Fife Heights & Browns Point Dash Point Annexation Study

Transcription

1 Fife Heights & Browns Point Dash Point Annexation Study Prepared for the City of Tacoma Economic Development Committee, April 12, 2005 FINAL DRAFT REPORTS Nesbitt Planning and Management, Inc. In conjunction with ADR Options Consulting, Inc.

2 Fife Heights & Browns Point Dash Point Annexation Study Prepared for the City of Tacoma Area Profiles and Fiscal Bases Report Economic Development Committee April 12, 2005 FINAL DRAFT Nesbitt Planning and Management, Inc. In conjunction with ADR Options Consulting, Inc.

3 City of Tacoma: Browns Point Dash Point / Fife Heights Annexation Study Fiscal Bases Report 4/12/05 FINAL DRAFT Page i EXECUTIVE SUMMARY This report is the first product in a series of analyses and reports prepared to assist with a decision whether the City of Tacoma should annex the potential annexation areas (PAA s) of Fife Heights and / or Browns Point Dash Point. The report focuses on the fiscal and demographic parameters that characterize the PAA s and that are used to estimate costs and revenues. These two PAA s are small relative to the City of Tacoma. If both are annexed, they would: Increase the City population by just under two percent Increase the City s total area by just over 3,000 acres Increase the taxable assessed valuation of the City by three percent ($374 million) The Browns Point Dash Point PAA has a slightly older population than the Northeast Tacoma Neighborhood, the City s closest neighborhood, which is adjacent to the PAA s. The Fife Heights PAA, in contrast, has a slightly younger population than Northeast Tacoma. Ethnically, both PAA s have a higher percentage of white population than Northeast Tacoma. Predominantly residential areas, the two PAA s would add approximately 1,500 households to the City if annexed. The percentage households which are owner occupied is lower in both PAA s than in Northeast Tacoma. The PAA s differ from each other and from Northeast Tacoma most strikingly in per capita taxable assessed valuation. The Browns Point Dash Point PAA has 50% higher taxable assessed valuation per capita than Northeast Tacoma, while the Fife Heights PAA has 38% lower taxable assessed valuation per capita than Northeast Tacoma. These fiscal parameters are used to in subsequent reports to estimate revenues that would be generated by these PAA s and the costs that would be incurred to serve the PAA s if one or both are annexed to the City.

4 City of Tacoma: Browns Point Dash Point / Fife Heights Annexation Study Fiscal Bases Report 4/12/05 FINAL DRAFT Page ii Table of Contents EXECUTIVE SUMMARY...i Table of Contents...ii List of Tables... iii List of Figures...iv INTRODUCTION...1 Areas analyzed...1 Methodology...3 AREA PROFILES...4 Population...4 Population Density...5 Population Growth Projections...5 Population Age...7 Population Race...8 Housing...10 FISCAL BASES...11 Population...11 Real Property...11 Taxable Retail Sales...13 Real Estate Sales...15 Measures of Assets...15 SUMMARY TABLE...17 APPENDIX: AREA MAPS...18

5 City of Tacoma: Browns Point Dash Point / Fife Heights Annexation Study Fiscal Bases Report 4/12/05 FINAL DRAFT Page iii List of Tables Table 1 Population...4 Table 2 Population Densities...5 Table 3 Population Growth...6 Table 4 Distribution of Householder Race by Area...8 Table 5 Housing Units Table 6 Household Occupancy and Ownership Table 7 Parcel Counts Table 8 Taxable Real Property Table 9 Sales and Use Tax Reporters and Tax Base Table 10 Real Estate Sales Base Table 11 Taxable Real Property Per Capita Table 12 Revenue Bases... 17

6 City of Tacoma: Browns Point Dash Point / Fife Heights Annexation Study Fiscal Bases Report 4/12/05 FINAL DRAFT Page iv List of Figures Figure 1 Locator Map: Potential Annexation Areas (PAA s) and City of Tacoma Neighborhood Council Districts...2 Figure 2 Distribution of Population by Age...7 Figure 3 Distribution of Householder Race by Area (Graph)...9 Figure 4 Browns Point Dash Point Potential Annexation Area (PAA) Figure 5 Fife Heights Potential Annexation Area (PAA) Figure 6 Population By Census 2000 Block Figure 7 Population Density By Census 2000 Block Figure 8 Real Property Taxable Assessed Valuation Aggregated by Census 2000 Block Figure 9 Real Property Taxable Assessed Valuation Per Capita Aggregated by Census 2000 Block Figure 10 Median Household Income by Census 2000 Block Group... 25

7 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 1 INTRODUCTION This paper is the first section of a report to help inform the Tacoma City Council s decision whether to annex the Browns Point Dash Point and/or Fife Heights areas. This section contains area profiles and fiscal bases the key parameters that will allow subsequent calculation of revenues and costs in the annexation areas. The revenue and cost analyses are not contained in this paper and are presented as separate sections. The area profiles portray certain characteristics of the two annexation areas relative to the existing City of Tacoma. These include basic demographic parameters such as the total populations and size of the areas, relative population densities, number of households, and population age distributions. The fiscal bases measure the tax bases of each annexation area: assessed valuation (including a breakdown of the numbers and types of land uses on these parcels) taxable retail sales, and annual real estate sales. This section also computes some standard indices of the financial assets of each area for comparison with the existing City, such as assessed valuation per capita and median household income. As noted above, the actual revenue projections are not included here. Maps of each of the annexation areas under consideration are included in the Appendix, with each displayed with reference to the abutting area neighborhood of Tacoma s Northeast Neighborhood which this report refers to as Northeast Tacoma. Areas analyzed The two areas to be analyzed in this Study are: 1. The potential annexation area (PAA) known as Browns Point Dash Point, an area of approximately 1.1 square miles located west of the City of Tacoma on the north shore of Commencement Bay; and 2. The PAA known as Fife Heights, an area of approximately 0.8 square mile located adjacent to the City of Tacoma on its eastern boundary on the north side of Fife, west of Interstate 5, where Tacoma abuts the City of Fife. Both potential annexation areas are unincorporated areas adjacent to the existing City of Tacoma and inside the Pierce County Urban Growth area. Both are part of the City s Urban Growth Area as defined in the Tacoma Comprehensive Plan.

8 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 2 Figure 1 is a locator map that shows each of the Potential Annexation Areas (PAA s) under consideration relative to the City of Tacoma s current boundaries and neighborhood planning areas. Figure 1 Locator Map: Potential Annexation Areas (PAA s) and City of Tacoma Neighborhood Council Districts

9 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 3 Methodology Throughout this study, most of the definitions, data and even much of the analysis is compiled in a geographic information system or GIS. The sources with inherent geographic bases are diverse, ranging from the original Tiger Line Data and associated tables of the U.S. Census Bureau; a wealth of map layers (jurisdictions, parcels, streets, natural features, etc.) available from Pierce County GIS; and planning boundaries and specialized layers like road segments from the City of Tacoma. Beyond these sources are extensive tabular data which can be processed and linked to these maps, including real property characteristics, account information, and sale history data from the Pierce County Assessor- Treasurer; an wealth of population, housing and demographic data in Summary Files 1 and 3 from the Census Bureau; and taxable retail sales data producible in cooperation with the Department of Revenue. The flexibility of a GIS based study often allows analysis by many different geographical subareas for little more effort than by just a few gross areas. Accordingly, the study team solicited from the City both the standard planning subareas within the current City boundaries and the subareas of potential interest within each of the PAA s. Although sometimes the big picture is obscured by an excess of detail, more than occasionally some patterns are perceivable only in the details. Whenever feasible and useful, the study analysis will report by the smaller areas as well as by totals for the City as a whole and for each of the PAA s. The City of Tacoma is very large in land area and population relative to the two PAA s analyzed in this report, and because the City is very diverse in character among its neighborhoods, this report often uses comparisons to the Northeast Tacoma Neighborhood planning area (sometimes called Northeast Tacoma ) instead of citywide data. The Northeast Tacoma Neighborhood was selected because it was assumed that its proximity to both PAA s would make it the planning unit most similar to the PAA s and therefore provide more meaningful analysis. For analysis of the impact of potential annexation of these areas, the marginal cost to serve these PAA s will be compared to the citywide revenue and cost data. However, in this section, comparison to the closest neighborhood planning area is emphasized.

10 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 4 AREA PROFILES The area profiles that follow portray certain characteristics of the two potential annexation areas relative to the existing City of Tacoma and to its Northeast Neighborhood, including parameters indicating the relative sizes of the areas, such as total area and population; relative population densities and number of households; median ages; and assets of each area, such as taxable assessed valuation per capita and median household income. Population Table 1 below portrays the relative populations of each of the PAA s, the City of Tacoma and Northeast Tacoma. Except where otherwise noted, the population, housing and other Census-based figures used in this report are for the year Figures for other years are calculated later in this report for comparability with other reported data and, of course, for projection of revenues and costs for the City of Tacoma should annexation be chosen. With populations of 2,096 and 1,533, respectively, the Browns Point Dash Point and Fife Heights areas represent just over 1% of the total remaining unincorporated area in Pierce County. They would increase the total population of the City of Tacoma by just under 2% if annexed by Tacoma, and this would represent an increase of 22.8%. in the population of the Northeast Tacoma Neighborhood. Population % Change if PAAs are Annexed Browns Point 1,093 Dash Point 1,003 Fife Heights 1,216 Total PAA's 3,312 NE Tacoma (NE Neighborhood Planning Area) 15, % City of Tacoma 196, % Pierce County Unincorporated Area 332, % Table 1 Population

11 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 5 Population Density Within the GIS, the physical size of each of the study subareas and the resultant densities in population per acre and per square mile were calculated. The areas and densities are displayed below in Table 2. The density of each PAA is lower than that of Northeast Tacoma. The Dash Point section of the Browns Point Dash Point PAA is about half the density of the Northeast Tacoma, while the density of Fife Heights PAA and the Browns Point section are approximately 59% and 77%, respectively, of the density of Northeast Tacoma. NAME Population Area [Acres] Population Density Persons per acre Persons per Square Mile Browns Point 1, ,565 Dash Point 1, ,617 Fife Heights 1, ,568 Total PAA's 3,312 1, ,818 Northeast Tacoma 15,906 3, ,355 Table 2 Population Densities Population Growth Projections The Puget Sound Regional Council s (PSRC) 2003 Population & Employment Forecasts, Central Puget Sound Region, issued November 2004, indicates that the City of Tacoma s historic growth pattern has been moderate. Generally, the annual average growth rate for Tacoma s population has been below 2% per year between 1970 and PSRC s forecasts for 2010, 2020 and 2030 project similar rates of growth. These growth patterns are typically a combination of both annexation and infill. As noted in the section on Population, above, annexation of the Browns Point Dash Point and Fife Heights PAA s would create a population change of 1.8%, approximately equal to the normal annual growth of Tacoma for one year. Land use policy decisions will determine the future growth in the PAA s if they are annexed, but both PAA s are relatively less densely developed than the adjacent Northeast Tacoma, allowing room for greater growth within the PAA s. PSRC forecasts considerably greater population growth of Northeast Tacoma, combined with the PAA s, than for the City of Tacoma as a whole. Table 3, below, portrays the PSRC s forecast of 13.1% and 22.5% in the Browns Point Dash Point and Fife heights PAA s, respectively, over the next 10 years. From this 10 year forecast, this study interpolates populations for

12 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 6 three dates: 2003, for normalization of the taxable retail sales data yield; 2004, for normalization of the assessed valuation per capita; and 2005, for projection of costs for the cost section of this report. Population 2000 Reference FAZ Growth Rate, Population 2003 Estimate Population 2004 Estimate Population 2005 Estimate Browns Point 1, % 1,134 1,148 1,163 Dash Point 1, % 1,041 1,054 1,067 Fife Heights 1, % 1,292 1,319 1,346 Total PAA's 3,312 3,467 3,521 3,576 Table 3 Population Growth The PSRC s forecasts also project that growth in the Fife and Fife Heights area will consist of both single family units and multi-family housing units, with multi-family increasing by more than 30% each decade through In contrast, the growth in Northeast Tacoma and Browns Point Dash Point is expected to be primarily in single family households, with very little increase in multi-family housing.

13 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 7 Population Age The Census also reports the population in twenty-three age groups, further breaking out each group into male and female and provides this information down to the block level. For the purposes of clarity, the study recombined the male and female distributions. Figure 2, below, portrays the age distribution for the PAA s and the Northeast Tacoma Neighborhood. 25% Distribution of Ages 20% 15% 10% 5% 0% <5 5 to 9 10 to to to to to to to to to to to to to to to to to to 84 >=85 Age Range Browns-Dash Pts.(Tract 708) Fife Heights (Tract 709) Northeast (Tracts , , ) Figure 2 Distribution of Population by Age The age distribution pattern among residents of the PAA s is quite similar to that of Northeast Tacoma. However, the PAA s have lower percentages of youth, under 21 years of age, and greater numbers of older population, those over 60 years of age, than Northeast Tacoma. Among the adult population over 21 and below 60, the Fife Heights PAA population is a somewhat younger group with more children who are very young than either Northeast Tacoma or Browns Point Dash Point; and the Browns Point Dash Point PAA adult population under 60 is a slightly older group with fewer young children than either of the other groups.

14 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 8 Population Race The City of Tacoma has a number of ethnic groups represented among its residents. The table and figure that follow show that the PAA s have a significantly higher percentage of all white population than Northeast Tacoma and than the City as a whole. Correspondingly, there is a much lower ratio of all other ethnic groups in the PAA s than in Tacoma. The greatest difference is in the African-American population, which is the largest non-white group in the City of Tacoma at 11% and in Northeast Tacoma at 6% but is represented at only 2% or lower in the PAA s. A similar but less dramatic difference exists in the Asian population, of which the PAA s have lower percentages than Northeast Tacoma or Tacoma at large, where Asians represent 6% and 7.6% respectively of the total population. Total White alone Black or African American alone Race: Householder who is... Am.Indian and Alaska Native alone Asian alone Native Hawaian+ Other Pac.Is'der alone Some other race alone Two or more races BROWNS POINT DASH POINT FIFE HEIGHTS All of PAA's 1,437 1, NORTH EAST 5,714 4, Percentages White Alone Black Alone Amer. Indian Alone Asian Alone Pacific Islander Alone Other Race Alone Two or More Races BROWNS POINT 92% 1% 2% 3% 0% 1% 2% DASH POINT 93% 2% 0% 2% 0% 0% 2% FIFE HEIGHTS 87% 2% 1% 4% 0% 2% 4% All of PAA's 90% 2% 1% 3% 0% 1% 3% NORTH EAST 82% 6% 1% 8% 0% 1% 2% Table 4 Distribution of Householder Race by Area

15 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 9 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% White Alone Black Alone Amer. Indian Alone Asian Alone Pacific Islander Alone Other Race Alone Two or More Races FIFE HEIGHTS DASH POINT BROWNS POINT NORTH EAST All of PAA's Figure 3 Distribution of Householder Race by Area (Graph)

16 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 10 Housing Housing density and percentage of home ownership versus renters also help to describe the City of Tacoma and the proposed annexation areas. Table 5, below, shows the relative numbers of housing units, households, and families, as well as average household and family sizes. Total Pop. Households Average House- hold Size Total Families Population in Families Average family size Housing Units BROWNS POINT 1, DASH POINT 1, FIFE HEIGHTS 1, , All of PAA's 3,312 1, , ,530 NORTH EAST 15,906 5, ,489 13, ,044 Note: Averages are not weighted by the population, the number of households, the number of families, etc. which were reported within the individual blocks by which this data was tallied. Table 5 Housing Units Table 6, below, shows the relative numbers and percentages of home ownership and rented units. Occupancy Status Tenure Total Occupied Vacant Total Owner occupied Renter occupied BROWNS POINT DASH POINT FIFE HEIGHTS All of PAA's 1,530 1, ,446 1, NORTH EAST 6,044 5, ,714 4,608 1,106 Table 6 Household Occupancy and Ownership The average family size is lower in both PAA s than in Northeast Tacoma. Family size is considerably lower in the Browns Point Dash Point PAA and slightly lower in the Fife Heights PAA. Both of the PAA s have a greater percentage of home ownership than Northeast Tacoma. The ratio of owner occupied homes is lower in both PAA s, at 70% and 76% in the Browns Point Dash Point and Fife Heights PAA s, respectively, than in Northeast Tacoma, in which the ratio of owner occupied homes is 80%.

