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Bethel annexation brings revenue, worries
Port Orchard has expanded its waistline.
The Bethel Corridor North — 566 acres of land from Sedgwick Road to Shelton Lane and from BlackJack Creek to about 1,300 feet east of Bethel Road — was annexed into the city at 12:00 this morning.
The $139 million in assessed annexed properties, which includes a Walmart, the China Sun Buffet and dozens of retail stores and restaurants in between, brings the city of Port Orchard a projected yearly tax revenue increase of more than $1 million. With about $800,000 in expenses, the city could net about $200,000 for the general operation of the entire city.
The expansion also came with a its share of headaches.
“We get all the expenses right away but we don’t get all the revenue until a little later,” said Port Orchard City Council Member Rob Putaansuu.
Putaansuu met with Port Orchard Mayor Tim Matthes, city staff and city council members John Clauson and Jerry Childs at a special finance committee meeting March 4 to discuss the Bethel annexation. There, the group went over all the revenues and expenses associated with the annexation for the remainder of 2012 and beyond.
Putaansuu, who said he had been previously “vocal” about saving 50 percent of the revenue from the annexation, admitted it might take awhile for the numbers to settle down before money could actually be saved.
The city will receive $500,800 per year in projected sales tax revenue. Collection of the sales tax will begin on July 1 and make it to the city’s coffers in September. Property taxes for the annexation are projected to total $243,445 annually based on a 2012 levy. Property tax collection won’t begin until February 2013.
The city should have about $55,000 in revenue after expenses for 2012, said the city’s treasurer Allan Martin. But it’s the gap between when the city will see money from the annexation to when the city takes over responsibility of the corridor that troubled the finance committee.
Putaansuu said his “hot button” issues included finding a way to pay for an extra city police officer and buying a new snowplow for public works department. Hiring a police officer would cost $69,000 if done on April 12, Martin said.
The committee agreed that it would be best to wait until September, when salary and benefits would only cost the city budget about $38,000 for the remainder of the year.
Port Orchard Police Chief Alan Townsend said the police department has already made shift schedule changes in anticipation of the increased call volume due to the annexation. But because the police department will receive between 1,400 and 2,000 calls per year, Townsend said, hiring a new officer as soon as possible remains important. In the meantime, he thinks they will be able to handle the new territory.
“We have added two new shifts,” Townsend said. “We’re hoping not to delay response times. The city knows we may need to have some overtime until September and they understand.”
Public Works Director Mark Dorsey was also wondering how his department would Roadwork and drainage repairs are badly needed and at the center of his concern. Kitsap County stopped everything but baseline repairs to the infrastructure after the Bethel Corridor came into the city’s Urban Growth Area boundy, he said. Another full time public works employee should be hired in October, Dorsey said, but even that may not be enough to keep up with the extra work.
“It’s going to be triage,” Dorsey said.
After a failed attempt at annexation in 2009, the owners of 63.55 percent of the properties in the Bethel Corridor approved annexation to the city in August 2011. The city’s 2012 budget will increase from $3,836,725 to $4,018,100 because of the annexation. And though projections and calculations put the yearly revenue of the annexation at around $1 million, the finance committee agreed it would take time to know the exact numbers and exactly how the city’s recent growth would effect the budget.
City council member Childs said it would take a full cycle of tax collection and area maintenance before the city would have a firm grasp on the financial numbers.
“We won’t have a firm grasp until 2014,” said Childs.