2008/10/15 Council Agenda Packet

CITY OF EVERETT FISCAL ANNEXATION ANALYSIS 7.4 Transit From examining the maps for Community Transit, it appears that there is currently no extensive bus service in Eastmont, Hilton Lake, Rugg's Lake, and Larimer. Upon annexation of these areas, the City of Everett would face a policy choice of where and how much transit service it would provide. According to Everett's Transit Department, sales tax revenue is a major funding source for its services. Snohomish County now levies 0.9% sales tax for Community Transit, while Everett levies a 0.6% sales tax for transit. Annexation would shift the sales tax revenues from Community Transit to Everett, with taxpayers paying less in sales taxes. Assuming annexation under Scenario 3, the City is likely to receive an estimated $256,000 in sales tax revenue for transit in 2009. Under Scenario 4, the estimated increase in tax revenue is approximately $448,000. 7.5 Capital The capital impacts from annexation are somewhat more difficult to discern. While this analysis does estimate the equipment costs associated with new staff, it only addresses infrastructure costs on a qualitative basis. The annexation model does estimate some additional capital revenues available after annexation. The model provides estimates of the revenues from the Real Estate Excise Tax and the capital portion of the Gas Tax, which are held aside as available funding for capital infrastructure needs in the contemplated annexation areas. These revenues for Scenarios 3 and 4 (including City) are displayed in Exhibit 25 below. Scenario 3 amounts to an estimated $207 million over the next 20 years in present value terms and Scenario 4 results in an estimated $224 million. Upon annexation, as capital costs are fully fleshed out, there likely to be more needs than there are resources coming from the annexation area. This situation is comparable to the base City situation, which has unfunded portions of its current capital needs, and unless there are significant immediate capital infrastructure needs in the annexation areas, the long- term funding situation is unlikely to be dramatically different than the status quo. Exhibit 25 Estimated Capital Revenues for Everett (millions), Scenario 3 current 2010 2015 LUAU 2015 REET 6.04 8.04 11.08 14.99 20.66 Gas Tax 0.80 0.96 1.21 1.50 1.85 Total 6.84 9.00 12.30 16.49 22.51 Estimated Capital Revenues for Everett (millions), Scenario 4 current 2010 2015 LUAU 2025 REET 6.04 8.74 12.02 16.24 22.32 Gas Tax 0.80 1.05 1.32 1.63 2.01 Total 6.84 9.79 13.34 17.87 24.33 Source:Berk&Associates analysis,2008 [: Final Report:October 2008 Page 47