17 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 11 FISCAL BASES Fiscal bases describe the tax bases of each proposed annexation area and the existing City. These bases are later used to project revenues, which, in comparison to projected expenditures, will help to anticipate what levels of service might be expected based on the populations abilities to pay for services if the annexations are approved. The fiscal bases presented in this report include numbers and types of parcels, taxable assessed valuations, taxable retail sales, and real estate sales. Actual revenue projections are not included here and will be the topic of a later report. Population The major fiscal base population has already been reported in the Area Profile. Population data is used to calculate various state revenues and per capita analysis of most types of revenues to establish an apples to apples basis of comparing the PAA s to the City of Tacoma. First, population is widely used as a metric for estimating costs or revenues. In some cases population is an appropriate measure, in other cases, it is just an easy choice, without good correlation to fiscal realities. Second, population is also a metric which can be used for exactly determining certain costs or revenues. For example, many state funds such as the Liquor Profits or the Gas Tax are distributed strictly per capita so that the populations determined for an area (once ratified by the State Office of Financial Management) will determine the distribution of these revenues. Real Property Real property includes land and attachments to the land that cannot be moved (primarily buildings.) Real property is assessed in Pierce County by the Pierce County Assessor-Treasurer s office for all properties in the county, whether in incorporated cities or not. Residential, commercial, and other types of properties are tallied in Table 7, below. The power of a GIS based approach expands tremendously when certain parcel based data extracts now available for purchase through the Pierce County Assessor-Treasurer are linked to these maps. Beyond the simple measures of assessed valuation which are already on the tax parcel layer, one can link this additional data to help investigate detailed property characteristics, some current use data where such factors chance to overlap factors useful to appraisers, property histories, and property sale prices over many years. The amount of the data and questions which the data can address is quite substantial. 1 The tables that follow report summaries based on investigation of every property within the boundary of the study area. Totals are shown in each case by PAA and by the closest City planning area, the Northeast Tacoma Neighborhood 1 The liability of these data sources is that they are huge: several of the data sets have more than several hundred thousand records. Brute force queries of data this size even on fast machines will not necessarily return answers quickly.

18 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 12 AREA Residential Commercial Industrial Open Space, Parks, Etc. Uncoded BROWNS POINT DASH POINT FIFE HEIGHTS All of PAA's 1, ,675 NORTH EAST 5, ,055 Table 7 Parcel Counts Parcels It is interesting to note that the combined PAA s have more open space and park parcels than the Northeast Tacoma area does, even though their total land area is much smaller. Table 8, below, tallies real taxable assessed values by type of property. These are aggregations land use types are actually reported by some thirty-nine use codes Total AREA Residential Commercial Industrial Taxable Assessed Valuation Open Space, Parks, Etc. Uncoded BROWNS POINT 156,417,655 $ 3,279,900 $ - $ 35,800 $ - 159,733,355 DASH POINT 125,416,495 $ 488,600 $ - $ 182,800 $ 248, ,336,195 FIFE HEIGHTS 83,961,850 $ 354,700 $ - $ 755,400 $ 728,100 85,800,050 All of PAA's 365,796,000 $ 4,123,200 $ - $ 974,000 $ 976, ,869,600 NORTH EAST 1,293,749,670 $ 16,130,200 $ 2,945,900 $ 6,527,180 $ 735,600 1,320,088,550 Totals Table 8 Taxable Real Property The PAA s would add $371.9 million taxable assessed valuation to the City of Tacoma. 2 This would be an increase to Northeast Tacoma of approximately 28% in taxable assessed valuation. 2 This taxable assessed valuation includes all real property. Before application to revenue generation, however, a small addition will need to be made for an estimate for personal property. The real property figure includes both State assessed property (or SPS property) which the State determines and delivers to the County Assessors by tax code area and adjustments for Low Income Seniors, who are exempt from paying property tax. If this analysis were computing the tax base for a levy to service bonded indebtedness, another small decrement would have to be made for the senior / disabled exemption.

19 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 13 Taxable Retail Sales Taxable retail sales and the resultant sales tax collected are reported to the State with a location code which identifies how the components of the collected tax are to be distributed to the proper jurisdictions. In incorporated areas, the local option sales tax is distributed 85% to the city and 15% to the county, after a 1% administrative fee retained by the Department of Revenue (DOR), so the location code obviously identifies the city. In unincorporated areas, however, all the tax collected anywhere in a county is lumped together, making it challenging to disaggregate the total tax into the geographic neighborhoods which generated it. Little can be deduced from the business address of the reporting business, as the offices may well be in a nearby city or out of the county or even out of the state. 3 To determine the unincorporated Pierce County taxable retail sales which occur in Browns Point - Dash Point and in Fife Heights, this study first enlisted the help of DOR. 4 The consultant first specified the exact study areas to DOR using GIS shape files. DOR then identified all sales and use tax reporters with business addresses located within the study area and retrieved their sales and use tax filed for the calendar year This data was then scaled to account for reporters whose location cannot be retrieved by GIS means, using calculated ratios of GIS retrievable to actual reported sales and use tax data for each County. In the interest of process speed, this study elected to seek taxable retail sales data from the DOR only aggregated by PAA, rather than enter into a formal data sharing agreement which would allow detailed retrievals for every sales tax payer. 5 3 King County found in a study for the calendar year 2002, fully 53% of the sales tax reported in King County was by businesses located outside King County and that 37% of the sales tax reported in King County was by businesses located even outside Washington State. 4 We appreciate the extensive assistance from Ray Philen of the Washington Department of Revenue. 5 Such agreements provide, that under strict conditions of confidentiality, data on past reported taxable retail sales and use tax bases are made available for analysis to a Consultant, acting as the City s agent. No individual amounts reported to the Department of Revenue are discussed or revealed outside the scope of the data sharing agreement. Figures reported publicly are always aggregated by multiple payers.

20 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 14 The taxable retail sales are expressed per capita in the table below, using the 2003 populations for each of the PAA s from the Population Growth table on page 6. BROWNS POINT Count of Filers Taxable Retail Sales [TRS] Estimate (2003) Population (2003) TRS per Capita 44 $ 5,066,143 1,134 $ 4,467 DASH POINT 21 $ 3,500,764 1,041 $ 3,363 FIFE HEIGHTS 12 $ 3,942,639 1,292 $ 3, $ 12,509,545 3,467 $ 3,608 Special retrieval for this analysis by the Washington Department of Revenue Table 9 Sales and Use Tax Reporters and Tax Base While the taxable retail sales per capita is significantly smaller in the PAA s than in the City of Tacoma, for which the taxable retail sales per capita is approximately $20,000, this difference is not unusual for areas late to annex. 6 Typically, by this time the potential annexation areas that generate high retail sales and have a tax base lucrative for a city to annex already have been annexed. The per capita retail sales tax that would be generated by these PAA s is very comparable to the remaining PAA s in King County. The ten remaining King County PAA s have per capita taxable retail sales ranging from a high of $8,322 in Lea Hill near Auburn to a low of $1,826 in the nearly entirely residential area of Klahanie, with six of the ten areas below $4,000. A King County PAA close to Tacoma is East Federal Way, where the per capita taxable retail sales are $3,264, very comparable to the Browns Point Dash Point and Fife Heights PAA s. 6 It is probably fair to presume that some portion of the sales tax base in the current City derives from purchases by the residents of the two PAA s in question. Under current statutes, however, the sales tax from these purchases accrues to Tacoma regardless of whether the shoppers live within the City limits. The expected sourcing provisions of the Streamlined Sales and Use Tax Agreement (SSTA) implementation will change this picture somewhat, by changing the point of sale for retail sales tax purposes to the point of delivery of the item sold. This change will shift sales tax revenues from some local taxing jurisdictions to others. See Improvements to the Streamlined Sales Tax Sourcing Estimates, Washington State Department of Revenue, 9/2004

21 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 15 Real Estate Sales Typically an analysis of the fiscal base of real estate sales important for later calculation of revenues from the real estate excise taxes must use an estimate of annual real estate sales, such as an annual property turnover rate. A data extract available from the Pierce County Assessor-Treasurer makes the estimation unnecessary by reporting all real estate sales, with sale dates and prices back to This study identified the sales within the study areas, tallied them by the three years 2001 to 2003 (ignoring more distant sales because the market conditions or taxable assessed valuations could be too different from the present and ignoring more recent sales because an appreciable fraction might still be in the process of being reported,) and calculated these sales as a ratio of the current taxable assessed valuation base 7. Sales ('01-'03) Sales (Ave. Annual) Taxable Assessed Valuation (2004) Annual Turnover BROWNS POINT $ 26,257,300 $ 8,752,433 $ 159,733, % DASH POINT $ 37,718,300 $ 12,572,767 $ 128,754, % FIFE HEIGHTS $ 20,541,040 $ 6,847,013 $ 85,800, % All of PAA's $ 84,516,640 $ 28,172,213 $ 374,287, % NORTH EAST $ 403,352,800 $ 134,450,933 $ 1,320,088, % Table 10 Real Estate Sales Base Measures of Assets Two interesting additional parameters to consider when comparing the characteristics of potential annexation areas to the existing City of Tacoma are aggregate measures of areas assets. These parameters are: the per capita taxable assessed valuation 8, calculated from a combination of Assessor- Treasurer and Census data and the median household income, retrieved from Census data. 7 Before application in a Real Estate Excise Tax projection, these ratios need to be adjusted for the growth in taxable assessed valuation from the years tallied to Should the real estate excise taxes prove crucial to the fiscal analysis of one or both of the potential annexations, means will also be investigated for using a somewhat longer fraction of the twenty-two year period of record, perhaps by normalizing sales in past years to the current assessed valuation of the study area as adjusted by changes in the total assessed valuation of the County in past years. 8 These real property taxable assessed valuations were aggregated parcel by parcel, using Pierce County Assessor- Treasurer data extracts for 12/18/04. Although the totals are calculated exactly and rounded only to the nearest thousand dollars here, the reader should bear in mind that even the certified tax role for a given year changes during that year as appeals are reviewed and assessments adjusted.

22 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 16 When examined on a per capita basis, as shown in Table 11, below, the differences between the PAA s are striking. The per capita taxable assessed valuation is more than 50% higher in the Browns Point Dash Point PAA than it is in Northeast Tacoma. In contrast, the Fife Heights PAA per capita taxable assessed valuation is 38% lower than that of Northeast Tacoma. Taxable Assessed Valuation (TAV) AREA Land Improvements Total Population (2004) TAV / Capita BROWNS POINT $ 80,345,100 $ 83,177,700 $ 159,733,355 1,148 $ 139,106 DASH POINT $ 65,217,400 $ 70,722,200 $ 128,754,495 1,054 $ 122,189 FIFE HEIGHTS $ 31,964,100 $ 54,966,300 $ 85,800,050 1,319 $ 65,058 All of PAA's $ 177,526,600 $ 208,866,200 $ 374,287,900 3,521 $ 106,306 NORTH EAST $ 476,595,700 $ 891,765,300 $1,320,088,550 15,906 $ 82,993 Table 11 Taxable Real Property Per Capita Unlike much population and housing data, Median Household Income is not 100% data meaning that it was collected only from a sample of the full population. It is reported only to a slightly coarser geographic level: the census block group 9. Figure 9 and Figure 10 portray these assets graphically in the Appendix. Median household income is a simple average by census block group within the subareas of the City and of the PAA. The simple average will be replaced in the final report by an average weighted by population. Note that due to alignment of block group boundaries and subareas, not all subareas have median household incomes calculated. For a picture of the profiles of the City and the two PAA s, please refer to maps in the Appendix for the spatial distribution of several fiscal bases. For example, two maps shade census block groups proportional to the magnitude of real taxable assessed valuation per capita or of median household income. Plotting each block group individually avoids the distortion of averaging across subareas which generally do not follow block group boundaries. 9 The smallest geographic unit at which census data is reported is the block. Groups of roughly four to thirty blocks are aggregated into block groups, which are themselves parts of Census tracts. Most population and housing data is reported at the block level. Additionally, a wealth of demographic data is reported down to the block group level, but this data of necessity cannot be used to characterize quite as small areas. In the 2000 Census, Pierce County had some 11,953 blocks in 520 block groups.

23 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 17 SUMMARY TABLE The following table summarizes each of the bases used for estimating revenues that would be generated in each PAA. The existing City of Tacoma fiscal bases are shown also for comparative purposes. 10 REVENUE BASE Total Taxable Real Assessed Valualtion Browns Point - Dash Point Fife Heights City of Tacoma $ 288,000,000 $ 86,000,000 $ 12,456,000,000 Taxable Retail Sales $ 8,567,000 $ 3,943,000 $ 3,987,365,000 Population 2,230 1, ,800 Real Estate Sales $ 21,325,000 $ 6,847,000 n/a Table 12 Revenue Bases 10 Note that while the populations are for 2005, the valuation and sales tax data are for the most recent years available at the start of this study tax year 2003 for taxes payable 2004 for valuations and 2003 for sales tax. The population for Tacoma is for 4/1/2004, as 2005 estimates will not be released by the Office of Financial Management until 6/30/05.

24 City of Tacoma: Browns Point Dash Point / Fiscal Bases Report 4/12/05 FINAL DRAFT Page 18 APPENDIX: AREA MAPS Browns Point Dash Point Potential Annexation Area (PAA) Fife Heights Potential Annexation Area (PAA) Population By Census 2000 Block Population Density By Census 2000 Block Real Property Taxable Assessed Valuation Aggregated by Census 2000 Block Real Property Taxable Assessed Valuation Per Capita Aggregated by Census 2000 Block Median Household Income by Census 2000 Block Group Maps are not included in this electronic version to save file size.

25 Fife Heights & Browns Point Dash Point Annexation Study Prepared for the City of Tacoma City Revenues Report Economic Development Committee April 12, 2005 FINAL DRAFT Nesbitt Planning and Management, Inc. In conjunction with ADR Options Consulting, Inc.

26 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page i EXECUTIVE SUMMARY This report is the second product in a series of analyses and reports prepared to assist with a decision whether the City of Tacoma should annex the potential annexation areas (PAA s) of Fife Heights and / or Browns Point/Dash Point. This report projects primarily the general fund revenues which will result for the City of Tacoma should the PAA s be annexed. Subsequent reports will compare these projected revenues with the projected expenses, including one time costs and alternatives for bridging any gaps. The cost and revenue comparison will be one of the elements used by the Tacoma City Council and voters of the annexation areas to determine whether the PAA s shall be annexed. The potential revenues are calculated for each potential annexation area separately but are reported side by side for convenience. Together, the annexations would yield the City of Tacoma a total of approximately $2.09 million annually in new general fund (unrestricted) revenues.

