 3 9 Washington State Boundary Review Board for Spokane County December 2001 Model Irrigation District No. 18 Carnhope Irrigation District No. 7 Hutchinson Irrigation District No. 16 Orchard Avenue Irrigation District No. 6 Pasadena Park Irrigation District No. 17 Spokane County Water District No. 3 Irvin Water District No. 6 East Spokane Water District No. 1 Solid Waste Collection: Waste Management of Spokane Private Water Purveyors: Modern Electric Company Holiday Trailer Court Hutton Settlement Pinecroft Mobile Home Park Kaiser-Trentwood Spokane Industrial Park County-wide Authorities: Spokane Transit Authority Spokane Regional Transportation Council Spokane County Health District Spokane County Air Pollution Control Authority Noxious Weed Control Board State of Washington: Washington State Patrol Washington State Department of Transportation The services provided by these entities are normally referred to as "municipal", that is, they are usually performed by a city within a city's jurisdictional boundaries. Cities require that these services be provided at a higher level than rural areas. Law enforcement would be an example of a municipal service now being provided to the Spokane Valley by the County. County services such as the Coroner, Auditor, Assessor, Treasurer, Superior Court, Prosecutor, Public Defender, and District Courts are performed county-wide in both incorporated and unincorporated and are therefore considered "non-municipal". These services will not be affected to the same degree as municipal services. The provision of educational services is another non-municipal service that will not be directly affected by incorporation of a new city. 10 Washington State Boundary Review Board for Spokane County December 2001 REVENUE AND EXPENDITURE ANALYSIS New City Expenditures Based upon the description of each municipal service in Part III, an example of a new city budget was developed. The following section represents an allocation of resources to specific functions to provide the basic municipal services to the new city during the first full year of operations using 2001 costs as a base. There are many options available both as to who provides the service and also as to the way the services are organized. This budget is provided as an example. The ultimate decision as to the types of service provided, the levels of service and the choice of service provider for each function will depend on the priorities established by the new city council. The hypothetical budget that has been created was done using conservative amounts for both revenues (low) and expenditures (high) in order to test the financial feasibility of the incorporation. The expenditure budget is divided into two sections, the first are departments, which would be created and staffed by city employees, and the second group is services that by their nature may require substantial study or capital outlay to provide internally. Many newly incorporated cities have contracted with the county in which they are located to provide these services; some cities continue to contract for services while others have decided after a period of years to bring some service in-house. This budget proposes contracting with Spokane County for these services. In compiling this budget many resources were used including budgets from other Washington cities of similar size including Federal Way, Kent, Everett, Bellevue, Yakima, Lakewood, Vancouver, and Spokane to analyze costs of providing service including staffing levels along with the overall scope of services provided. Spokane County departments were interviewed extensively to determine the cost of service currently being provided to the area to be incorporated. It became apparent that most departments other than the Road Department, County Jail and the Sewer Utility did not have the capability to unit cost their service to a specific area within the County. Therefore, many departmental costs are estimates of the percentage of resources allocated to the area. There is now an effort within the County to develop methodologies to more accurately track the expenditure of resources on a geographic basis and data should be available if and when the new city desires to negotiate for services with the County. Table 13, on the following page, is an example of a new city budget. 11 Washington State Boundary Review Board for Spokane County December 2001 Table 13: New City Budget Mayor/Council $150,842 $156,455 City Manager $281,919 $298,564 City Clerk $160,062 $169,396 City Attorney/Prosecutor $510,128 $540,016 Human Resources/Risk Management $303,477 $321,416 Finance $482,205 $510,417 Planning $481,669 $509,849 Information Services $377,885 $400,018 Temporary Help $91,250 $93,988 General Administrative $236,845 $251,056 Total City Departments $3,076,282 $3,251,173 Municipal/District Court $1,792,732 $1,900,296 Probation $276,682 $293,283 Public Defender $463,413 $491,218 Sheriff $12,236,273 $12,970,449 Corrections (Geiger) $1,223,539 $1,296,951 Jail $997,831 $1,057,701 Animal Control $284,887 $301,980 Engineering Administration $3,063,000 $3,246,780 Street Maintenance $4,065,250 $4,309,165 Sewer Connection Subsidy $2,960,000 $2,960,000 Building and Code Enforcement $805,401 $853,725 Hearing Examiner $81,529 $86,421 Parks $891,964 $945,482 GIS $70,318 $74,537 Total Contracted Services $29,212,319 $30,787,988 SCAPCA $135,000 $143,100 State DOT $300,000 $318,0b0 Total Other Services $435,000 $461,100 Total City Budget $32,724,101 $34,500,262 12 December 2001 Washington State Boundary Review Board for Spokane County City Revenues The financial and tax information presented below is intended to provide the types of revenue sources available to new cities and estimates of the amount that could be generated from each source. If projected expenditures are less than revenues currently generated in the new city boundaries, additional revenue sources will not be assumed. However, if projected expenditures are greater than the amount of revenue currently generated in the new city boundaries, additional revenue sources will be needed to balance the new city budget. Table 14: Revenues Available to the New City R'evenue-Source _ -2 1_ x2002 - _ _m 2003` i_ DO!� X2,005 _ Property Taxes $6,340,168 $6,521,970 $6,705,589 $6,891,045 $7,078,356 Sales Tax $14,311,514 $14,669,302 $15,256,074 $15,866,317 $16,500,970 Criminal Justice $1,036,694 $1,078,162 $1,121,288 $1,166,140 $1,212,785 Franchise Fees $385,000 $404,250 $424,463 $445,686 $467,970 Gambling Taxes $875,000 $875,000 $875,000 $875,000 $875,000 Admissions Tax $100,000 $100,000 $100,000 $100,000 $100,000 Building Permits $894,890 $939,634 - $986,616 $1,035,947 $1,087,744 Planning Fees $125,000 $125,000 $125,000 $125,000 $125,000 State-shared Revenues $2,099,007 $2,119,157 $2,139,501 $2,160,041 $2,180,777 Grants $100,000 $100,000 $100,000 Fines and Forfeits $1,501,575 $1,516,591 $1,531,757 $1,547,074 $1,562,545 Interest Earnings $175,000 $180,250 $185,658 $191,227 $196,964 Total Revenues $27,668,847 $28,449,065 $29,365,288 $30,312,249 $31,191,146 Hotel/M otel Tax $400,000 $412,000 --$424,360 $437,091 $450,204 2D05- T Arterial Gas Tax $596,820 $602,549 $608,334 $614,174 $620,070 Real Estate Excise Tax (1st 1/4%) $845,798 $879,630 $914,815 $951,408 $989,464 Real Estate Excise Tax (2nd 1/4010) $845,798 $879,630 $914,815 $951,408 $989,464 Total Capital Improvement Revenues $2,288,416 $2,361,810 $2,437,964 $2,516,990 $2,598,998 Special levies and property taxes for Fire District No. 1 and the Spokane County Library District are not included. 13 Washington State Boundary Review Board for Spokane County December 2001 Property Tax Revenue The regular levy property tax is based upon the total assessed value of all taxable property within the city boundaries multiplied by the city's annual levy rate. The assessed value of taxable property is determined by the County Assessor. Taxable property includes land and improvements; and can include certain personal property such as machinery, some business equipment, and non-attached mobile homes. Specifically, it does not include household goods or business inventories. It is an unrestricted tax to be used for any municipal purpose. The maximum property tax levy for Washington State cities is $3.60 per thousand of taxable assessed value. Of this, $1.50 is to be used for fire protection services, and $0.50 is to be used for library services. If a city is annexed to either a fire district, a library district, or both, it cannot levy those corresponding amounts. For this study, it is assumed that the City of Spokane Valley annexes to both Fire District 1 and the Spokane County Library District. Therefore, the City of Spokane Valley's maximum Regular Levy would be $1.60 per thousand of taxable assessed value. The Spokane County Assessor's Office has estimated that the 2001 property tax revenues for the proposed incorporation area are $6,340,168. This is projected to increase to $7,078,356 in 2005 because of the general growth in the community's assessed value and new construction. Property Tax — Excess Levy A property tax levy in addition to the one cited immediately above also can be imposed by a municipality either to pay the debt service on a voter-approved or Council-approved ("councilmanic") municipal bond, or can be imposed for a voter-approved annual maintenance and operation levy. Usually, such an excess levy is imposed in order to finance a major public improvement or land acquisition, Leasehold Excise Tax Can apply to the lease or rent amount a private entity pays to occupy space in a publicly- owned building (or use of land). There was no revenue assumed to be generated from this source. Sales Tax Revenue A sales and use tax is applied to all qualifying retail sales in Washington State. Qualifying sales include tangible personal property (except groceries and prescription drugs) and certain personal services, and the tax is applied to the selling price. In the Spokane Valley, which is part of the Spokane County Transportation Benefit Area, the retail sales tax is 8.1 percent. A portion of the total sales tax is considered the "local" sales tax. In unincorporated areas, this amount is imposed by the county and accrues to its benefit. In incorporated cities, the local portion is levied by that city. Eighty-five percent of the local portion accrues to the city, but the remaining fifteen percent is remitted to the county in which the city is located. 