Report finds Birch Bay incorporation economical

Published on Thu, Apr 10, 2008 by Tara Nelson

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Report finds Birch Bay incorporation economical

By Tara Nelson

Residents of Birch Bay could receive higher levels of service for the same amount of taxes they currently pay should voters decide to incorporate, a recent study found.

The study, released last week by Berk & Associates, an Everett-based consulting firm, found that taxes on high property values in the Birch Bay Urban Growth Area could cover the costs of starting a small city – with enough left over to increase levels of police and planning services as well as road improvements.

If such a fully functioning city existed in 2009 under the same tax structure currently employed by Whatcom County, for example, it would likely generate $3.2 million in operating revenues and would be able to provide slightly increased levels of service over what residents currently receive at a cost of $3.0 million.

In subsequent years, the study predicts revenues first diminishing as the city invests in developing its first comprehensive plan, and then increasing with further growth, although a considerable amount of planning work has already been completed by A Northwest Collaborative, a consulting firm that produced a Birch Bay Design Guidelines report last year with the input of Birch Bay residents.

As a primarily residential city with an assessed property value of approximately $180,000 per resident, Birch Bay would generate most of its revenues from property taxes and the largest single cost would be the provision of public safety in the form of police and jail costs, the study found.

Other services such as fire protection and libraries would likely continue to be provided by existing districts through contracts.
Such a city would likely generate $5.25 million in real estate excise taxes between 2009 and 2014, with the possibility for $1.25 to $2.5 million in additional revenues from matching state and federal grants.
Retail sales taxes, although less than most Washington cities of relative size, would also be an important source of funding. In addition, the report predicts that long-term growth anticipated in the area’s population as well as retail sales and the value of new construction, will strengthen Birch Bay’s financial position in later years.
Will taxes increase?

The study makes no recommendations for taxation or levels of service for a city of Birch Bay. Such a decision would be left up to a future city council although the study concludes that a majority of Washington cities choose to levy higher tax burdens than Birch Bay residents currently pay.

Community response

Kathy Berg, chair of the Birch Bay Steering Committee said Monday that she was encouraged by the results of the study.

“A lot of what (we) do as volunteers is what should be done by professionals,” she said. “But the most important thing is local control, how much we pay and how those taxes should be spent.”

“We get what we get right now because there is a lot of involved people in the county who have engaged the county, but it’s totally impractical to think that volunteers are going to stay that engaged for that long. The only people who can afford to do this are retired and we still don’t have the degree of control that we should have.”

Berg said she has heard mostly positive feedback about a possible incorporation but recognized that many were also fearful of having to pay higher taxes.

What’s next?

Before a city becomes incorporated, a petition with 10 percent of voter approval must be sent to the county’s boundary review board for consideration. Voters within the Birch Bay UGA, however, will have the final say. In the meantime, Berg said no one has yet set forth to run an incorporation campaign. “People need time to absorb it and we’ll probably begin to have some conversations over the next little while and we’ll see what happens,” she said.

More information

The entire 73-page report is avaliable at www.birchbayinfo.org.