27 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page ii Table of Contents EXECUTIVE SUMMARY...i Table of Contents...ii List of Tables... iii REVENUE APPROACH...1 REVENUE NOTES...3 Assessed Valuation Based Revenues Property Taxes...3 Taxable Retail Sales Based Revenues...3 Gross Business Income Based Revenues...4 Population Based Revenues...5 Miscellaneous Based Revenues...6 Utility Taxes...6 Licenses and Permits...8 Interest...9 Restricted Revenues...9 Revenues Restricted to Capital Purposes...9 Revenues Restricted To Wastewater and Surface Water Management...10 SUMMARY TABLES...11

28 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page iii List of Tables Table 1 Summary Results from Fiscal Bases Report...1 Table 2 Calculation of Total Taxable Property...3 Table 3 Taxable Retail Sales and Sales Tax...3 Table 4 Business and Occupation Tax Businesses Already Paying Sales Tax...4 Table 5 Business and Occupation Tax Totals Including Home Businesses...4 Table 6 State Per Capita Revenues...5 Table 7 Criminal Justice Sales Tax...5 Table 8 Summary of Per Capita Revenues...6 Table 9 Utility Tax Basis...7 Table 10 Utility Taxes...8 Table 11 Licenses and Permits...9 Table 12 Interest...9 Table 13 Wastewater and Stormwater Revenues Table 14 Revenue Rates and Calculations... 11

29 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 1 REVENUE APPROACH The revenue projections in this analysis focus primarily on the general fund. The revenue analysis also includes projections for two restricted revenues outside the general fund revenues restricted to stormwater management and to wastewater management. The analysis does not address special levies for bonded indebtedness previously incurred by the City of Tacoma, utility fees, or grants for specific capital projects, nor other enterprise funds, as they are self-supporting by design and are also not affected by the potential annexations. All the revenues estimated join the corresponding estimated costs in the Fiscal Balance Report which compares the two and offers alternatives for bridging any shortfalls. The revenue projections in this study were developed in three steps. (1) First, the set of base parameters controlling the revenue was developed. For example, with property tax, the base parameter is the taxable assessed valuation in each of the Potential Annexation Areas (PAA s.) Most of the important fiscal parameters, such as taxable assessed valuation, population, taxable retail sales, etc. were developed in the companion Area Profiles and Fiscal Bases Report. For convenience, they are repeated here in Table 1, Summary Results from Fiscal Bases Report. 1 A few final parameters are developed in this current Revenue Report. (2) Next, the set of appropriate rates at which each of the revenues is collected was assembled. (3) Finally, the revenues were calculated. Usually the calculations are so simple that they are just shown within the summary table itself. This report computes each revenue stream following these three steps. The following table summarizes each of the bases used for estimating revenues that would be generated in each PAA. The existing City of Tacoma fiscal bases are shown also for comparative purposes. Note that the populations below are inflated beyond the Census figures for REVENUE BASE Total Taxable Real Assessed Valualtion Browns Point - Dash Point Fife Heights City of Tacoma $ 288,000,000 $ 86,000,000 $ 12,456,000,000 Taxable Retail Sales $ 8,567,000 $ 3,943,000 $ 3,987,365,000 Population 2,230 1, ,800 Real Estate Sales $ 21,325,000 $ 6,847,000 n/a Table 1 Summary Results from Fiscal Bases Report 1 In a few cases the fiscal bases need more detail. These details are developed in the Revenue Notes section, immediately below.

30 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 2 Revenue calculations are quite straightforward using this fiscal base, rate and calculation approach to presenting data, removing apparent calculation complexity and allowing the reviewer to scrutinize assumptions and policy choices. All rates and revenue calculations are summarized together at the end of this report in Table 14, Revenue Rates and Calculations, page 11.

31 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 3 REVENUE NOTES Assessed Valuation Based Revenues Property Taxes The Area Profiles and Fiscal Bases Report shows calculations of the taxable real property for each PAA. Although this constitutes the vast majority of the property tax base and the parameter most widely reported, this figure must be adjusted to include personal property, or property used in business but not tied to land as is real property. The personal property adjustment is estimated at the same percentage of personal to real property as the County reports for the entire County and the results shown in Table 2, below. Taxable Assessed Valuation Real Property (as reported in Area Profiles and Fiscal Bases Report) Factor Browns Pt. - Dash Pt. Fife Heights $ 288,000,000 $ 86,000,000 Personal Property (Factor = Personal / Real, County totals) 3.37% $ 9,706,000 $ 2,898,000 TOTAL TAXABLE PROPERTY $ 297,706,000 $ 88,898,000 Table 2 Calculation of Total Taxable Property Taxable Retail Sales Based Revenues Sales tax computation is a simple product of taxable retail sales for the each PAA (calculated in the Area Profiles and Fiscal Bases Report) and the net distribution of the local sales tax 2, as shown in SALES TAX Taxable Retail Sales Local Rate (as distributed to Cities) Sales Tax Browns Point - Dash Point $ 8,567, $ 72,000 Fife Heights $ 3,943, $ 33,000 Total $ 12,510,000 $ 105,000 Table 3 Taxable Retail Sales and Sales Tax 2 85% of the 1% local options sales tax, less 1% to DOR: 0.85 x 0.01 x 0.99 =

32 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 4 Gross Business Income Based Revenues The very small amount of commercial land and very low taxable retail sales base in each of the PAA s indicate that gross business income and the associated business and occupation tax revenues can also be expected to be modest. Projections are made below first for identified businesses already filing taxable retail sales and paying sales tax in the PAA s and then augmented by an expected number of small, home operated businesses. For each of the identified businesses filing taxable retail sales, this study used the business s detailed class 3 to scale its reported taxable retail sales by state wide average ratios of gross business income to taxable retail sales for that particular type of business. The resulting projection was then multiplied by the City rate for services, as most of the businesses are services. Gross Business Income Browns Point - Dash Point Fife Heights B&O Rate Browns Point - Dash Point B&O Tax Fife Heights Retail $ - $ - Wholesale $ - $ - Manufacturing $ - $ - Service $ 19,007,000 $ 13,665, $ 76,000 $ 55,000 Retail Service $ - $ - International Investment $ - $ - Total Base $ 19,007,000 $ 13,665,000 $ 76,000 $ 55,000 Table 4 Business and Occupation Tax Businesses Already Paying Sales Tax City of Tacoma Browns Point - Dash Point Fife Heights Households 76,152 1, Households (% of Tacoma) 100.0% 1.4% 0.6% Home Businesses B&O Tax Revenue Estimated for Home Businesses B&O Tax Revenue Estimated From Businesses Already Reporting Sales Tax $ 200,000 $ 3,000 $ 1,000 $ 76,000 $ 55,000 Total Revenue $ 79,000 $ 56,000 Notes: Estimated revenue to the entire City for home based businesses for the year 2004 courtesy of Jodi Trueblood, Tacoma Tax and License Division, 2/15/05. This estimate is for 546 businesses reporting and is considered accurate to about +/-$5,000. Table 5 Business and Occupation Tax Totals Including Home Businesses 3 The study used the North American Industry Classification System (NAICS 2002) 6 digit codes, a very detailed classification of business types.

33 Population Based Revenues City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 5 Several revenue streams distributed by the State to local jurisdictions vary strictly with population. They are most appropriately lumped together as a per capita figure. The state shared revenues are shown in Table 6, below. 4 State Shared Revenues Per Capita Amount Gas Tax (unrestricted) $ Liquor Board Profits $ 7.30 Liquor Tax $ 3.90 Criminal Justice (former CTED programs) $ 0.73 Criminal Justice (population based) $ 0.22 Total $ Table 6 State Per Capita Revenues In addition, the state distributes the proceeds of the 0.1% criminal justice sales tax, enacted in Pierce County and a few other counties, 10% to the county and 90% to the county and its cities based on population. This analysis uses the distribution to Tacoma as anticipated in the City s 2003 budget to infer the per capita rate for pro rata projection to the PAA s, shown in Table 7, below. Criminal Justice Sales Tax Per Capita Amount Tacoma 2003 Actual $ 2,425,001 Tacoma 2003 Population 196,800 Distribution Per Capita $ Table 7 Criminal Justice Sales Tax The calculation of each of the above population based revenues is shown in Table 8, below. 4 Source: Municipal Research Services, Budget Suggestions for 2005, 8/2004

34 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 6 Per Capita Distributions Per Capita Rate Browns Point - Dash Point Fife Heights Population, ,230 1,346 State Shared Revenues - Unrestricted State Shared Revenues - Gas Tax Criminal Justice Sales Tax $26.48 $59,000 $36,000 $6.70 $15,000 $9,000 $12.32 $27,000 $17,000 Total $45.50 $101,000 $62,000 Table 8 Summary of Per Capita Revenues Miscellaneous Based Revenues Utility Taxes Utility taxes on electricity, gas, garbage, water, wastewater and cable internet are substantial sources of revenue to the City of Tacoma. For the public utilities already serving the PAA s (e.g., water and power), there would be no increase in utility tax revenue to the City. Those utilities pay a utility tax to the general fund on gross revenues that already include revenue from the PAA s. In the case of water, for which the PAA s pay a higher rate than current City residents do, the City would actually receive less utility tax upon annexation. For private utilities, there will be a change in the utility tax revenue if the PAA s are annexed. Telephone and natural gas vendors, for example, would pay a percentage of revenue collected in the PAA s to Tacoma that they do not currently pay because the area is unincorporated. One question that remains unanswered as of this report and that would be discussed between the City and Pierce County upon annexation is the question of whether a sewer utility tax would be paid as long as the County managed the sewer transmission system. Table 9, below, describes the rates paid by each utility. Table 10, which follows, shows the utility tax revenue that would accrue to the City upon annexation.

35 Revenue Report 4/12/05 FINAL DRAFT Page 7 UTILITY Tax on City s Public Utilities Tax on City's Private Utilities Citation Rate 05-'06 Budget Citation Rate 05-'06 Budget Current Status Effect of Annexation Power 8% $ 36,900,000 6A.50 (=new) 8% $ - Tacoma Electric allready serves both PAA's. [No change in revenue] Cable TV 8% $ 1,700,000 6A.40 8% $ 3,200,000 Water 8% $ 7,575,000 All 6A.100 Solid Waste 8% $ 7,423,000 6A.50 (=new) Sewer 8% $ 9,669,000 8% $ - Tacoma does not currently serve either PAA. Tacoma Water already serves both PAA s. (Within TPU, only water has a differential rate for inside and outside the City.) Private collector currently serves the PAA s. Murrey Disposal would continue to provide waste collection for 7 years County currently serves the PAA s in whatever areas are sewered. NEW REVENUE TO CITY LOST REVENUE TO CITY (as the charges for water will drop 8% if the PAA's are annexed to the City) NEW REVENUE TO CITY [Subject to negotiation] Rail 8% $ 2,276,000 Rail service not affected by annexation [No change in revenue] Natural Gas 6A.90 6% $ 5,075,000 Telephone 6A.40 6% $ 8,700,000 Cellular Tel. & Pager 6A.40 6% $ 5,481,000 Puget Sound Energy currently serves both PAA s. Various private providers, which upon annexation would become subject to City's utility tax. Various private providers, which upon annexation would become subject to City's utility tax. [No change in revenue] NEW REVENUE TO CITY NEW REVENUE TO CITY Table 9 Utility Tax Basis

36 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 8 UTILITY Power Change in Revenue Browns Pt. - Dash Pt. Fife Heights Total See Note Cable TV $ 18,000 $ 9,000 $ 27,000 1 Water $ (5,000) $ (2,000) $ (7,000) 2 Solid Waste $ 27,000 $ 14,000 $ 41,000 3 Rail Natural Gas Telephone $ 43,000 $ 22,000 $ 65,000 4 Cellular Tel. & Pager $ 21,000 $ 11,000 $ 32,000 5 Totals: $ 104,000 $ 54,000 $ 158,000 Notes on calculation 1- Average monthly bill for a family of 3: $40. Source: Monique Wells, Tacoma Public Utilities, 3/14/05. Revenue calculated here assumes 50% penetration of PAA households. 2- Upon annexation, the differential in inside/outside rates causes a loss to the water utility in revenue ($58,874 Browns Pt. - Dash Pt., $21,975 Fife Heights) upon which the 8% tax is based. 3- This revenue assumes an average of 2 solid waste cans per household at the Murrey disposal rate approved by WUTC. Revenue is then apportioned between the PAA's by number of households. 4- Assumes a $750 average annual household expense for telephone and 100% penetration. 5- Assumes $60 per month cell phone plan (Verizon average base = $58) and 50% penetration (Cascadia Consulting Group: E-Waste Generation in Northwest Washington, 11/21/2003) Table 10 Utility Taxes Licenses and Permits Though not actually tracked as an enterprise fund at cities, the revenues of building permit review are often designed to cover permit review costs over the long term. Accordingly, no revenues are projected here, just as no net costs are projected in the City Expenditures Report for the Building and Land Use Services Division of Public Works. Businesses licenses will generate a small amount of revenue. The Department of Revenue retrieval for taxable retail sales found 65 businesses in Browns Point - Dash Point with taxable retail sales and 12 in Fife Heights. If three quarters of these businesses and the home base businesses projected here have gross receipts above the minimum threshold for the annual business license fee of $72, the $72 business license fee would generate roughly $4,000 and $1,000. These figures are shown in Table 11, below.

37 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 9 Browns Point - Dash Point Fife Heights Businesses Already Reporting Sales Tax Home Busineses 8 3 Total Business Estimated 3/4 above threshold $ 72 $ 72 Total Revenue (rounded to $1,000) $ 4,000 $ 1,000 Table 11 Licenses and Permits Interest Interest income is estimated as a direct ratio of the increase in assessed valuation of the City due to annexation of the PAA s and shown in Table 12, below. City of Tacoma Browns Point - Dash Point Fife Heights Assessed Valuation $ 12,456,000,000 $ 288,000,000 $ 86,000,000 (% of Tacoma) 100.0% 2.3% 0.7% Investment Interest $ 4,359,800 $ 100,805 $ 30,101 Total Revenue $ 101,000 $ 30,000 Table 12 Interest Restricted Revenues Revenues Restricted to Capital Purposes Two major revenues are dedicated to capital expenses: the real estate excise tax and a portion of the gas tax. 1. The excise tax totals 0.5% of real estate sales. Annual real estate turnover and sales were projected earlier in the Area Profiles and Fiscal Bases Report. 2. The restricted portion of the gas tax is a strict per capita revenue. Both revenue calculations are shown directly on Table 14, Revenue Rates and Calculations, on page 11

38 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 10 Revenues Restricted To Wastewater and Surface Water Management. The City of Tacoma s Environmental Services Division provides wastewater and stormwater management services and operates as an enterprise fund, in which revenues are to cover the cost of service. The City does not currently provide these services to the PAA s. If the PAA s are annexed, all property owners will be subject to City sewer and stormwater fees. Baseline sewer fees are related to parcel units served and are augmented by a fee per unit of water used. Surface water management fees are related to the extent of impervious surface on the parcel. The revenues that would be captured from the PAA s were projected by the City s Public Works Department. The process of this calculation is described in Appendix 2 of this report 5 and summarized in Table 13, below. Note that these are not revenues to the General Fund, but rather to separate utility funds. SEWERS Browns Point - Dash Point Annual Revenue Fife Heights Total Sanitary $ 225,000 $ 198,000 $ 423,000 Storm $ 219,000 $ 159,000 $ 378,000 Total $ 444,000 $ 357,000 $ 801,000 Table 13 Wastewater and Stormwater Revenues 5 Christopher Johnson, Environmental Services Science and Engineering Environmental, 3/23/05.