14 Washington State Boundary Review Board for Spokane County December 2001 The local sales tax is 1.0 percent. In the Spokane Valley, this amount is currently imposed by Spokane County. The City of Spokane Valley could impose this same 1.0 percent tax to replace what is imposed by Spokane County, though the City would only be able to receive - eighty-five percent of the amount, the balance accruing to Spokane County. The net effect to the consumer is zero, since the local rate would be the same and the_- Spokane Valley levy would replace and not add to the total sales tax. The revenue generated from this source is unrestricted and can be used for any municipal purpose. The Spokane County Budget Office estimated the retail sales tax that would be generated in the incorporation area. With the deduction of the fifteen percent that.the County receives, the sales tax revenue to the new city for 2001 would be $14,311,514. Growth of that annual collection for 2002 and beyond is based upon general inflationary growth in the amount currently collected and new sales tax revenue attributable to increased business activity. This is projected to increase to $16,903,432 in 2005. Criminal Justice On a county-by-county basis, voters were given the option in 1990 to approve the imposition of a 0.1 percent sales tax for the benefit of criminal justice purposes. Voters in Spokane County approved this sales tax for all qualifying transactions, whether they occur in cities or unincorporated Spokane County. By statute, ten percent of the total amount remitted to the county is retained by that county for its own criminal justice purposes. The remaining ninety percent is divided between the county and the cities in that county on a per capita basis. The City of Spokane Valley would not need to enact any special legislation to benefit from this sales tax, since the tax already has been approved by the voters of Spokane County. The estimated revenue for 2001 is $1,036,694 increasing to $1,212,785 in 2005. State-Shared Revenues The State of Washington generates a number of revenues that it distributes partially to- jurisdictions in the state on a per capita basis and retains the rest. The City of Spokane Valley would not need to enact any special legislation to receive these revenues. General purpose revenues to be refunded by the state are estimated to be $2,099,007 in 2001 and are projected to increase to $2,180,777 in 2005; and the arterial gas tax which is limited to road projects is projected to increase from $596,820 in 2001 to $620,070 in 2005. Hotel/Motel Tax Local jurisdictions can impose a special tax of up to 2.0 percent on the charges for lodging at hotels, motels, private campgrounds, RV parks, and similar facilities on stays lasting up to 30 days. This tax is a part of the 8.1 percent sales tax collected, and the State reimburses 2.0 percent of the 6.0 percent sales tax that it receives. Use of the revenues is 15 Washington State Boundary Review Board for Spokane County December 2001 • restricted to purposes that promote tourist-related activities. Revenues of $400,000 are projected for 2001 and are expected to increase to $450,204 in 2005. Business and Occupation Tax Although, not imposed by any cities in eastern Washington, this revenue source allows for a certain degree of responsiveness to local jurisdictions. Unlike many municipal revenues, which are derived by affixing a certain tax or fee to a readily-identifiable base, business and occupation taxes can be based upon gross business income, or other rational factors; and can differentiate between different classes of business provided every business in such a class is assessed on the same basis. This source of revenue was not considered for the City of Spokane Valley and therefore, an estimate of potential revenues was not calculated. Utility. Tax In Washington State, cities are statutorily authorized to levy utility taxes but counties are not. Therefore, the Spokane Valley does not pay local utility taxes at this time because, as a part of unincorporated Spokane County, such taxes cannot be levied. Local utility taxes can be applied to any private utility operating within the boundaries of the city, and to public utilities provided that the public utility is an enterprise of the city itself. No city can legally tax a public utility that is its own special purpose district. For example, the City of Spokane Valley cannot levy a utility tax on the many water districts within its boundaries. A city's local utility tax levy can range up to 6.0 percent on private utilities. There is no established utility tax rate limit on city-owned public utilities. The city's tax is levied upon the utility provider and is based upon the gross revenue the utility provider derived from sales within the city. The private utilities in