The Annexation Task Force was formed in response to the City Council of Poulsbo rejecting two applications for annexation. Simply, there were too many unanswered questions that occurred before and during the procedure of annexation. Annexation is the process where the City of Poulsbo expands into its Urban Growth Area and grows in size. The Urban Growth Areas are defined by a joint process between Kitsap County and the City of Poulsbo and are sized according to forecasted population increases. The City of Poulsbo is forecasted to have a population of 14,146 people by the year 2040 (Puget Sound Region Council forecast data).

The following link is to the completed report from the Annexation Task Force published on July 9, 2008. I compiled and wrote this document to explain the conclusions of the Task Force and to suggest policy that should be adopted by the City of Poulsbo to bring clarity to the process of annexation. I could not have written this document without the work and support of the entire Task Force including the citizen stakeholders that attended numerous meetings and participated fully in the process. My thanks must also be extended to Councilman Dale Rudolph who chaired the Annexation Task Force.

One of the more innovative policies suggested by the stakeholders in the Annexation Task Force was the use of local zoning codes to control the radical increase in property taxes that occurs through annexation. It was suggested that the City of Poulsbo adopt a local zoning code that would send a clear signal to the Kitsap County Assessor that certain properties upon annexation will not be developed. And because they will not be developed to the levels of density that an urban environment dictates, they should not be subject to increased valuations and tax. As stakeholder Marilyn Miller wrote:

Why is this necessary? Because the Kitsap County Auditor working under the mandate from the State of Washington is charged to tax at “highest and best use.”  Highest and best use is described in financial terms and pre-supposes that all land will be developed to the density prescribed in the City of Poulsbo’s zoning designations. There is no an acknowledgement of the availability of city utilities or interpretation of our Critical Area Ordinance.

My neighbor is now in the process of appealing the Board of Equalization decision to the State Board of Equalization.

Below is the executive summary from the Annexation Task Force.

Annexation Task Force 2008

Executive Summary with Policy Questions:

The Annexation Task Force’s first meeting occurred on April 21, 2008 with a mission to discuss and to develop suggested policy changes for the City of Poulsbo to consider when annexing new land into the City. This section of the Annexation Task Force Document summarizes policy questions that should be considered by the City Council.

1.)  Notification of Annexation: a new process to improve communications.

Currently under state law, there is no systematic way in which people are notified prior to the City Council hearing the 60% petition, when annexation is occurring in their neighborhoods. The Task Force determined that improved public notice and overall communication through a neighborhood meeting would greatly reduce confusion and the spread of misinformation which increased levels of concerns for the residents of the areas that would be affected by the annexation.

The Task Force has come to consensus and recommends the following process to be implemented.

When petitioners come forward to seek annexation, they must gain approval of 10% of the annexed area to bring the petition forward to the City Council. When the petitioners gain the 10% approval, the Council will do the following:  a.) it will define the area that must be notified by a map which will normally be the area of the entire UGA section that the annexation petition area is located in b.) The petitioners will be required to notify all the land owners of the area defined (as listed on the county assessor’s tax rolls) by mail within 30 days of approval by the council. c.) the petitioners will also be required to pay for an ad in the local paper of record d.) The petitioners will be required to hold a community meeting and invite the people that have been notified within 60 days of Council approval. e.) at the community meeting the petitioners should explain to the attendees about the nature of the annexation they are proposing and disclose what plans they have developed for the land in annexed area. f.) there will be city staff available (either from the planning department or public works) to answer questions from the attendees during the community meeting.

Additionally, the City of Poulsbo should encourage Kitsap County to include in the County on-line parcel search, whether or not a parcel is within the Poulsbo UGA.

2.) Up zoning Land in the UGA:  a fair policy uniformly applied throughout the City.

During the conversation regarding growth capacity, there were many questions surrounding the capacity of the land available for development and its ability to meet our growth targets. There was a general concern that if the City should find itself short of developable land, that as part of the solution to this problem there could be a tendency to put more dense development in the unincorporated UGA, because of a perceived lack of political consequence from that decision. Instead of up zoning the existing city neighborhoods (who vote), our growth targets would be achieved by increasing densities in the UGA because the UGA residents would have no voice in that decision (they cannot vote). Although UGA zoning changes actually require joint approval by the City Council and County Commissioners, this policy would give some assurance to the UGA neighbors.