39 City of Tacoma: Browns Point - Dash Point / Revenue Report 4/12/05 FINAL DRAFT Page 11 SUMMARY TABLES Table 14, below,shows each of the revenue sources described above and also provides the amounts generated within the existing City of Tacoma for comparison. As noted previously, property tax is the largest source of revenue. The predominantly residential nature of both PAA s is reflected in their relatively lower property tax revenue estimates compared to the existing City of Tacoma. Each of the other tax sources generates a relatively equal, but small, share of total revenue that can be anticipated from the PAA s. For reference purposes, one half the Tacoma City Biennial Budget is listed in the final column of the table for selected comparable line items. REVENUE Base Rate Units Browns Pt - Dash Pt Fife Heights Total for Both PAA's Tacoma 2005 Budget Municipal Levy Sales Tax Business and Occupation Tax Tot. Tax. Ass'd Val. Taxable Retail Sales [6 Rates Classes] $ / $1,000 $ 1,137,000 $ 342,000 $ 1,479,000 $ 39,410, $ / $ $ 72,000 $ 33,000 $ 105,000 $ 39,346, to $ / $ $ 79,000 $ 56,000 $ 135,000 $ 36,099,535 State Shared Revenues Population $ $ / capita $ 59,000 $ 36,000 $ 95,000 Criminal Justice Population $ $ / capita $ 27,000 $ 17,000 $ 44,000 Utility Taxes [Various] 0.06 to 0.08 $ / $ $ 104,000 $ 54,000 $ 158,000 $ 32,771,500 Licenses and Permits [Various] $ 4,000 $ 1,000 $ 5,000 $ 5,426,498 Investment Interest [Various] $ 50,000 $ 15,000 $ 65,000 $ 2,179,900 Total Annual Revenues [Unrestricted] Real Estate Excise Tax Real Estate Sales $ 1,532,000 $ 554,000 $2,086, % $ / $ $ 107,000 $ 34,000 $ 141,000 Gas Tax (restricted portion) Population $ 6.70 $ / capita $ 15,000 $ 9,000 $ 24,000 Total Annual Revenues $ 122,000 $ 43,000 [Restricted to Capital] $165,000 Water Fees [Various] $ (59,000) $ (22,000) $ (81,000) Total Annual Revenues $ (59,000) $ (22,000) [Restricted to Water Supply] -$81,000 Stormwater Fees [Various] $ 219,000 $ 159,000 $ 378,000 Total Annual Revenues $ 219,000 $ 159,000 [Restricted to Storm Water] $378,000 Wastewater Fees [Various] $ 225,000 $ 198,000 $ 423,000 Total Annual Revenues [Restricted to Waste Water] $ 225,000 $ 198,000 $423,000 Table 14 Revenue Rates and Calculations

40 Fife Heights & Browns Point Dash Point Annexation Study Prepared for the City of Tacoma City Expenditures Report Economic Development Committee April 12, 2005 FINAL DRAFT Nesbitt Planning and Management, Inc. In conjunction with ADR Options Consulting, Inc.

41 Expenditures Report 4/12/05 Final Draft - Page i EXECUTIVE SUMMARY EXECUTIVE SUMMARY This report is the third product in a series of analyses and reports prepared to assist with a decision whether the City of Tacoma should annex the potential annexation areas (PAA s) of Fife Heights and / or Browns Point/Dash Point. The report projects the costs that will result for the City of Tacoma should the PAA s be annexed. A previous report projected the revenues that would be generated for the City by annexation of these areas. The cost and revenue comparison will be one of the elements used by the Tacoma City Council and voters of the annexation areas to determine whether the PAA s shall be annexed. In this report the incremental costs that the City of Tacoma would incur if the PAA s are annexed are described. These include the incremental annual costs and necessary incremental full time equivalents in staff (FTE s) plus certain one-time costs that might be expended in the first year or gradually over several years but then would not recur. The report identifies each of these two types of costs for each department and then provides a cost summary. Each potential annexation is costed separately but is reported side by side for convenience. Together, the annexations would cost the City of Tacoma a total of $1,999,000 annually, with one-time costs as high as $4,043,000, if a new fire station is constructed to serve the PAA s. A total of 14.7 new FTE s would be required. Service Provider Browns Point - Fife Heights Dash Point Cost FTE's Cost FTE's Tacoma Police Department $ 593, $ 290, Public Works - Streets and Grounds $ 57, $ 49, Public Works - Engineering $ 46, $ 39, Tacoma Fire Department $ 802, $ 123, Grand Total (General Fund) $ 1,498, $ 501, Tacoma Water $ 59, $ 22, Grand Total (Water Fund) $ 59, $ 22, Public Works - Storm Water $ 192, $ 151, Grand Total (Storm Water Fund) $ 192, $ 151, Public Works - Waste Water $ 271, $ 9, Grand Total (Waste Water Fund) $ 271, $ 9, Table 1 Summary Annual Costs and FTE s Upon Annexation

42 Expenditures Report 4/12/05 Final Draft - Page ii EXECUTIVE SUMMARY Service Provider Browns Point - Dash Point Cost Fife Heights Cost Fire and EMS (new station option)* $ 3,712,000 $ - Tacoma Police Department $ 153,000 $ 93,000 City Council redistricting study $ 30,000 $ 20,000 Growth Management Division comp. plan and zoning code revisions $ 25,000 $ 10,000 Grand Total (General Fund) $ 3,920,000 $ 123,000 Hylebos Basin Plan recommended capital projects $ 330,000 $ 270,000 Grand Total (Storm Water Fund) $ 330,000 $ 270,000 Table 2 Summary One-Time Costs Upon Annexation

43 Expenditures Report 4/12/05 Final Draft - Page iii Table of Contents Table of Contents EXECUTIVE SUMMARY...i Table of Contents...iii List of Tables...v List of Figures...vii COSTING APPROACH...1 City Council...3 City Manager...5 General Services - Overview...6 General Services Administration...7 General Services City Clerk...8 General Services Communications Division...9 General Services Asset Management General Services Fleet General Services Radio Communications Finance Economic Development Overview and Community Initiatives Economic Development Growth Management Economic Development Private Capital Human Resources Municipal Court Legal Library Police Fire Public Works - Overview Public Works - Director s Office Public Works - Administration Public Works - Solid Waste Management Division Public Works - Environmental Services Maintenance Division... 47

44 Expenditures Report 4/12/05 Final Draft - Page iv Table of Contents Public Works - Wastewater Management Operations Division Public Works - Science and Engineering Division Public Works - Construction Division Public Works Engineering Division Public Works Streets and Grounds Division Public Works Building and Land Use Services Division Tacoma Public Utilities - Light, Power & Click Tacoma Public Utilities - Water Department Metropolitan Park District COST SUMMARIES Summary of Annual Costs and FTE s Summary of One-Time Costs... 69

45 Expenditures Report 4/12/05 Final Draft - Page v List of Tables List of Tables Table 1 Summary Annual Costs and FTE s Upon Annexation...i Table 2 Summary One-Time Costs Upon Annexation...ii Table 3 Effect of Annexation on Council Districts...3 Table 4 City Council One-Time Costs...4 Table 5 Growth Management Division One-Time Costs Table 6 Current Annual Calls for Service and Response Times in the PAA s Table 7 Current Annual Calls for Service and Response Times in the PAA s Table 8 Projected Increase in Population in the PAA s Table 9 Projected Increase in Dispatched Calls for Service in the PAA s Table 10 Summary of Common Cost Drivers for Police Service Table 11 Police Total Annual Costs and FTE s Table 12 Police Total One-Time Costs Table 13 Area 2004 Fire and EMS Incident Volumes and Approximate Response Times Table 14 Fire Operating Costs: Fife Heights Table 15 Fire Operating Costs: Browns Point Dash Point Table 16 Fire Operating Costs Additional Net Costs For City Budget Table 17 Fire: One-Time Costs Table 18 Stormwater and Wastewater Annual Costs Table 19 Stormwater One-Time Costs Table 20 Department: Public Works Engineering Total Annual Costs and FTE s Table 21 Potential Annexation Area (PAA) Road Units Table 22 Road Types in the PAA s Table 23 Road Types in Northeast Tacoma Table 24 PAA Roads: Pavement Condition Ratings (Miles) Table 25 PAA Roads: Pavement Condition Ratings (Percentage of Total Miles) Table 26 Northeast Tacoma Roads: Pavement Condition Ratings (Miles) Table 27 Northeast Tacoma Roads: Pavement Condition Ratings (Percentage of Total Miles) Table 28 PAA Roads: Unit Costs of Maintenance Table 29 Department: Public Works Streets and Grounds Total Annual Costs and FTE s... 62

46 Expenditures Report 4/12/05 Final Draft - Page vi List of Tables Table 30 Revenue Loss to TPU Water Department Table 31 Cost Summary Annual Costs and FTE s Table 32 Cost Summary One-Time Costs... 69

47 Expenditures Report 4/12/05 Final Draft - Page vii List of Figures List of Figures Figure 1 Pierce County East Patrol Area, District PC01 (Shown Shaded) Figure 2 Tacoma Police Department Reporting Blocks in District 1-4 (Shown Shaded) Figure 3 Response Time by Reporting District Figure 4 Fire and EMS Service Providers Figure 5 Area 2004 Fire and EMS Dispatches Figure 6 TFD Station 3 and Browns Point Response Areas Figure 7 TFD Station 3 and Alternative Browns Point Response Areas Figure 8 Average Pavement Condition Scores - PAA s and Northeast Tacoma... 60

48 Expenditures Report 4/12/05 Final Draft - Page 1 COSTING APPROACH COSTING APPROACH Two categories of costs to the City of Tacoma of annexing the PAA s are calculated in this report. Annual Costs Annual costs are the incremental costs to each department for conducting the regular City business related to the PAA s if annexed. These annual costs are stated both in dollars and in FTE s. One-Time Costs One-time costs are the initial costs to the City upon annexation which would not recur. These are the sometimes large incremental costs needed to get a department expanded (e.g., providing equipment for new staff) and the costs related to catching up bringing a PAA up to City standards. In some cases, the catch-up costs may be negotiable with Pierce County as costs the County should reasonably be expected to bear. To develop these pairs of costs for each department, the following approach is taken. 1 The analysis determines whether the department has direct costs associated with the annexation, or whether the department s operating costs are fixed, that is to say, there are no variables in the department s costs that would change upon annexation. An example of a department with fixed costs is the City Manager s Office, where the responsibilities to guide and direct the city departments would not change upon annexation. For departments with direct costs, cost drivers are identified. These are the primary factors that affect the department s costs. For example, a key cost driver in the Public Works Streets and Grounds Division is road/street miles. For Police, typical cost driver are dispatched calls for police service, population and commercial area. Capital costs Capital costs are included among the one-time costs and are not presented separately. Most departments do not have capital costs affected by the annexations. Note on Rounding of Estimates and Treatment of Fractional FTE s The calculations in this report are obviously automated and therefore in some sense are exact. But all calculations rely upon assumptions, each one of which is debatable and many of which have no absolute, right answer. In such situations it is very easy to overstate the reasonable accuracy of calculated values. On the other hand, too rigorous rounding can introduce its own distortion as when several small numbers are all rounded down to zero before aggregation. The rounding errors with small numbers of fractional positions could be substantial. The authors choose to make all the calculations for a department s costs using all digits given, regardless of how significant the digits are but then round the department s totals to the nearest $1,000 and to the nearest 0.1 of an FTE. 1 Costs are based on adopted departmental budgets for the biennium.

49 Expenditures Report 4/12/05 Final Draft - Page 2 COSTING APPROACH We choose not to round to whole FTE s or even half FTE s, however, even though this is the practical limit in most instances on hiring staff. The decision to round up or round down is most appropriately made as part of budgeting, when relevant externalities can be weighed in to tip the balance one way or the other. Structure of this Paper This paper is organized to discuss the departments that are financed by the General Fund and/or are internal service departments first, followed by departments that operate with Enterprise Funds. Not all of the enterprise fund departments are described here, because there are many that are not affected by the annexation. The enterprise funds established for debt service on particular bond issues or for financing specific facilities, such as the list that follows, are not addressed in this paper. Thea Foss Waterway Authority Union Station Convention Center & Bicentennial Pavillion Baseball Park - Cheney Stadium Tacoma Dome Performing Arts General Services: Tacoma Narrows Airport Tacoma Public Utilities Railroad

50 Expenditures Report 4/12/05 Final Draft - Page 3 City Council City Council The Tacoma City Council is the legislative body of Tacoma s government and is responsible for adoption of City legislation and budget. The City Council is comprised of the Mayor and eight Council members, five of whom are elected from districts and three of whom, plus the Mayor, are elected at large. Tacoma has a Council-Manager form of government, and the City Manager s costs are budgeted in a separate department. The City Council budget includes salaries, benefits and supplies for the eight Council members. The cost of City Clerk services is budgeted in the General Services Department. Cost Methodology The number of City Council positions is established in the City Charter and would not change upon annexation of these PAA s. Therefore, there would be no operating cost impacts from annexation. However, if the annexations are approved, the Browns Point/Dash Point and Fife Heights PAA s would increase the size of the adjacent Council district, District 2, by approximately 9%. The most recent redistricting of Council districts was done in late 2001, and the range of population 2 per district as of that time was quite small, less than 0.1% variation among the districts (from 38,689 population in District 4, to 38,732 population in District 5). Although State statute (RCW Chapter 29A.76) only requires redistricting in response to new census data, as a matter of policy, the addition of the PAA s to the City of Tacoma may raise a question of whether redistricting should be considered to reestablish population equity. If a redistricting effort were undertaken, this would add a one-time cost to the City s budget. Council District Population Browns Point Dash Point Fife Heights Population post- Annexation % Increase % of City after Annexation 1 38, % 38, % 2 38, % 1,093 1,003 1,216 42, % 21.35% 3 38, % 38, % 4 38, % 38, % 5 38, % 38, % Total 193, % 1,093 1,003 1, , % % Table 3 Effect of Annexation on Council Districts Cost Drivers Fixed Cost. 2 The populations for the PAA s shown here are for 4/1/2000.

51 Expenditures Report 4/12/05 Final Draft - Page 4 City Council Cost Calculation Annual Costs There are no incremental costs in this department due to either potential annexation. One-time Costs One-Time Expenditures Browns Point - Dash Point Fife Heights Total City Council redistricting study $ 50,000 Table 4 City Council One-Time Costs

52 Expenditures Report 4/12/05 Final Draft - Page 5 City Manager City Manager The City of Tacoma s City Manager Department is responsible for direction to and management of all other City departments. The Department s budget represents the cost of the City Manager and support staff. The scope and function of these positions, and therefore the Department s budget, would not change upon annexation of the Fife Heights and Browns Point/Dash Point PAA s. Even with increases in FTE s in other executive branch departments, the number of departments managed by this Executive Department would not be affected. Cost Methodology The City Manager s Office costs are proportionate to the number of staff in the office. This is a fixed cost which would not vary upon annexation. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

53 Expenditures Report 4/12/05 Final Draft - Page 6 General Services - Overview General Services - Overview The General Services Department includes a variety of divisions that that allow other departments to focus on their core lines of business. It also hosts certain facilities and services that are citywide in nature and not related to other departmental functions. The Department s Divisions include: City Clerk, which provides Council staff support, records management, office automation, office systems and information systems. Communications Division, which provides community relations, graphic services, telecommunication and technology services, franchise administration and municipal television. Asset Management, which is the city s real estate management function and includes building management and facilities maintenance, real estate services and right of way, and the City s parking facilities. Among the properties managed in this unit are the Pantages, Rialto, Broadway theaters and the SE Neighborhood community center. Fleet, which is responsible for the City s vehicles. Radio Communications, which is responsible for the City s radio communication systems. Tacoma Narrows Airport (not described herein, as it would not be affected by the annexation). For the General Services Department, there would be few, if any, impacts from annexation.

