2008/10/15 Council Agenda Packet

CITY OF EVERETT FISCAL ANNEXATION ANALYSIS Asset Transfer. State law guides the asset transfer among districts in the event of a change in governance. In practice, asset transfer agreements are subject to negotiation and rely on communication between the two governments. For more information, please reference the Municipal Research and Services Center of Washington's (MRSC) Annexation Handbook, or RCW 35.02.190. The graphic below and text that follows explains how asset transfer works (Exhibit 22). Exhibit 22 Asset Transfer: A Theoretical Example If>60%of Study ' • If<50%of Study V<5%1r of Study N 100%of Study Area AV annexes..., Area AV aeraeses_J\Area AV atwetes—),,Area AV annexes, 1 Transfers all assets FD continues to own Fite District and liabilities to the assets;transfers q•of District is dissolved i City AV to City No •� + + \ City pays FD for All i CAT assets that remain in ash and Study Area liabilities transferred Source:Berk&Associates,Revised Code of Washington In Scenario 3, Eastmont, Hilton Lake and Rugg's Lake annexation areas make up about 8% of Fire District 1's (FD1) 2007 assessed value; while in Scenario 4, with the addition of Larimer, this percentage increases to about 160/0. As less than 600/0 of the assessed real property valuation of FD 1 is being annexed to Everett, under Washington State Law, FD1 maintains ownership of its assets. However, the District is to pay the City (in cash, properties, or contracts for fire protection services) a percentage of the value of its assets equal to the percentage of the value of the real property in the district that has been annexed into the City. This payment is to be made within one year, or within the time the district continues to collect taxes in the annexed area (RCW 35.02.200 and 35A.14.400). If an annexation were to occur, the City and District would need to reach an agreement on the value of the assets to be transferred, including the value of stations, vehicles, and cash in reserve. This analysis assumes that facilities and equipment for the fire department are to be acquired from Fire District 1 as part of the asset transfer. Animal Services The Animal Services Department currently provides animal control services as well as an animal shelter which serves the entire county and all cities within. For the operation of the shelter, the City receives contract revenue from other jurisdictions approximating $400,000 annually. The estimated loss in revenue from annexing areas which now pay the City for services is approximately $10,000 per year. However, the level of service for animal control response in the annexed areas would increase under City control. Currently the City has a 15- to 20-minute response time to complaints while the County averages a 3-day response time. The existing Department houses 16 FTEs, including 5 Animal Control Officers. It is estimated that with annexation in either scenario, the Department would require 1 additional Animal Control Officer. rata Final Report:October 2008 Page 41