Klahanie study released

July 30, 2014

By Ari Cetron

New: July 30, 1:14 p.m.

City could net nearly $2 million, but money would be quickly spent

As expected, Klahanie residents will pay less in taxes, and the city of Sammamish will net more money if city annexes the unincorporated area.

Pete Butkus, a former Sammamish deputy city manager who now runs Butkus Consulting, presented his study of Klahanie to the City Council July 15.
Sammamish paid Butkus $26,500 for his work. In addition, it paid Issaquah $30,000 for access to information from that city’s study completed last year.
The Klahanie area is a roughly 2-square-mile mile triangle just outside the southern portion of the city. A small portion of Klahanie also borders the city of Issaquah. County planning documents have long assumed Issaquah would eventually annex the area. After two failed attempts, however, Issaquah plans to relinquish its right to annex the area to Sammamish.
One step in Sammamish annexation process will be a review by the King County Boundary Review Board. City Manager Ben Yazici explained the Butkus study should meet one of the requirements of the board, which will need to make adjustments to allow Sammamish to annex the area.
According to the Butkus study, homeowners in the Klahanie area would see a net reduction of about 84 cents per $1,000 of assessed value on their property taxes. That translates to about $420 dollars a year.
Even with the lower taxes, Sammamish as a whole comes out ahead. According to the study, Sammamish would net $1.93 million more per year in tax revenues after the annexation.
Butkus was quick to point out, however, the extra money will likely be quickly spent.
The city will need to make major investments, particularly in roads, to bring the area up to the standards enjoyed by the rest of the city.
Some of these are big-ticket items, like work to be done to parts of Duthie Hill and Issaquah-Pine Lake roads, which will likely cost tens of millions of dollars. Butkus did not include the money needed for those road projects in his study, since there are no reliable studies for how much the costs will be.
However, he noted Sammamish has already committed to improving Issaquah-Pine Lake Road.
Councilwoman Nancy Whitten said she considers the report incomplete because it does not include these outstanding numbers, which are likely to have substantial costs.
Councilwoman Kathleen Huckabay rejected Whitten’s complaint, saying the numbers Butkus might include could be off by a factor of 10 or 20, giving an inaccurate picture of the issue.
City Council members pointed out those sorts of improvements will also benefit current Sammamish residents who use the roads every day.
“They’re also because of Trossachs, because of Alderra-Montaine,” said Mayor Tom Vance.
Butkus noted that Klahanie’s internal street network will also need lots of work, as the streets there are generally below Sammamish standards.
“Street maintenance has been virtually non-existent for the last decade,” Butkus said.
Surface water could also end up costing the city some money, Butkus said, although it’s unclear how much.
“The surface water management area has the biggest questions,” he said.
Butkus said that many of Klahanie’s detention ponds are old, not up to current standards, and have not been properly maintained. While the city doesn’t have to bring them up to standard, it will need to make sure they function properly. In some cases, there are significant plant and tree removals that would need to be done before the city could even begin to assess the status of the ponds.
Butkus also pointed out that the area has only one park, and it would likely need improvements to bring it up to standard.
However, the park has no master plan as do other Sammamish parks. As a result, it’s impossible to know how much it might cost to build any new amenities and maintain them in the future.
Butkus noted Sammamish has a history of having extra funds in its operating budget, and using those to help with capital expenses, and he expected the city would continue that tradition.
Yazici echoed these thoughts.
“The study shows a surplus on the operating side that will be spent on the capital side,” he said.
The council, long supportive of annexing the Klahanie area, was excited about the study. It praised Butkus for using conservative projections.
Councilman Tom Odell noted the projected surplus of nearly $2 million gives the city some breathing room if some of the study’s assumptions turn out to be incorrect.
“There’s enough margin here for unknowns,” he said.
The annexation process is continuing along three parallel tracks: Sammamish is adding the area to its plans, Issaquah is removing it from its plans, and King County is making adjustments of its own.
On Samm-amish’s end, Yazici expects the council to take a vote on the idea of annexation by the end of the year.
If everything goes smoothly, Klahanie residents could vote whether or not to become part of Sammamish in April 2015, with the annexation (if approved) becoming finalized Jan. 1, 2016.
“That’s, again, if everything goes smoothly,” Yazici said.


The short end

One big loser in the mix could be Fire District 10. Right now, the fire district covers Klahanie, along with Carnation and other parts of unincorporated King County. Generally, the district collects taxes from those areas and passes virtually all of those taxes on to Eastside Fire & Rescue.
Losing Klahanie is likely to result in a net loss of about $1.2 million per year for the district, according to the Butkus study.
“For the short term, the district can continue to operate under the reduced revenue if the area were to be annexed. Over the longer term, finances of the fire district in general may need to be examined for tax, benefit fee or service delivery changes,” Butkus wrote in the study.
District 10 also has an outstanding bond issue, but that should not be affected. Klahanie residents will have to continue to pay for the bond until its expiration in about 2026.
King County will also see some reductions. It will continue to collect the same level of property taxes from the area.
However, it will lose out on other revenue streams such as sales taxes and cable franchise fees, the study states. However, these are not likely to add up to a large amount compared to the whole of the county budget.


Big changes

Klahanie would make Sammamish more populous, bigger and denser if annexed.

Sammamish population: 48,060
Klahanie population: 10,939
Klahanie percentage of Sammamish total, if annexed: 18.5

Sammamish area: 21.55 square miles
Klahanie area: 1.98 square miles
Klahanie percentage of Sammamish total, if annexed: 8.4

Sammamish population density (people per square mile): 2,230
Klahanie density: 5,538
Sammamish density, after annexation: 2,507
Source: Butkus Consulting study

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