54 Expenditures Report 4/12/05 Final Draft - Page 7 General Services Administration General Services Administration General Services Administration provides oversight to assure accomplishment of City goals. Some of its costs are charged out to other units in the department. The scope and size of General Services Administration would not change upon annexation of the PAA s, and thus there are no cost increases in this unit. Cost Methodology Costs in this unit are driven by the number of FTE s in the unit. There would be no changes in Administration staff upon annexation of the PAA s. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

55 Expenditures Report 4/12/05 Final Draft - Page 8 General Services City Clerk General Services City Clerk The City Clerk's office is responsible for documenting and retaining the official record of all formal meetings of the City Council, for acting as the custodian of the city seal and official city records, furnishing sample forms for citizens' petitions, serving as the registrar of voters for the city, processing damage claims, and issuing special event permits. Cost Methodology The City Clerk s office is a fixed cost that would not be affected by annexation. There would be no need for additional employees in the City Clerk s office from annexation of these PAA s. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

56 Expenditures Report 4/12/05 Final Draft - Page 9 General Services Communications Division General Services Communications Division The Communications Division consists of five sections, which include Community Relations, Franchise Services, Graphic Services, Telecommunications and Technology Services and TV Tacoma, the City s municipal television channel. Within the Communications Division, the Telecommunications and Technology Services Section is responsible for the installation, administration and maintenance of the City government voice communications network, local and long distance services, wiring and cabling for voice, video, and data, call accounting services, teleconferencing services, toll free services, cellular telephones, pager services, etc. In addition, Telecommunications provides and extends videoconferencing services to outside agencies. Technology Services is responsible for providing computer system programming support for the General Services Department. The Franchise Administration sets policy, develops regulations and monitors federal and state level industry and regulatory actions. Cost Methodology Most of the costs related to the Communication Division are fixed costs that would not vary upon annexation. However, a portion of the Telecommunications and Technology Services costs would increase in proportion to City FTE s. For each additional City employee added to the organization, a telephone, with shared costs and long distance would cost between $40 and $65 per month. However, these costs are budgeted in the operating departments and transferred to the General Services Communications Division fund; therefore, for this analysis, this Division s costs are assumed to be fixed costs not affected by annexation. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

57 Expenditures Report 4/12/05 Final Draft - Page 10 General Services Asset Management General Services Asset Management The Asset Management Division of the General Services Division is responsible for maintenance and repair of the Rialto, Pantages, and Broadway Theaters; Southend Neighborhood center; and general city facilities, including parking garages. It is also responsible for management of the City s real estate portfolio. The Division has an administrative unit as well as budget allocations for each specific function (some of these, such as the Parking Garage and the theaters are enterprise funds). Cost Methodology All of the new FTEs that would be needed to support the PAA s if annexed would be incurred in police, fire and public works; none would occupy general government offices or require Asset Management Division support. There is sufficient parking capacity to handle any new City FTE s that would be added as a result of annexation. The remaining functions in this division are all fixed costs. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

58 Expenditures Report 4/12/05 Final Draft - Page 11 General Services Fleet General Services Fleet The Fleet unit is responsible for maintaining the City s vehicles. Fleet is an internal service with a budget established by fees paid by other agencies for services rendered. Cost Methodology For every vehicle added to support new FTE s in Fire, Police or Public Works, Fleet Maintenance receives a monthly fee for maintenance and vehicle replacement reserve. These added costs would be shown, in addition to the original purchase cost of any new vehicle, in the primary department s budget as a transfer to Fleet; therefore, no cost increases are indicated for Fleet itself. Cost Drivers Reflected in other departmental budgets. Cost Calculation There are no incremental costs in this department due to either potential annexation.

59 Expenditures Report 4/12/05 Final Draft - Page 12 General Services Radio Communications General Services Radio Communications The Radio Communications unit is responsible for the City s radio communication systems. Radio is an internal service with a budget established by fees paid by other agencies for services rendered. Cost Methodology As for Fleet, radio costs are established by fund transfers from operating departments whose employees use the radios. Radio costs would increase in proportion to the number of FTE s using radios that would be added as a result of annexation. Because this report addresses radios as a one-time cost in the affected operating departments, this analysis treats the General Services Radio Communication budget as a fixed cost. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

60 Expenditures Report 4/12/05 Final Draft - Page 13 Finance Finance The City of Tacoma s Finance Department is responsible for providing financial expertise and services to support strategic planning and financial accountability in the City. Units in this department include Accounts Payable, Tax and Licenses, Purchasing, Local Employment and Apprenticeship Training Program (LEAP), Historically Underutilized Business Program (HUB), and Office of Management, Budget and Analysis (OMBA). The Department s scope includes services for all of the City s funds such as rate analysis, revenue forecasting, budget preparation, financial plan analysis and preparation, financial reporting; grant writing; payroll processing, vendor payments, financing by and debt service payment of bonds, cash control and investments. Cost Methodology The Finance Department s costs are fixed costs relative to this annexation. The annexations, if approved, would not affect the functions of this department. Cost Drivers Fixed costs. Cost Calculation There are no incremental costs in this department due to either potential annexation.

61 Expenditures Report 4/12/05 Final Draft - Page 14 Economic Development Overview and Community Initiatives Economic Development Overview and Community Initiatives The City of Tacoma s Economic Development Department is responsible for stimulating Tacoma's economic activity and strengthening the City s position as a thriving urban, cultural and economic center by establishing Tacoma as a destination city, attracting investment that builds a vibrant economy, strengthening the heart of the city, and enhancing neighborhood livability. The Department s budget supports the Department s Administration, Private Capital Division, Community Initiatives Division, and Growth Management Division. Economic Development Community Initiatives The Community Initiatives Division of the Economic Development Department is responsible for fostering attractions that encourage investment, tourism, and international exchange. Included in this Division are the Arts Commission, Historic Preservation Office, Sister Cities Program, and the GIS Analysis & Data Services Section that provides information to attract new economic development and assist existing businesses in expansion and relocation efforts. The Section oversees the City's economic development website and has developed TacomaSpace.com, an innovative on-line "multiple listing service" for commercial properties to find the right location for business in downtown Tacoma. Cost Methodology Except for projects related to amendments to the City s GIS maps and analysis of the growth management issues presented by the PAA s, this analysis assumes the Department s costs are fixed and would not be affected by the annexation of these areas. The PAA s are primarily residential neighborhoods that would not generate new needs for this Department s services and funds. Cost Drivers Fixed costs. Cost Calculation There are no incremental costs in this department due to either potential annexation.

62 Expenditures Report 4/12/05 Final Draft - Page 15 Economic Development Growth Management Economic Development Growth Management The Growth Management Division looks to Tacoma's future use of land, transportation, housing opportunities, zoning, environment, comprehensive planning and open space; linking them with the utilities and other capital facilities needed to support them as required by the state Growth Management Act. This division is comprised of the following two sections, both of which work together to plan the future of Tacoma: Housing and Neighborhood and Transportation Planning. The Housing Development Section is responsible for providing services and technical assistance to lowincome homeowners and homebuyers. They administer the Home Repair Program, which helps lowincome, elderly and disabled citizens maintain their homes. Besides repairs, a variety of loans are available to assist residents in becoming homeowners and to help homeowners rehabilitate their homes. In addition, the City of Tacoma offers tax incentives for multi-family housing. The Neighborhood and Transportation Planning Section is responsible for Tacoma's comprehensive plan, as well as other neighborhood plans, studies, projects and land use issues. This section provides staffing support for the Planning Commission, as well as guidance to the eight Neighborhood Councils and the Community Council. This section is also responsible for the development, amendment and implementation of the Transportation Plan and Program, the Commute Trip Reduction Plan and the Nonmotorized Transportation Plan. They also conduct travel demand forecasting, parking analysis and traffic studies. In the area of capital facilities, they develop and implement the Capital Facilities Plan and Program, establish level of service standards for capital facilities/services, and maintain capital improvement projects database. Cost Methodology The Housing programs are federally funded with support from Washington State trust funds. Eligibility for these programs is citywide, so if the PAA s are annexed to the City, any qualified citizen could receive loan funding from this program. However, all of the City s costs in this program are funded by the grant agencies and the city would not incur any additional out of pocket expense as a result of annexing these PAA s. For Neighborhood and Transportation Planning, the PAA s, if annexed, would add area to the Northeast Neighborhood Council and plan area, requiring some editing of the City s comprehensive plan and zoning code. This would be a one-time cost to the City. Cost Drivers Fixed costs.

63 Expenditures Report 4/12/05 Final Draft - Page 16 Economic Development Growth Management Cost Calculation Annual Costs There are no incremental costs in this department due to either potential annexation. One-Time Costs One-Time Expenditures Growth Management Division comprehensive plan and zoning code revisions Browns Point - Dash Point Fife Heights $ Total 35,000 Table 5 Growth Management Division One-Time Costs

64 Expenditures Report 4/12/05 Final Draft - Page 17 Economic Development Private Capital Economic Development Private Capital The Private Capital Division coordinates major development projects, business retention, recruitment, and expansion. Division staff are engaged in seeking private investments, creating jobs, and the development and redevelopment in the City of Tacoma. Through its Business Development Financing Assistance Programs, the Division helps prospective and current business owners get the funding they need to buy or improve small business. The Neighborhood Business District Revitalization Program works directly with business and property owners to stimulate and enhance neighborhood economics. The Neighborhood Business District Revitalization Program responds to the community s request that neighborhood enhancements be a top priority for the City of Tacoma, and it works to bring positive growth and sustainable improvements to the business communities by providing technical assistance. Strategies include communication between the business districts and staff, monthly meetings with the Cross District Association, which consists of representatives from each of the twelve business districts, and a bi-monthly newsletter that highlights the activities in each district and current tools being utilized by business districts in their efforts to revitalize. The staff also works regularly with district volunteers on long term planning for physical improvements (traffic calming, hazardous sidewalk, blight removal), streetscape enhancements (transit shelters, trash receptacles, benches, trees), promotional activities (special events, retail events, cooperative advertising), and economic restructuring activities (property inventories, marketing analysis, cluster analysis). Cost Methodology The focus of this Division is on neighborhood business districts. There is currently no such district in either PAA. Therefore, for this analysis, the Division s costs will be considered fixed, with no impact from annexation. At a later date, should City land use policies and the neighborhood interests change and interest is generated for development of a business district in either PAA, staffing resources would be examined and prioritized to accommodate that request. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

65 Expenditures Report 4/12/05 Final Draft - Page 18 Human Resources Human Resources The City of Tacoma s Human Resources Department is responsible for assuring effective recruitment, selection and retention of employees and timely and equitable implementation of the City s employment policies, procedures, practices and related legal requirements. The Department is further responsible for negotiation of employment contracts for represented employees and for staffing the City s Civil Service Board. Cost Methodology Any cost to the Human Resources Department as a result of annexation of the PAA s would be related to increases in City FTE s in other departments. In light of the small number of new FTE s that are indicated by this cost report, this department is treated in this analysis as a fixed cost. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

66 Expenditures Report 4/12/05 Final Draft - Page 19 Municipal Court Municipal Court The City of Tacoma s municipal court has a biennial budget of $8,874,378. Its FTEs include three municipal court judges, court administration, courtroom staff and defendant support services, such as assigned counsel and interpreters. The Municipal Court hears cases involving alleged violations of City of Tacoma ordinances including, but not limited to criminal charges (domestic violence offenses, assault, theft, drug offenses, etc.), criminal traffic offenses and traffic and parking infractions. The Municipal Court does not hear small claims or civil cases, which are heard by the Pierce County District Courts. Cost Methodology There is no information available upon which to base the projected demand for municipal court services that would result from annexation of the Fife Heights and Browns Point/Dash Point PAA s; therefore, the projected impact on the City s municipal court budget from the PAA s is based on the percentage of population increase that would result if the annexations are approved. Cost Drivers The cost driver for Municipal Court is population. However, although a larger population increase could incur the need for additional judges and/or support staff, with a population increase to the City of only 2%, it is assumed that caseload increases could be handled within existing budget. Cost Calculation There are no incremental costs in this department due to either potential annexation.

67 Expenditures Report 4/12/05 Final Draft - Page 20 Legal Legal The City of Tacoma s Legal Department acts as legal adviser to the City Council, the City Manager and all officers, departments and boards of the City. The Legal Department has a Civil and a Criminal division. The biennial budget for the Civil Division is $910,651, after adjusting for costs that are absorbed by the other City agencies that receive legal support from this Division. The biennial budget for the Criminal Division is $4,353,357. Cost Methodology The Civil Division would not be affected by annexation of the PAA s, as their work is fixed by the work of the other City agencies they support. The exception to this would occur if the annexation were politically difficult and attorneys were needed to respond to sensitive questions. However, the Criminal Division would likely be affected by caseloads, which, as for Municipal Court, are estimated based on the percentage of population increase created by the annexation of the PAA s. Cost Drivers Civil Division costs are fixed. The cost driver for the Criminal Division is population. However, although a larger population increase could incur the need for additional attorneys and/or support staff, with a population increase to the City of only 2%, it is assumed that caseload increases could be handled within existing budget. Cost Calculation There are no incremental costs in this department due to either potential annexation.

68 Expenditures Report 4/12/05 Final Draft - Page 21 Library Library The City of Tacoma has a library system with a main library and 9 branch libraries. The Kobetich Library, located on Browns Point Blvd. NE, in the Northeast Neighborhood, is the nearest to and is used by residents of the Browns Point/Dash Point PAA. That branch or the Mottet Library, at 3523 East G Street, is also closest to the Fife Heights PAA. Any resident of Tacoma may use these libraries at no cost. Non-residents must pay a fee of $51 to obtain a library card. The Library Department has a biennial budget of $21,015,877. Cost Methodology Because the library system is relatively stable, with inventory acquisition costs subject to annual budget decisions, Libraries are treated in this analysis as a fixed cost. No additional Library resources would be applied to serve the PAA populations if the PAA s are annexed. Similarly, if the PAA s are annexed, although the PAA residents would become eligible to use City libraries at no cost, the number currently paying for library cards is sufficiently slight to assume no significant financial impact from lost revenue to the City library system. Cost Drivers Although the City has a level of service standard, it depends on annual budget appropriations to be achieved. In light of the current budget constraints, no additional inventory or branches are contemplated and none would be added as a result of annexation. Thus, this cost item would be considered as a fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

69 Expenditures Report 4/12/05 Final Draft - Page 22 Police Police Police services are often both a major local government expense and one strongly sought by residents of annexing areas. Services range from basic police work like patrol, detective work, and special investigations, to other services such as jail services, traffic control and various community services. Pierce County. The Pierce County Sheriff s Department (PCSD) currently provides police services for both the Browns Point Dash Point and Fife Heights Potential Annexation Areas (PAA s.) The PCSD s patrol services are organized in 6 Patrol Areas, which are subdivided into 14 Districts and further into smaller Reporting Blocks. The PAA s comprise Reporting Blocks 501, 502 and 503 in District PC01 of the East Patrol Area. PC01 is quite dispersed. The District lies mainly between the East Side and South End areas of Tacoma on the west and the City of Puyallup on the east, but also includes several remaining smaller islands of unincorporated areas such as the PAA s. [See the shaded area in Figure 1, below.] At its widest dimension, the District extends almost fifteen miles, from Browns Point Dash Point to southeast of Puyallup. Figure 1 Pierce County East Patrol Area, District PC01 (Shown Shaded)

70 Expenditures Report 4/12/05 Final Draft - Page 23 Police Police patrol staffing and presence in each PAA are of necessity fairly low. This entire patrol district is staffed with one 24-7 patrol car. (A 24-7 patrol is the equivalent of one police patrol officer, 24 hours a day, 7 days a week. 3 ) Occasionally there may be an additional car roving in PC01, but a second car is never assigned to the area. As the PAA s constitute only about five percent of the district s total dispatches, responses to either of the PAA s must realistically be expected to be by a patrol car that is, barring a rare coincidence, ten to fifteen miles away at time of its dispatch. Accordingly, response times to the PAA s are relatively long, even for Priority 1 calls. The dispatches to the PAA s and the average response times by priority of call are summarized in Table 6, below. 4 Area Browns Point - Dash Point Fife Heights Reporting Blocks 501, 502 (all) 503 (partial) Calls for Service [2003, all priorities] Priority 1 Calls Priority 2 Calls Response Time Response Times supplied by Pierce County Sheriff's Office, Tony Berger, (2/25/05] Table 6 Current Annual Calls for Service and Response Times in the PAA s 3 Staffing a function around the clock requires, after accounting for mustering time, vacation and sick leave, etc, 6.0 FTE s per 24-7 function. 4 Retrieval of by dispatch call data and average response times by Detective Sergeant Tony Berger, Pierce County Sheriff s Office Crime Analysis & Information Unit, 2/25/05. Note on the year: At the time of the original requests for dispatch data from the County and the City, the year 2004 had not yet finished. Accordingly, the complete year 2003 was chosen for the comparable year for comparing dispatches from each source.