turn are authorized to collect an amount equal to the tax from its customers. For the Spokane Valley, the following utilities could be charged up to six percent in a utility tax with the amount for each percentage listed. Table 15: Utility Tax Revenue Rates Electricity $427,000 $854,000 $1,281,000 $1,708,000 $2,135,000 $2,562,000 Natural Gas $173,600 $347,200 $520,800 $694,400 $868,000 $1,041,600 Telephone $453,600 $907,200 $1,360,800 $1,814,400 $2,268,000 $2,721,600 Cable TV1 $77,000 Refuse $104,728 $209,456 $314,184 $418,912 $523,640 $628,368 1Spokane County currently assesses a five percent cable television franchise fee; a one percent utility tax could be assessed in addition to this by the new city. 16 Washington State Boundary Review Board for Spokane County December 2001 Gambling Tax • Gambling activity as reported to the Washington State Gambling Commission is the basis for this revenue source. The maximum rate varies from two to twenty percent depending upon the nature of the activity (amusement games to card rooms), and the base is the gross receipts the business derives from the activity. Taxes collected must be used to offset costs a jurisdiction incurs to enforce such•activities. Spokane County currently collects $1,000,000 in gambling taxes in the Spokane Valley. The study assumes that the same rate of tax would be levied; however, with the impact of Native American casinos, it was assumed that the gaming activity in the incorporation area would decrease, lowering gambling taxes collected to $875,000 annually. Admissions Tax The City of Spokane Valley has the option of imposing a tax of up to five percent on admissions. The tax collected can be used for any municipal purpose. Counties cannot impose an admission tax, therefore one is not being collected at this time. It was assumed that $100,000 annually could be generated by this source in the Spokane Valley. Planning and Building Permit Fees Local jurisdictions can charge a fee for special services, such as those services associated with planning, zoning, and development. For the Spokane Valley, fees were assumed to be the same as Spokane County's current fee structure. This would provide $125,000 from planning fees and $894,890 in building permit fees in revenue to the new city. Franchise Fees A franchise fee of up to five percent can be imposed by either counties or cities on the gross receipts of cable television providers in the jurisdiction. This would generate $385,000 in revenue in 2001, increasing to $467,970 in 2005. Business Licensing Fee Local jurisdictions can charge a fee to license all businesses that operate in the jurisdiction. There are no set guidelines for these fees. Some jurisdictions charge only a modest amount in order to track business activity in their jurisdiction. Others charge a sizable licensing fee in place of a business and occupation tax. Still others require licenses only from those businesses that have special regulatory issues associated with them, such as taxi services or pawn shops. The taxes collected can be used for any municipal purpose. It was assumed that a business license fee would not be collected. Fines and Forfeits Every city collects a certain amount in fines and forfeit revenues through the judicial enforcement of its municipal code. The court system in Washington and the nation operates according to a well-defined hierarchy, so the kinds of infractions, citations, and other judicial proceedings that are within a city's purview is somewhat limited. In broad terms, a city court handles primarily traffic infractions and criminal traffic citations, though 17 Washington State Boundary Review Board for Spokane County December 2001 some other cases such as certain domestic violence or misdemeanors also can be "city " cases. The maximum fine for each type of court filing is defined in State law. The amount that is actually assessed, though, is decided by the judge — unless a person simply "pays the ticket" without contest. Revenues collected can be used for any municipal purpose. The level of filing activity for the Spokane Valley was based upon a percentage of Spokane County as a whole. An estimate of revenues collected in 2001 is $1,501,575 increasing to $1,562,545 in 2005. Capital Expenses Capital improvements are those investments a city makes in its physical infrastructure that allow that city to improve its overall position for the future. These improvements could include repair and construction of roads, acquisition and development of park lands, construction of sewer lines and facilities, or development of structures to enhance stormwater management. These investments are as important to a new city as the day-to- day operations of the city. Because the returns to capital improvements are generally received over a long period, and because the costs of these improvements are substantial, it is important that a city plan these investments carefully. In fact, as required by the Growth Management Act, the City of Spokane Valley is required to develop a six-year capital improvement plan that conforms to the policies