Money Matters Government And Services Cost Big Bucks But Citizens For Valley Incorporation Say Existing Sources Would Supply Adequate Funding

There’s one question that nags at many people who are opposed to, or undecided about, forming a city in the Spokane Valley: What’s it going to cost?

A lot of them, especially the opponents, think it’s going to be a bundle.

In a recent poll, more than one-third of the people who said they oppose incorporation told researchers the potential for higher taxes was the main reason.

That was, by far, the top vote getter among opponents.

“If anybody thinks that we are going to save money, they are full of baloney,” one man told Robinson Research, which conducted the survey for The Spokesman-Review.

Incorporation proponents contend that it can be done.

They predict that if Valley residents vote May 16 to form a city of 73,000 people, the new government could get by on the nearly $31 million that is now raised in property, sales and other taxes in the Valley.

They say the new government wouldn’t have to create a lot of expensive bureaucracy and could keep costs down by contracting out for most of its services, like the city of Federal Way, Wash.

That may be. But it depends.

It depends on what services the new city council decides the new city would provide.

It depends on whether the council decides the city should provide those services itself or buy them from the private sector or another government.

It depends on what those outside services cost.

It depends, in other words, on a lot of things.

And it depends on whether contracting for services remains a viable option.

Incorporation supporters offer few details about how they would spend the $31 million or how much service they think the new city should buy.

When pressed for details, they brandish a copy of Federal Way’s budget and say the proposed Valley city’s budget would be similar.

Citizens for Valley Incorporation leaders point to the amount of local tax revenue generated in Federal Way to that estimated to be available to a government in the Valley to illustrate their point.

Those numbers, $18.6 million for Federal Way and $31 million for the Spokane Valley, prove that a Valley city could run a government without raising taxes, said Howard Herman, the group’s attorney and cochairman.

“If Federal Way can do it on 18-six, we should be able to do it for 31 plus,” Herman said at a recent gathering.

If the Federal Way comparison is valid, the new city will have to raise about $27 million from other sources to match the King County city.

The $18.6 million raised in taxes in Federal Way is less than one-third of that city’s total budget of $58.6 million for this year.

And Federal Way, after five years of relative financial calm, is beginning to struggle with some money matters.

Federal Way City Manager Kenneth Nyberg warns in a letter attached to the city’s 1995 budget that challenges await in the not-so-distant future.

City officials and residents will have to come up with some creative solutions to “disperse some of the clouds of fiscal uncertainty,” Nyberg wrote in the letter. “We stand at a point of transition in the city’s brief history.”

One thing is for sure - government and services aren’t cheap.

Northwest cities of roughly similar size to the proposed Spokane Valley spend anywhere from $58 million to $133 million each year (see chart on page V1).

Local incorporation leaders say a city in the Valley wouldn’t need to spend nearly as much as all that.

Many of the services provided by other cities, such as fire protection and water, wouldn’t be necessary in the Valley, they say.

Valley Fire District 1 and more than a dozen water districts already operate in the Valley.

Sue Delucchi, a political consultant hired by Citizens for Valley Incorporation, says that residents of the proposed city could make do with what they have now, or even do with less.

Proponents say they envision the proposed city operating its own planning and parks departments, but little else. Federal Way plans to spend $3 million on parks this year and $2 million on planning.

Just because other cities have “Cadillac” governments doesn’t mean the Valley can’t get by with a “1988 Dodge minivan,” Delucchi has said on several occasions.

The best guess is that Spokane County spends about $20 million to provide most of the government services available in the Valley now, excluding fire protection and water.

Incorporation supporters say a new city should continue to contract with the county to provide many of those same services, including street maintenance and police protection.

Sheriff John Goldman has estimated that it will cost about $9 million annually to provide the same number of patrols the Valley gets now.

The county currently spends about $4 million per year in the Valley on routine street work, said Dennis Scott, the county’s public works director. It generates about $6 million in road tax in the Valley, Scott added.

“You can see that they have enough to cover what’s spent there now,” Scott said. “Of course, if they want a higher level of service, they need to be aware that it’s going to cost more.”

Scott also said those figures may increase. County leaders may want to recover some overhead costs by charging the Valley city more money for the same service.

Federal Way officials are finding that to be true.

Their 1995 budget increased 16 percent over the previous year’s to become the largest in the city’s history. The amount of property tax the city collects is up nearly 4 percent this year over last.

Federal Way officials plan to spend about $49.1 million of the $58.6 million budget and carry $9.5 million over to 1996, according city budget information.

Last year, they spent $42.5 million and carried about $7.8 million over.

Adding 10 people to the city payroll, bringing the total number of municipal employees to 132, is among the planned expenditures in Federal Way in 1995.

The city council also authorized a $100,000 study to determine the feasibility of starting an independent city police force - which is taboo among Valley incorporation backers.

The costs for contracting with King County Police for law enforcement services in Federal Way has increased 14 percent in five years while the number of patrols has stayed about the same, according to Mary Gates, the city’s mayor.

Federal Way will give King County about $8.9 million this year for police and jail service, up more than $130,000 from 1994.

The police protection the city is paying for isn’t as good as it was before incorporation, according to a Tom Hemingway, who owns businesses in both the Valley and Federal Way.

Hemingway, who owns the Broadway truckstop in the Valley, said one of the employees at a similar business he owns in Federal Way recently caught a shoplifter stealing T-shirts.

When the employee called the King County Police to report that he had the thief in custody, Hemingway said, a dispatcher told the man to let the shoplifter go, that police didn’t have time to pick him up.

“The service has definitely gone down,” Hemingway said of Federal Way. “That wouldn’t have happened in years past. I’m not one bit sold that contracting out is the way to go.”

Gates said city officials wonder if they could get better protection for less money by starting their own force. The council is expected to make a decision on that before the end of spring.

Federal Way is facing other challenges as well.

Relieving traffic congestion is one of the city’s top priorities, Gates said, but the money is hard to come by without raising taxes.

Only a few state-funded street projects are under way in the city now “while the community’s desire to address traffic mitigation and safety concerns is mounting,” one section of the Federal Way budget states.

“The city council has recognized that the city cannot afford to initiate further major capital projects … without a new source of funding,” it continues.

Gates said the council plans to hold a bond election this fall to ask city residents to tax themselves to pay for new streets and parks.

While spending and taxes are increasing, Federal Way residents still pay less in property taxes than most people living in Washington’s large cities.

The municipal property tax rate in Federal Way is $1.54 per $1,000 of assessed value - currently the lowest among Washington’s top 15 cities and lower than the rate in unincorporated King County.

Gates said many of the changes in the city’s financial priorities are being driven by community input. That’s the way it should be, she added.

“We’re not a tax and spend operation,” she said. “At our latest round of budget hearings, we had no one saying that lowering their property taxes was their highest priority.”

For some people in the Spokane Valley, though, that is the highest priority. And that’s what Citizens for Valley Incorporation leaders are saying they can deliver with a majority “yes” vote on May 16.