71 Expenditures Report 4/12/05 Final Draft - Page 24 Police City of Tacoma. The Tacoma Police Department (TPD) patrol services are organized into 17 Districts, which are subdivided into 166 Reporting Blocks. If the PAA s were to be annexed, they would most likely be added to the TPD s District 1-4, which is shown below with its reporting blocks in Figure 2, below. These blocks 183, 184, and 185 constitute the planning area, Northeast Tacoma. Figure 2 Tacoma Police Department Reporting Blocks in District 1-4 (Shown Shaded) The Northeast Tacoma reporting blocks of District 1-4 are staffed with patrols. These blocks constitute about 45% percent of District 1-4 s total dispatches. The dispatches to the Northeast Tacoma and the average response times by priority of call are summarized in the table below. 5 5 Dispatch volumes and response times by call priority calculated by this study. Dispatch data download thanks to Jacqueline Shelton, Tacoma Police Department, Crime Analysis Unit, 12/6/04

72 Expenditures Report 4/12/05 Final Draft - Page 25 Police Area Reporting Blocks Calls for Service [2003, all priorities] Response Time [time of dispatch to the time of arrival, in minutes] Priority 1 Calls Priority 2 Calls Northeast Tacoma , Total 3,601 Response Time calculated for the period 1/1/2002 to 10/31/04 Table 7 Current Annual Calls for Service and Response Times in the PAA s Because the TPD was able to provide a full download of almost three years of data from its dispatch records (with confidential information removed) this study was able to do some comprehensive analysis of the City s response times of police dispatches. The pattern of the average dispatch times is shown for all 186 reporting blocks in Figure 3, below.

73 Expenditures Report 4/12/05 Final Draft - Page 26 Police Times are shown for the average of Priority 1 calls and for the average of Priority 2 calls. Each of these two curves may be imagined as being the results of a system-wide squad car race. In each race, cars are dispatched at the same instant to locations in every one of the 186 reporting blocks. As each car reaches its destination it calls in. Looking at the solid red line in the graph, one can see that in the Priority 1 race, after about six minutes, about 30%. the cars have called in. After a total time of about ten minutes, about 80% of the cars have called in. 6 The reporting blocks in Northeast Tacoma (Blocks 183, 184, and 185) would be losers in this race, as would most of the other blocks in District 1-4. The times which these three blocks would cross the finish line in this hypothetical race are marked on Figure 3, below. 100% Response Time (Time Call Received to Time Arrived) 90% % of Reporting Districts... 80% 70% 60% 50% 40% 30% 20% #184 arrives #185 arrives #183 arrives 10% 0% With Average Response Under Minutes Priority 1 Calls Priority 2 Calls Figure 3 Response Time by Reporting District 6 Technically, this graph is what is known as a cumulative probability distribution. Whereas a straightforward probability distribution (like the famous, bell-shaped curve ) shows the probability of any one value, a cumulative probability shows the probability of a cumulative range of values here the probability of having an average response time under minutes.

74 Expenditures Report 4/12/05 Final Draft - Page 27 Police Response times to Northeast Tacoma with current police staffing, then, are seen to be relatively long for Tacoma, even for high priority calls. Presumably due to its distance and the obstacle of the tideflats, dispatches to Northeast Tacoma are among the slowest in the Department. The dispatch times of 12.5 to 18.6 minutes for the three Northeast Tacoma reporting blocks Priority 1 calls (Figure 2) are slower than more than 85% of all Tacoma reporting blocks. System wide, the Department reports an average response time of dispatch to arrival of 6.05 minutes for Priority 1 and 2 calls. 7 Overall, District 1-4 has the second slowest average response time among the sixteen city districts for Priority 1 calls and the fifth slowest for Priority 2 calls. Within the District 1-4 the three reporting blocks of Northeast Tacoma are the slower than the blocks on the tideflats. Cost Methodology Patrol services are by far the major cost in police services, as well as the most visible to citizens. Furthermore, many other police services typically are calculated in direct proportion to police patrol levels, such as supervision at a service level of one sergeant per so many patrol officers or police investigation at a level of one detective per so many patrol officers. So how many patrol officers are mandated? One common measures of resource demand is population, and, correspondingly, how many officers are on patrol per thousand population. Another common measure is the number of dispatched calls for service and, correspondingly, the number of calls to which an individual patrol officer is expected to respond in a year. Population has been calculated and displayed in the Fiscal Bases and Area Profiles Report, including a population projection for For the convenience of the reader, this population data is repeated below in Table 8, below. POTENTIAL ANNEXATION AREA POPULATION 4/1/2000 4/1/2003 4/1/2004 4/1/2005 Browns Point - Dash Point 2,096 2,175 2,202 2,229 Fife Heights 1,216 1,292 1,319 1,346 Totals for both PAA's 3,312 3,467 3,521 3,575 Table 8 Projected Increase in Population in the PAA s 7 Jacqueline Shelton, TFP, 2/24/05: calculating the time of dispatch to the time of arrival. Note that this study s calculations illustrated above are for the time of call received to time of arrival.

75 Expenditures Report 4/12/05 Final Draft - Page 28 Police Dispatched calls for service have been analyzed and reported above for the year There has been no steady change in calls for service over recent years, so no adjustment in the historical dispatches appears necessary. Dispatches from an annexing area can be expected to increase, however, due to the change in service provider from County Sheriff to City Police Department. Citizens tend to call a local police force especially one which is more likely to be dispatched for given calls and to arrive more promptly. How much of an increase might be expected? This study turned to the City of University Place, which since its incorporation in 1994 has been served under contract by the County Sheriff acting much as a local police force, with greater visibility and higher staffing. In the immediate aftermath of incorporation, University Place experienced an approximately 15% increase in police dispatches. In subsequent years it dropped back to just about 10% above historical levels. 8 This study therefore inflates the historical tally of dispatches to the reporting blocks 501, 502, and 503 by 10%, as shown in Table 9, below. POTENTIAL ANNEXATION AREA Browns Point - Dash Point Fife Heights Totals for both PAA's REPORTING BLOCK 501, 502 (all) 503 (partial) DISPATCHED CALLS FOR SERVICE (2003) PAA's Unincorp'd Projected Increase in DCS PAA's After Annexation % Table 9 Projected Increase in Dispatched Calls for Service in the PAA s 8 Bob Jean, City Manager, City of University Place, 3/8/05.

76 Expenditures Report 4/12/05 Final Draft - Page 29 Police Cost Drivers These two potential cost drivers of population and dispatched calls for service are used to compare the level of effort to serve the two PAA s with the level of effort to serve Northeast Tacoma. The PAA s appear to pose roughly between twenty and twenty-five percent of the police resource demand as does Northeast Tacoma, which is currently served by TPD with 2.3 police patrols. At 6 officers per 24-7 patrol, 2.3 patrols translates to 14 police patrol officers, or an average of 0.87 officers per thousand population. POLICE PATROL OFFICERS (Primary Call Responders) Measures of Demand Dispatched Calls for Service [2003] % of NE Tacoma Population (4/2003) % of NE Tacoma Number of 24-7 Patrols % of NE Tacoma Service Level Police Patrol Officers Number Annual Officers / Dispatches / 1000 Pop. Officer All of Tacoma 126, % 196, % % Northeast Tacoma 3, % 15, % % Browns Point - Dash Point and Fife Heights % 3, % % Table 10 Summary of Common Cost Drivers for Police Service Should the resources presumed 9 to be added to police services be comparable with the current level of service of Northeast Tacoma, or should they be more or less? Upon consideration of the current staffing of District 1-4, service needs, officer safety, and the need not to diminish existing District 1-4 response, the Tacoma Police Department recommended that annexation of the two PAA s would be best served by adding one extra patrol to Northeast Tacoma s current 2.3 patrols 10. This extra 24-7 patrol translates to 6 additional police patrol officers. Although this level of staffing is larger than the current staffing for Northeast Tacoma (about twice as high, depending on whether the comparison is made on the basis of dispatched calls for service or on the basis of population), Northeast Tacoma is demonstrably underserved today, judging by response times. 9 The word presumed is quite important here. This study is primarily a financial study how the revenues which would likely be generated after annexation would compare with the costs of the levels of service which are likely to be delivered by the City after annexation. Nothing in this study automatically sets any policy on what level of service future City administrations and City Councils will choose to deliver over time. 10 Paul Mielbrecht, Assistant Chief and Gina Chamberlain, Tacoma Police Department, March, 2005.

77 Expenditures Report 4/12/05 Final Draft - Page 30 Police Cost Calculation Annual Costs Once the number of patrol officers is determined, cost calculation is straightforward. o A fraction of each sergeant working the same shifts is necessary for administration and supervision: TPD estimates this to be 20% of each of three sergeants, or 60% of one sergeant position. o TPD deems one detective necessary for investigation to support the cases generated by the police work of the patrol officers. o Each of the patrol officers incurs a one-time cost for uniforms, weapons, protective gear, etc. o The patrol unit will require purchase and outfitting of an additional patrol car. o Each car costs $750 per month for fuel and lease from Fleet Services (maintenance and replacement reserve.) 11 No costs were submitted for administration beyond the sergeant supervision, for jail services, nor for communication. The calculation of these annual budget items for police services is shown below in Table 11, below 12. Unit Costs Browns Point - Dash Point Fife Heights Service Area Line Item Cost FTE Per Unit BPDP Number of Units BPDP Cost BPDP FTEs FH Number of Units FH Cost FH FTEs Operations Patrol Officer $ 111, Patrol Officer 4.0 $ 447, $ 223, Operations Sergeant $ 137, Sergeant 0.4 $ 54, $ 27, Investigations Detective $ 124, Detective 0.7 $ 87, $ 37, Totals (Rounded to $1,000's and 0.1 FTE) $ 590, $ 289, Table 11 Police Total Annual Costs and FTE s 11 Source for annual car costs: Paul Mielbrecht, Assistant Chief of Police, TPD, 3/29/ The Department s projections are for the addition of both PAA s combined. This study disaggregates these totals to the two PAA s per capita. Such a split is quite reasonable, as population itself is sometimes the sole driver of costs but should the City decide to act on only one of the potential annexations, TPD should be allowed to examine this allocation.

78 Expenditures Report 4/12/05 Final Draft - Page 31 Police One-Time Costs For every officer added to the department, there are several one-time costs associated with starting the position. These include initial purchases of uniforms, badges, guns, vests, and patrol cars. There may also be the cost of salaries during the period new police officers are in training, before they can be put on the street. ONE-TIME COSTS Unit Cost Number Total Cost New Recruit Outfitting Uniform Costs $ 1,551 Safety Equipment $ 375 Miscellaneous $ 530 Firearm $ 725 Radio $ 4,000 Other $ 1,350 Patrol Car Total Outfitting $ 8,531 7 $ 59,717 Ford Crown Victoria $ 23,000 Lights, Siren, Laptop $ 8,000 Total Car $ 31,000 6 $ 186,000 Total (Rounded to $1,000's) $ 246,000 Allocation to Browns Point - Dash Point $ 153,000 Allocation to Fife Heights $ 93,000 Table 12 Police Total One-Time Costs Note: Seven officers are outfitted: the six patrol officers and one additional patrol officer who replaces the detective but then himself or herself must be replaced. For each of the new officers, a outfitted police car is also required. 13 This study allocates the Department s one-time cost per capita to the two PAA s. As noted for the annual costs, should only one PAA be annexed, this allocation would have to be revisited. 13 Source for costs: Paul Mielbrecht, Assistant Chief of Police, TPD, 3/29/05.

79 Expenditures Report 4/12/05 Final Draft - Page 32 Fire Fire The Tacoma Fire Department (TFD) provides fire protection and emergency medical services (both basic and advanced life support services) within the City limits through equipment and personnel housed at seventeen fire stations across the City. The PAA s are served by Fire District 13, the boundaries of which match Browns Point Dash Point exactly, and by Fire District 10, which includes all of Fife Heights and area beyond. In land area, the Fife Heights PAA constitutes approximately 45% of Fire District 10. Figure 4 Fire and EMS Service Providers The City has a relationship with each of these Districts. Fire District 10 receives fire protection and EMS from the City under contract. In turn, the City receives nearly all of the District s annual levy as a contract payment. 14 Fire District 13 has in recent years considered negotiating a joint operating agreement with the City to allow more cooperation and revenue sharing. Although this agreement has 14 The Fire District is allowed to deduct from otherwise eligible service contract revenues the cost of pension expenses for previous District retirees, its one full-time employee and administrative expenses of the District Commissioners. Source: Mike Fitzgerald, TFD, 2/28/05.

80 Expenditures Report 4/12/05 Final Draft - Page 33 Fire never progressed beyond preliminary discussions, its review still provides useful background on what each party might bring to the table, both in capacities and expectations, if the two service providers were to join forces. 15 Annexation of District 13, however, would be very different than the proposed joint operating agreement. Annexation of area within a fire district automatically removes that area from the district and the City becomes responsible for fire protection services of the annexed area. If the area of a district is totally annexed, the district ceases to exist after January 1 of the year that the annexing city will first collect its property tax levy. 16 Dispatches for fire / emergency medical services (EMS) in the Browns Point Dash Point area total only about 100 per year. The demand is primarily for EMS. The District provides its own basic life support (BLS) service but has a need for advanced life support (ALS) service. When requested, TFD provides mutual aid responses to Browns Point Dash Point for fire but not for either BLS or ALS. (The aid is mutual only in name, as the District does not dispatch back to Tacoma.) The Northeast Tacoma area has far more dispatches than does Browns Point, with 147 for fire, 588 for EMS, and 29 for hazardous responses, plus 671 staging standby and investigative calls. Responses are primarily by TFD Fire Station No. 3, with first backup from Fire Stations No. 12 and 15. The same topography and obstacles which impede fast police responses, even for the highest priority calls, also impede the responses for fire and EMS service. Response times within Northeast Tacoma are among the slowest in the TFD service area. Calls for service and response times are shown in tabular form in Table 13, below. CALLS FOR SERVICE (2004) RESPONSE TIME (Estimated) AREA JURISDICTION To Browns Point - Dash Point To Northeast Tacoma Browns Point - Dash Point Northeast Tacoma / Station 3 Fire District 13 (with aid from TFD on fire calls) Tacoma Fire Department (TFD) Fire EMS Fire EMS Fire EMS [data not supplied] [data not supplied] [District 13 does not dispatch to NE Tacoma.] Table 13 Area 2004 Fire and EMS Incident Volumes and Approximate Response Times 15 Letter from Jon Lendosky, Assistant Chief, Emergency Medical Services to Fire District 13 Commissioners, January, 2004 and Briefing For the Public Safety Committee: Joint Operating Agreement Between TFD and Fire District 13, January, For an excellent description of all these contingencies and transitions, see the Municipal Research & Services Center of Washington: Annexation Handbook -Report No. 19 Revised November 2004, Pages

81 Expenditures Report 4/12/05 Final Draft - Page 34 Fire All 2004 dispatches from TFD stations are mapped in Figure 5, below. Not shown are the responses from Browns Point, which if plotted would virtually all be points within Browns Point Dash Point. Figure 5 Area 2004 Fire and EMS Dispatches

82 Expenditures Report 4/12/05 Final Draft - Page 35 Fire Cost Methodology Fife Heights As this area is already fully served by TFD under contract to Fire District 10, there would be no service cost change to Tacoma upon annexation of Fife Heights. Although the District boundaries would change and the contract would be modified to exclude this area, there would be no change in service demand, staffing, station location, etc. However, creation of another fire station in northern Northeast Tacoma might allow the eventual relocation of Station 3 further south, improving response times to southern Northeast Tacoma and Fife Heights. The District 10 contract funds that the City would no longer receive are treated in this report as a cost of annexation. These lost funds have a counter balancing increase in revenues which will be experienced in the municipal levy, utility taxes, etc. Because the current fire revenues will no longer be restricted to this purpose, there is no answer to whether fire/ems costs will be more or less covered by revenues as a result of annexation. The only bottom line comparison of revenues and costs is on the very bottom line for the entire annexation. Browns Point Dash Point Annexation of Browns Point Dash Point would eliminate Fire District 13. Technically, any joint operating agreement would have no further force, even if it had been signed. However, the discussions can still be used as an indication of how the parties involved in the agreement negotiations today see the service needs, problems, and opportunities for fire and EMS services in the area. When the TFD briefed the City Council Public Safety Committee last year on the negotiations these were the terms presented: 1. The City would operate the Browns Point Fire Station with career staff shifts of one officer, one firefighter/driver and one firefighter/paramedic (plus two relief personnel.) TFD would reallocate some resources from other stations and the City would provide additional fire/ems funding. 2. Fire District 13 would put its entire operating levy towards operation of the Browns Point Station The proposed new engine company would cost approximately $1.3 million per year, which could be raised by splitting the costs three ways, one-third by reallocations of existing TFD resources, one third by an increased fire/ems expenditure by the City, and one-third by the operating levy of Fire District 13. This option has the advantage of making good use of the District 13 s main existing facility, a two bay fire station with living accommodations and offices, but is not centrally located to serve the northern end of Northeast Tacoma. The combination of Browns Point and Station 3 would leave a substantial gap between the two stations four minute response contours, as Browns Point serves the small area to its north up to Puget Sound at the expense of larger area to its south. See Figure 6, below.