outlined in its comprehensive plan. While it is not possible to know what a new city would develop as its comprehensive plan,. to give an idea of possible capital projects, those identified in the Capital Facilities Plan for Spokane County area used. Some of the Spokane Valley projects identified in the Capital Facilities Plan include parks, sewers, and roads as identified on Tables 16 through 19. Spokane County plans to contribute over $20 million in local funds for park and sewer projects in the next five years in the incorporation area and close to $20 million in local funds in road projects. Stormwater facilities have not been identified in the Capital Facility Plan because Spokane County has not as of this time, committed to a capital facilities plan that will fund the needed regional stormwater facilities. Table 16: 2002-2006 Planned Capital Improvements for Sewers Self Pfole t+*" - _ _ ---Art‘talta total Cost=; Pasadena Park Sewer Construction $4,776,000 $1,579,000 Hills wn/Beverly Sewer Construction $3,141,000 $377,000 Hills _ Chronicle Sewer Construction $2,296,000 $276,000 Minor sewer construction in conjunction with Misc. Projects - 2002 County roads, maintenance projects, and repairs $400,000 $163,000 (80°I° of total budgeted) Mansfield Sewer construction $246,000 $99,000 Pinecroft Sewer construction $116,000 $47,000 18 Washington State Boundary Review Board for Spokane County December 2001 Harrington Sewer construction $3,063,000 $1,220,000 Upriver Drive Sewer construction $2,097,000 $836,000 Minor sewer construction in conjunction with Misc. Projects - 2003 County roads, maintenance projects, and repairs $400,000 $159,000 (80°/0 of total budgeted) Carnahan Sewer construction $2,385,000 $824,000 Weatherwood Sewer construction $3,166,000 $1,092,000 Sipple Sewer construction $2,690,000 $928,000 Owens Sewer construction $411,000 $142,000 _ Veradale Sewer construction $2,619,000 $903,000 Minor sewer construction in conjunction with Misc. Projects - 2004 County roads, maintenance projects, and repairs $400,000 $172,000 (80°/0 of total budgeted) Mica Park Sewer construction $774,000 $293,000 Orchard Avenue Sewer construction $2,905,000 $1,099,000 Inland Sewer construction $685,000 $155,000 Parks Road Sewer construction $1,450,000 $550,000 Edgerton Sewer construction $3,497,000 $1,322,000 Minor sewer construction in conjunction with Misc. Projects-2005 County roads,maintenance projects, and repairs $400,000 $189,000 (80%of total budgeted) Electric RR Sewer construction $3,021,000 $1,131,000 Veradale Heights Sewer construction $3,598,000 $1,348,000 Vera Terrace Sewer construction $2,232,000 $836,000 Upriver Terrace Sewer construction $2,694,000 $897,000 Minor sewer construction in conjunction with Misc. Projects-2006 County roads,maintenance projects, and repairs $400,000 $188,000 (80%of total budgeted) Total Sewer $49,862,000 $16,825,000 Table 17: 2002-2006 Planned Capital Improvements for Parks Park itEa ec - ave t ,_Loca[eost Valley Senior Center Construct $1,868,000 $1,400,000 Valley Mission Park Redevelopment $1,000,000 $1,000,000 Centennial Trail Restrooms — Harvard, Flora, Mission Road $210,000 $21 0,000 Trailheads Picnic Shelters Valley Mission, Edgecliff Parks $214,000 $214,000 Edgecliff Park Tennis Court $150,000 $150,000 Barker Road Trailhead Parking lot paving $350,000 $350,000 Total Parks $3,792,000 $3,324,000 19 Washington State Boundary Review Board for Spokane County December 2001 Table 18: 2002 Planned Spokane County Road Projects within Incorporation Area 16th Avenue Reconstruct to three-lanes with curbs $253,000 $25,000 (State Route 27 to Sullivan) and sidewalks. Construct multi-lane road with curbs Valley Couplet and sidewalks; remove islands and $6,733,000 $1,656,000 (University to Evergreen) restripe. Reconstruct and widen to three lanes; construct curbs and sidewalks; traffic Mission Avenue (McDonald to Sullivan) signal at McDonald; overlay; $3,010,000 $602,000 preliminary engineering; right of way; construction. Evergreen Road Reconstruct and widen to three lanes; $1,274,000 $255,000 (16th Ave to 2nd Ave) preliminary engineering; right of way. Park Road/BNSF Reconstruct and separate road and (Indiana to Montgomery railroad grades; preliminary $100,000 $40,000 Ave) engineering; right of way. 16th Avenue Reconstruct as three-lane arterial. $1,335,000 $180,000 (Dishman Mica Rd to SR 27) Implement and evaluate voluntary CTR Commute Trip Reduction (Sullivan Road) programs among Sullivan Road $104,000 $94,000 businesses. Various Roads Resurface arterial and residential roads $800,000 $300,000 (Sewer Paveback Projects) after sewer construction. Various Roads (Urban Resurface or reconstruct road surface. $900,000 $600,000 Arterial Preservation) Various Roads Minor improvements. $400,000 $400,000 (Minor Urban Projects) Havana Street (Sprague to Sidewalk $45,000 $9,000 Broadway Avenue) Barker Road Engineering and design costs to $411,000 $83,000 (Spokane River) replace bridge over Spokane River. TOTAL $15,365,000 $4,244,000 20 Washington State Boundary Review Board for Spokane County December 2001 __ _