There was a consensus that there would be a fair and open process to include all the land in, and controlled by the City in the process of zoning changes and density allocation.

3.) Pre-application Conferences: a consultation regarding private property with observers in attendance.

The Council of Poulsbo supports and works toward an open and transparent operation by the City. Towards this end when there is a pre-application meeting (whether before or after annexation) to be held with the City staff, the public may attend. No formal notice of such meetings will be given, however the meetings are posted on the calendar and the public may see this calendar. The public must keep in mind these meetings are paid for by a developer and are informational in nature only. No public participation should be expected, except if requested by City staff or the developer paying the fees.

The Task Force has suggested that these pre-applications meeting might be more visible to the citizens if a list of the pre-application conferences be placed on the City website. It has also been suggested that a map be placed on the website that shows those properties that are proceeding towards development and have asked for a pre-application conference.

4.) Annexation Areas: how to annex larger areas at one time to achieve orderly development?

The Task Force acknowledged that larger areas, annexed all at one time, is a preferred option to better plan and implement infrastructure. Although this is a desired goal, there is also an acknowledgement that a “one size fits all” approach would not be effective in the annexation process. It was suggested that areas of annexation should be evaluated by their ability to promote orderly infrastructure development. If an annexation area does not promote orderly infrastructure development the area should not be annexed.

5.) Neighborhood Planning: a reasonable goal with obstacles that must be overcome.

The Task Force questioned the nature of neighborhood planning. How could planning be accomplished, how could it be paid for, will it be effective when directed at private properties under multiple ownerships? It was stated that there is little value for some property owners to be annexed into the city unless there was a plan for what will happened after annexation occurs. It was also stated that some neighborhood plans have little value in that after they are created, they are not implemented or cannot be enforced.

The Task Force is not in consensus as to how to achieve neighborhood planning, although all acknowledged that it is a reasonable goal. Some suggested approaches are that no development occurs in an area recently annexed until a neighborhood plan is adopted, that these plans would be developer driven and paid for, or the city would be responsible for paying for planning development. Such plans could also include exemptions for small developments and UGA areas. Neighborhood plans would address the development of infrastructure such as road and sewer placement but could include other neighborhood amenities.

Neighborhood planning in the UGA is an appropriate function for the City of Poulsbo. While it is true in the strictest sense that the UGA is within the county’s jurisdiction and not the city’s, it is also true that the county and the city has designated the UGA to be within the city’s future jurisdiction and therefore the county’s jurisdiction of the UGA is influenced by the city’s policies and codes.

The City of Poulsbo is responsible to the city’s residents to have the city develop in an orderly manner:  orderly development cannot occur without planning. Also, planning to preserve significant open spaces and strategic natural features is essential to preserve the character and environment of Poulsbo. Limited neighborhood planning in the UGA to establish proposed, key transportation and sewer utilities in addition to open spaces preserving the natural environment is an appropriate and necessary city planning function. Also, this may encourage land owners in the UGA to favor annexation of their area and property since they will have a reasonable expectation of how future development will occur.

6.) Taxation: the burden of annexation

It is acknowledged that there could be increased taxation after annexation occurs. There are many factors that contribute to the increase in property taxes experienced after annexation including the size of the parcels annexed, the comparable values of recent sales, and the associated increased land values, and the proximity of wetland and critical areas.

The Task Force was not in consensus as to how to address the increased taxes faced by the recently annexed home owners. Some on the task force suggested that the County assessor should be encouraged to re-evaluate the land values after annexation, while other suggested a more direct approach of changes in zoning to alleviate the increased value. By changing the zoning of the recently annexed land to reflect that some property owners do not want to immediately develop, there could be a decrease in land value and the tax burden. Others believe that it would be inappropriate to use land zoning to address inequities in taxing policy.

The City of Poulsbo should take a leadership position in encouraging the County Assessor to work with the residences of the Poulsbo UGA and the recently annexed to evaluate and mitigate increased taxes due to annexation.

7.) Public Information: a new brochure and a Q&A (Questions and Answers) document for the public

The current draft annexation brochure needs to be re-written to reflect the new policy as adopted by the City Council. The current brochure does not have enough information nor has some misleading information as to the nature of annexation. Along with a new brochure, a subsidiary document that is a questions and answer sheet should be developed. This question and answer sheet should reflect the round table questions and answers that are incorporated in this document (please see Policy Section for May 12, 2008).