83 Expenditures Report 4/12/05 Final Draft - Page 36 Fire Figure 6 TFD Station 3 and Browns Point Response Areas An alternative option which has also been under consideration would be to serve both Browns Point Dash Point and Northeast Tacoma by a station to be located slightly outside Browns Point in northern Northeast Tacoma, in the vicinity of 51st Street NE and Browns Point Blvd NE. By being located more centrally to the demand in Dash Point and Northeast Tacoma, this station, in conjunction with the existing Station 3, would improve the current response times. See Figure 7, below.

84 Expenditures Report 4/12/05 Final Draft - Page 37 Fire Figure 7 TFD Station 3 and Alternative Browns Point Response Areas

85 Expenditures Report 4/12/05 Final Draft - Page 38 Fire Both of these options are explored in the Cost Calculation section below. However, in the Fire Department s judgment, There is no question that a centrally located regional station in northern Northeast Tacoma is the best long term solution to providing fire and EMS response to the entire area, The Department states that Northeast Tacoma is poorly served from Station 3 currently and that and that it just isn't physically possible to provide an adequate response time to emergencies in all of NE Tacoma from any single site on the bluff. 17 Furthermore, a fully staffed 24 hour per day station could include a paramedic firefighter, which would bring a faster ALS response to the PAA. Cost Drivers Fire costs are not computed per unit, such as per dispatched call. Cost Calculation Annual Costs Fife Heights The cost to serve Fife Heights is simply the lost revenue of the eliminated contract. Even though TFD will continue to serve the portion of Fire District 10 not annexed by the City, the District will lose the annexed area from its revenue base. This lost revenue is calculated as the district levy of $1.433 per $1,000 times the taxable assessed value of Fife Heights of approximately $86,000,000 and is shown below as an effective cost. Lost revenue to FD10 due to annexation of Fife Heights $ 123,000 Table 14 Fire Operating Costs: Fife Heights 17 Mike Fitzgerald, TFD, 3/18/05. The City needs to eventually build and staff a second station in NE Tacoma to adequately serve northern Northeast Tacoma. The best overall long term solution would be a single new station, centrally placed to serve northern Northeast Tacoma, Browns Point and Dash Point rather than have Tacoma site another station and add a separate engine crew a distance from the continued volunteer Browns Point and Dash Point stations. The new station would be professionally staffed 24 hours/day every day and could include a paramedic firefighter on the engine crew (identical to Engine 3) to minimize the time required to begin ALS care in acute EMS incidents. Adding the engine would also significantly improve the time required to assemble the units and staffing to fight a fire anywhere in Browns Point, Dash Point, or Northeast Tacoma, because one fewer outlying engine would be necessary to travel such a great distance to commence operations. [Minor editing.]

86 Expenditures Report 4/12/05 Final Draft - Page 39 Fire Browns Point Dash Point The City Council briefing by TFD (footnote 14, page 33) on the proposed joint operating agreement envisioned three roughly equal sources of income for funding the operation cost of a fully staffed career station at Browns Point: o The Fire District 13 levy, o Reallocations of existing resources from within TFD, and o Presumed additional Council funding for the improved service level. The assumptions used in these briefing papers can be used to construct three options for funding fire operations today: 1. The first option reflects the aims of the joint operating agreement negotiations. It is drawn with a dashed border to indicate that under annexation it would no longer be an option, but is just presented to show the derivation of certain costs. 2. The second option is operation of Browns Point as a career station without a District The final option is similar to the second, except that the existing Browns Point station is sold and a new, more central Browns Point Station is constructed. To develop these options, it must be first noted that the funding sources postulated do not appear to quite add up currently to the costs discussed in the joint operating agreement papers if the costs shares are indeed at or close to thirds. Fire District 13 has two levies one for operating and a second for debt service on bonds used to purchase equipment. The operating levy is approximately $0.81 per $1,0000 assessed valuation, which calculates to approximately $230,000 at the area s current assessed valuation of $288,000,000. A significant portion of this levy, however, is committed to servicing some District debt incurred for equipment purchases. If it can be assumed that the Reallocations of existing resources from within TFD were about a third of $1.3 million (approximately $450,000), then the necessary additional funding can be inferred to be $572,000 currently. And if the Fire District operating levy disappears as it would under annexation then the need for additional funding by the City would increase to approximately $802,000. If career staffing of either the Browns Point Station or a New Station is at equal levels, the operating costs will be close to the same for either option, as illustrated in Table 15, below.

87 Expenditures Report 4/12/05 Final Draft - Page 40 Fire Source Joint Operating Agreement Negotiations (No Annexation) Annual Cost Annexation: Using Browns Pt. Station Annexation: Constructing New Station Fire District 13 Operating Levy * $ 230,000 $ - $ - less bond payments from operating funds $ (78,000) $ (78,000) $ (78,000) Net operating levy $ 152,000 $ (78,000) $ (78,000) EMS Levy ** $ 126,000 $ 126,000 $ 126,000 Total Available Operating Funds $ 278,000 $ 48,000 $ 48, Funds from Browns Point - Dash Point $ 278,000 $ 48,000 $ 48, Reallocations of TFD Existing Resources $ 450,000 $ 450,000 $ 450, Additional Fire/EMS Funding by City $ 572,000 $ 802,000 $ 802,000 TOTAL STATION OPERATIONAL COSTS $ 1,300,000 $ 1,300,000 $ 1,300,000 A new expense of annexation, to be covered by the combined additional revenues from annexation. Notes: * The Fire operating levy would be removed upon annexation. ** The EMS levy would be removed upon annexation but would likely be restored within perhaps one year. It is treated here as a steady state revenue in all years, minus a one-time cost in year one. Table 15 Fire Operating Costs: Browns Point Dash Point The total operating costs for fire and EMS services in each of the PAA s are summarized intable 16, below. Note that these are costs relative to current costs Unit Costs Browns Point - Dash Point Fife Heights Service Area Line Item Cost FTE Per Unit BPDP Number of Units BPDP Cost BPDP FTEs FH Number of Units FH Cost FH FTEs Fire Station District Levy Table 16 Operating Expense for Additional Station N/A $ 802, N/A $ Lost Revenue On Not Calculated Per Unit N/A $ - N/A $ 123, FD10 Contract (See discussion under Department.) Totals (Rounded to $1,000's and 0.1 FTE) Not Calculated Per Unit (See discussion under Department.) Fire Operating Costs Additional Net Costs For City Budget $ 802, $ 123,

88 Expenditures Report 4/12/05 Final Draft - Page 41 Fire One-Time Costs Fife Heights There are no one-time costs for fire services in this PAA. Browns Point Dash Point If upon annexation, the City uses the Browns Point Station, there would presumably be some remodeling needs and corresponding costs. If the City follows the New Station option, there would be costs for land and construction, offset by the net value of the sale of the Browns Point and Dash Point Stations. 18 Fire District 13 has two engines plus one reserve engine. Sale of the reserve engine would yield approximately $20,000. Addition of the active engines to TFD s stock is projected to avoid the need for one scheduled pumper purchase, for a one-time savings of $450, In addition, of the full complement of fifteen firefighters to staff the station, ten are new hires. For every officer added to the department, there are several one-time costs associated with starting the position. These include such initial purchases as uniforms and fire suits approximately $6,000 per hire, or $60,000 for ten new hires. 18 Station 8, an old station in a residential neighborhood, was recently sold for $281,000. Pending a market projection by the City, this study uses a conservative stand-in figure of $400,000 for sale of the two stations in the PAA, with $250,000 for Browns Point and $150,000 for Dash Point. 19 :The projected savings are to the City's Equipment Rental Fund and are treated as a negative one-time cost here. The corresponding required contributions to the Equipment Replacement Fund of about $75,000 per year for this vehicle would remain unchanged and therefore constitute no new cost. (Mike Fitzgerald, TFD, 3/18/05.)

89 Expenditures Report 4/12/05 Final Draft - Page 42 Fire Scenarios Annexation: Using Browns Pt. Station One-Time Cost Annexation: Constructing New 2-Bay Station Station Location Browns Point Near 51st Street NE and Browns Point Blvd NE New Station - Land $ 456,000 New Station - Site Work and Construction $ 3,292,000 New Station - Fixtures, furnishing, equipment and communications $ 648,000 Browns Pt. Station - Remodeling $ 701,000 Total Capital Costs $ 701,000 $ 4,396,000 Less Sale of Dash Pt. Station OR of Browns Pt. and Dash Pt. Stations $ (150,000) $ (400,000) Less Sale of Reserve Engine $ (20,000) $ (20,000) Less Savings Due to FD13 Engines Obviating Need for Pumper Purchase $ (450,000) $ (450,000) Total Capital Costs (Net) $ 81,000 $ 3,526,000 Delay of One Year In Reestablishment of the EMS Levy $ 126,000 $ 126,000 Cost To Outfit New Hires $ 60,000 $ 60,000 TOTAL ONE-TIME COSTS $ 267,000 $ 3,712,000 Table 17 Fire: One-Time Costs

90 Expenditures Report 4/12/05 Final Draft - Page 43 Public Works - Overview Public Works - Overview The Tacoma Public Works Department is responsible for operating the City s solid waste and wastewater management systems, street maintenance, and permitting. It is comprised of the following offices and divisions, each of which has different cost methodologies and cost drivers. Director s Office Administration Environmental Services o Solid Waste Management Division o Maintenance Division o Wastewater Management Operations Division o Science and Engineering Division City Engineer o Construction Division o Engineering Division o Streets and Grounds Division o Building and Land Use Services Division

91 Expenditures Report 4/12/05 Final Draft - Page 44 Public Works - Director s Office Public Works - Director s Office The Public Works Director s Office is comprised of the Director of Public Works and the Assistant Directors and Division Managers. It is responsible for management and oversight of all of the functions with which the Department is charged. Cost Methodology The Director s Office is a fixed cost that would not vary based on changes in City population or geography. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

92 Expenditures Report 4/12/05 Final Draft - Page 45 Public Works - Administration Public Works - Administration The Public Works Administration unit provides centralized support services, such as systems programming and safety officer, for the other units in the Public Works Department. Cost Methodology The services provided by this unit are similar to the Director s Office in that they are a fixed cost that would not vary when the Public Works Department changes in scope and size. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

93 Expenditures Report 4/12/05 Final Draft - Page 46 Public Works - Solid Waste Management Division Public Works - Solid Waste Management Division This Division provides for collection and disposal of municipal solid waste generated within the City and is responsible for operating and maintaining the waste-to-energy facility, refuse derived fuel (RDF) plant, recycling center, landfill gas control system, groundwater pump and treatment system and the Tacoma Landfill. This Division manages customer service billing, recycling, yard waste and household hazardous waste control programs as well as administering regulatory compliance for the Tacoma Landfill. The Division s budget includes debt service on recent bonds. It is established as an enterprise fund, which requires that revenue collected by the fund must be spent within the fund, and generally assumes that revenues will cover the full cost of the services provided. Cost Methodology State statute provides for solid waste collection companies that are franchised by the Washington State Transportation and Utilities Commission (WUTC) to continue their franchises for seven years upon annexation of the unincorporated area to a city. Both of the PAA s are currently served by Murrey Disposal Company through a WUTC franchise. Murrey Disposal collects solid waste and disposes it at a non-city landfill. RCW provides that the WUTC franchise is immediately cancelled and that the City would issue Murrey s Disposal a franchise for a minimum of seven years. At the end of that seven year period, the City may opt to assume solid waste collection in those annexed areas, upon payment of damages to Murrey s Disposal, including a reasonable amount for the loss of the franchise or permit. In similar cases, the City opted to extend the franchise for a mutually agreed period to avoid the payment of damages. Therefore, in the first seven years after annexation, there would be virtually no impact on the City s cost for solid waste management except to the extent PAA residents use the opportunity that all City residents have for free disposal at the City s Landfill for self-hauled waste. Assuming the City and Murrey s can agree on a franchise extension, there would be no costs whatsoever for the transition of this area to City solid waste services. The residents in the PAA would see no decrease in level of solid waste services. In the event that the City opts to provide additional services that are typically offered by the City, but not by Murrey s, the City could implement a rate increase in the franchise which would provide Murrey s Disposal with their historic revenues and provide cost of service revenue for the City. The residents would see an increase in rates, but would also receive services such as Call-2-Haul and City resident tipping fees at the landfill Cost Drivers No change in cost to City. Cost Calculation There are no incremental costs in this department due to either potential annexation.

94 Expenditures Report 4/12/05 Final Draft - Page 47 Public Works - Environmental Services Maintenance Division Public Works - Environmental Services Maintenance Division The Public Works Environmental Services Maintenance Division is responsible for maintenance and repair of the City s Wastewater Treatment Plants, pumping stations, process control systems and transmission system. The Division also responds to customer needs by implementing proactive maintenance programs to improve system performance and reliability and to extent the life of the system infrastructure. The Division is funded through the enterprise funds established for wastewater and stormwater. Cost Methodology This division would be impacted by the cost of both the sewer system and the stormwater system in the PAA s. To estimate the cost of maintaining and possibly improving the County s systems in the PAA s to bring them up to City standards, the City analyzed the County s inventory records of both systems. The figures that follow were supplied in a memorandum from Environmental Services Science & Engineering. 20 Cost Drivers The cost drivers used by the City to calculate the annual operating costs for wastewater and stormwater include linear feet of pipe, number of pump stations, number of stormwater catch basins, and number of culverts. Cost Calculation Annual Costs Service Provider Browns Point - Dash Point Fife Heights Cost FTE's Cost FTE's Public Works - Stormwater $ 191, $ 150, Public Works - Wastewater $ 271, $ 9, Table 18 Stormwater and Wastewater Annual Costs 20 Christopher Johnson, P.E., Environmental Services Science & Engineering, to Peter Huffman, March 31, 2005 (attached as Appendix 1.)

95 Expenditures Report 4/12/05 Final Draft - Page 48 Public Works - Environmental Services Maintenance Division One-Time Costs In addition to the annual operating costs that would be incurred upon annexation, there would be an additional stormwater utility cost to implement capital projects recommended in the Hylebos Basin Plan currently under development by Pierce County. Preliminary cost estimates of these projects are as shown below 21. One-Time Expenditures Browns Point - Dash Point Fife Heights Total Hylebos Basin Plan recommended Capital Projects $ 330,000 $ 270,000 $ 600,000 Table 19 Stormwater One-Time Costs 21 See Appendix 1..

96 Expenditures Report 4/12/05 Final Draft - Page 49 Public Works - Wastewater Management Operations Division Public Works - Wastewater Management Operations Division The Wastewater Management Division is responsible for operating two secondary wastewater plants, a biosolids processing and distribution program, an industrial pretreatment program and a customer service program. The division handles both industrial and domestic wastewater and recycles the secondary products of methane and biosolids. As with the Solid Waste Management Division, this budget includes debt service on recent bonds. Cost Methodology Wastewater from both PAA s is already transmitted to and processed in the City s wastewater treatment plant, so there is no additional cost for wastewater operations upon annexation. Cost Drivers No added cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

97 Expenditures Report 4/12/05 Final Draft - Page 50 Public Works - Science and Engineering Division Public Works - Science and Engineering Division The Science and Engineering Division provides engineering, planning, program management and laboratory services to the City s Sanitary, Storm and Solid Waste Divisions collection, piping, wastewater treatment, pumping stations, regional drainage, landfill, RDF, facilities, and for oversight and coordination of private development as it relates to these functions. The Division also manage grant programs and various cleanup programs (including Superfund). Cost Methodology The Science and Engineering Division provides services that are fixed costs that would not be affected by annexation of the PAA s. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

98 Expenditures Report 4/12/05 Final Draft - Page 51 Public Works - Construction Division Public Works - Construction Division The Construction Division provides construction management and inspection services for City funded construction projects; design review and inspection services for private developments; survey and construction staking for City projects; computer and server support services for the Department; support and maintenance of the City s GIS base maps; development and maintenance of govme, the Department s web site; technical support for the City s permitting system; records management; customer service via the Information Center; and system administration of the City s LID and Sidewalk program. Cost Methodology The costs of this Division are generally fixed and would not be affected by annexation of the PAA s. The exceptions to this would be costs borne by special rates established and paid for at the time projects are implemented, such as LID administration. Thus, there is no impact on this Division from the proposed annexation. Cost Drivers Fixed cost. Cost Calculation There are no incremental costs in this department due to either potential annexation.

99 Expenditures Report 4/12/05 Final Draft - Page 52 Public Works Engineering Division Public Works Engineering Division The Engineering Division provides engineering and program management services for the City s transportation and major capital facilities projects. It is responsible for street design, landscape and urban forestry, traffic signals, street lighting, signs and pavement marking, neighborhood programs, road use compliance and parking enforcement. Cost Methodology The Engineering Division s budget is generally a fixed cost budget. Street design work is nominally a variable cost, being supported at a rate of 40% by the City. Support is limited to the extent that the amount budgeted is available, however, after the annual budgeted amount is depleted, the street design project or LID must pay 100% of engineering costs. Because this funding is fixed annually, the street design part of the Engineering Division budget is treated in this report as a fixed cost that would not likely change as a result of annexation. Division management, street design, parking enforcement, road use compliance/abandoned auto enforcement are all considered fixed costs that would not vary with annexation. The costs for the following activities are considered variable and would increase with annexation. Traffic signal maintenance and power Street lighting Arterial striping and marking. Unit costs for each driver are calculated below. Cost Drivers The cost of maintaining traffic signals would vary with annexation in proportion to the number of signals added upon annexation. The City of Tacoma has 278 traffic signals currently, with an annual budget of $700,000 for maintenance and $200,000 for electricity. Expressed per signal, these costs average approximately $2,250 for maintenance and $650 for electricity. 22 There are, however, no traffic signals in either PAA. 23 The cost of street lighting would also vary with annexation in proportion to the miles of lit roads added upon annexation. For arterials, the City reports costs $2,437 per mile for maintenance of street lights and $2,315 per mile for the electrical power to light them. For residential streets, the City reports costs $1, Source for this Division (except where otherwise noted): Dana Brown, Tacoma Public Works Engineering Division, March, Note: On thirty-two WSDOT traffic signals in Tacoma, the State pays the electric bill and pays the City for maintenance. 23 Rory Grindley, Pierce County Traffic Engineer, 3/18/05. There are some flashers, however, on State Route 509, which, under RCW (13), the City would be responsible for on the additional two miles of State Route 509 contained in Browns Point Dash Point. A nominal cost of $2,000 per year is postulated here, pending more detailed data.

100 Expenditures Report 4/12/05 Final Draft - Page 53 Public Works Engineering Division per mile for maintenance of street lights and $670 per mile for the electrical power to light them. 24 The roads inventory shown in Table 21 on page 54 shows 3.55 collector and 4.91 residential road miles in Browns Point Dash Point and 3.35 collector and 3.13 residential road miles in Fife Heights. The resultant costs are computed in Table 20, Department: Public Works Engineering Total Annual Costs and FTE s, immediately below. Re-striping and marking would vary with the number of arterial road miles added upon annexation. The Division performs this maintenance every three years at a reported cost of $2,640 per arterial lane mile, with no striping being performed on residential streets. 25 Referring again to the roads inventory shown in Table 21 on page 54, there are 7.08 collector lane miles in Browns Point Dash Point and 6.70 collector lane miles in Fife Heights. The resultant costs are computed in Table 20, Department: Public Works Engineering Total Annual Costs and FTE s, immediately below. Cost Calculation Unit Costs Browns Point - Dash Point Fife Heights Service Area Line Item Cost FTE Per Unit BPDP Number of Units BPDP Cost BPDP FTEs FH Number of Units FH Cost FH FTEs Traffic Signals Maintnenace $ 2,250 - traffic signal 0 $ $ Traffic Signals Electricity $ traffic signal 0 $ $ Street Lighting Maintnenace $ 2,437 - Street Lighting Electricity $ 2,315 - Road miles (Arter.) Road miles (Arter.) 3.55 $ 8, $ 8, $ 8, $ 7, Street Lighting Maintnenace $ 1,048 - Road miles (Resid.) 4.91 $ 5, $ 3, Street Lighting Electricity $ Road miles (Resid.) 4.91 $ 3, $ 2, Street Striping and Marking State Route 509 Table 20 $ 2,640 - Lane miles 7.08 $ 18, $ 17, Flasher Not Calculated Per Unit N/A $ 2,000 N/A Maintenance (See discussion under Department.) Totals (Rounded to $1,000's and 0.1 FTE) $ 46, $ 39, Department: Public Works Engineering Total Annual Costs and FTE s 24 The City currently pays an annual flat fee of $650,000 for power to support all its street lights, however, as the City computed the average annual cost per mile, this study applied it, with the expectation that over time the flat fee would likely be readjusted to match usage. 25 Dana Brown, Tacoma Public Works Engineering Division, 3/10/05.

101 Expenditures Report 4/12/05 Final Draft - Page 54 Public Works Streets and Grounds Division Public Works Streets and Grounds Division The Streets and Grounds Division provides maintenance, including street repair, pothole repair, power brooming, and landscape maintenance. It also assists the community during emergencies and provides services to other city departments as needed. The annexations of the Browns Point - Dash Point and Fife Heights PAA s would increase the road inventory for which the City of Tacoma is responsible by 8.46 and 6.48 miles, respectively, for a total of centerline miles. 26 For comparison, the number of road miles in the Northeast Tacoma area is miles. Browns Point - Dash Point Fife Heights UNITS Road Class Road Class Total 3 - Collector 4 - Residential 3 - Collector 4 - Residential Total Grand Total Sum of LENGTH Sum of Lane Miles Sum of Square Yards 47,667 49,591 97,258 44,645 39,095 83, ,998 Table 21 Potential Annexation Area (PAA) Road Units 26 The sum shown is the number of miles of roads for which the County s system shows County maintenance in the PAA s. In addition, there are roads which are maintained by the State or by private parties. Approximately 2.08 miles of State Route 509 maintained by the State lie in the Browns Point Dash Point PAA. In addition, each PAA has some privately maintained roads. Overall the county roads layer measures a total of 19.3 centerline miles of roads in the PAA s.

102 Expenditures Report 4/12/05 Final Draft - Page 55 Public Works Streets and Grounds Division The roads in the PAA s and in Northeast Tacoma are different types of construction. The majority of the roads in the PAA s are bituminous surface treatment - BST, also known as oil mat. In contrast, the majority of the roads in Northeast Tacoma roads asphalt concrete pavement ACP, a more substantial and durable road. Mile for mile, the City s predominantly ACP roads represent much more of an investment than the PAA s BST roads. The percentages of each road type in the PAA and Northeast Tacoma are shown in Table 22 and Table 23, below. County Road Class ROAD TYPE [Percent of totals] Browns Point - Dash Point Fife Heights Collector Residential Collector Residential Total Total Grand Total ACP Asphalt Concrete Pavement 7% 11% 18% 2% 5% 7% 25% BST Bituminous Surface Treatment 15% 22% 37% 21% 16% 36% 73% OVR 2% 0% 2% 0% 0% 0% 2% Grand Total 24% 33% 57% 22% 21% 43% 100% Table 22 Road Types in the PAA s City Road Class Road Type Major Arterial Minor Arterial Collector Arterial Unclass'd Arterial Resid'l Alley Private Paper Grand Total ACP BST Asphalt Concrete Pavement Bituminous Surface Treatment % 80% 70% 21% 75% 0% 100% 97% 74% 1% 2% 4% 3% 14% 0% 0% 0% 23% DRT Dirt 0% 0% 0% 0% 0% 0% 0% 0% 0% GRV Gravel 0% 0% 0% 0% 1% 2% 0% 0% 3% Grand Total 4% 10% 12% 4% 59% 2% 6% 3% 100% Table 23 Road Types in Northeast Tacoma

103 Expenditures Report 4/12/05 Final Draft - Page 56 Public Works Streets and Grounds Division In what condition are these roads currently? Under statewide requirements, the County rates the condition of each of its road segments every two years for a variety of types of deficiencies, leading to an overall pavement score. Tacoma has a similar program. Although both Tacoma and Pierce County use the same state mandated evaluation system, there can be some degree of variation between raters. To allow this annexation study to compare with confidence the road segment conditions in the PAA s with those in Northeast Tacoma, the managers of the County and the City pavement management systems conferred on their current rating practices. Together they reviewed road conditions, compared rating methodologies, and normalized the point deductions assigned to each indicator of road distress in Northeast Tacoma to the point deductions which were applied by the County in the PAA s. How did the area road conditions compare? The current condition of the segments in each of the PAA s is summarized in a pair of tables (Table 24 and Table 25, below) by absolute lane miles and percentage of total lengths, respectively. The current condition of the segments in each of the Northeast Tacoma area is summarized in a similar pair of tables (Table 24 and Table 25, further below.)

104 Expenditures Report 4/12/05 Final Draft - Page 57 Public Works Streets and Grounds Division PAVEMENT CONDITION RATING [Lengths in miles] Browns Point - Dash Point Fife Heights County Road Class County Road Class Total OCI Range Assessment 3 - Collector 4 - Residential 3 - Collector 4 - Residential Total Grand Total Excellent Very Good Good Fair Poor Very Poor Failed Table 24 PAA Roads: Pavement Condition Ratings (Miles) PAVEMENT CONDITION RATING [Percentage of Lengths] Browns Point - Dash Point Fife Heights County Road Class County Road Class Total OCI Range Assessment 3 - Collector 4 - Residential 3 - Collector 4 - Residential Total Grand Total Excellent % 49% 62% 100% 70% 86% 72% Very Good % 12% 11% 0% 14% 7% 9% Good % 25% 19% 0% 7% 3% 12% Fair % 6% 4% 0% 9% 4% 4% Poor % 4% 2% 0% 0% 0% 1% Very Poor % 1% 0% 0% 0% 0% 0% Failed 0-9 2% 3% 3% 0% 0% 0% 2% Grand Total 100% 100% 100% 100% 100% 100% 100% Table 25 PAA Roads: Pavement Condition Ratings (Percentage of Total Miles)

105 Expenditures Report 4/12/05 Final Draft - Page 58 Public Works Streets and Grounds Division PAVEMENT CONDITION RATING [Lengths in miles] OCI Range Assessment 1 - Major 2 - Minor 3 - Collector Northeast Tacoma City of Tacoma Road Class 4 - Unclassified 5 - Residen -Other (Non tial Maintained) Excellent Very Good Good Fair Poor Very Poor Failed Subtotal Rated Unrated Total Total Table 26 Northeast Tacoma Roads: Pavement Condition Ratings (Miles) PAVEMENT CONDITION RATING [Percent of Rated Segments] OCI Range Assessment 1 - Major 2 - Minor 3 - Collector Northeast Tacoma City of Tacoma Road Class 4 - Unclassified 5 - Residen -Other (Non tial Maintained) Excellent % 22% 8% 18% 12% 19% Very Good % 37% 39% 47% 58% 45% Good % 30% 20% 26% 20% 21% Fair % 6% 15% 9% 6% 8% Poor % 4% 7% 0% 3% 4% Very Poor % 0% 10% 0% 0% 2% Failed 0-9 1% 0% 1% 0% 1% 0% Total Grand Total 100% 100% 100% 100% 100% 100% Table 27 Northeast Tacoma Roads: Pavement Condition Ratings (Percentage of Total Miles)

106 Expenditures Report 4/12/05 Final Draft - Page 59 Public Works Streets and Grounds Division Overall, the condition of roads within each of the PAA s appears superior to the street conditions in Northeast Tacoma. In Browns Point Dash Point, 73% of the PAA s miles of road segments are rated Excellent or Very Good. In Fife Heights, 93% of the PAA s miles of road segments have these ratings. For comparison, in Northeast Tacoma, only 64% of the area s miles of road segments have these ratings. A quick field visit by Tacoma Public Works revealed no significant or disproportionate unmet street maintenance needs in the PAA s. Indeed, the County is preparing a large percentage of the PAA segments for resurfacing this summer (2005), meaning that roads which would be inherited by the City under annexation will soon generally be in extremely good condition. The road ratings from the four tables above are summarized and displayed in Figure 8, below. Each road segment is color coded by its pavement score, with green signifying roads in excellent condition, red signifying roads in very bad condition, and shades of green to yellow to red signifying roads in between. Qualitatively, one can see that the PAA s have road segments a bit greener and less yellow or red on the whole than those in Northeast Tacoma. Note on Figure 8 below: Three groups of unrated roads appear on this display of road surface conditions: 1. Private roads (shown in brown) 2. State maintained roads (SR 509, shown in brown) and 3. Residential roads in Northeast Tacoma which have no recent rating (shown in light grey.) As residential streets are only marginally maintained (i.e., pot holes filled) this group is only rated when the raters have extra time at the end of rating those roads segments which are in line to be scheduled for maintenance. The pavement management supervisor directs these extra ratings somewhat randomly, such that there appears to be no reason to expect these serendipitously rated roads to be in either better or worse condition than the average in Northeast Tacoma.

107 Expenditures Report 4/12/05 Final Draft - Page 60 Public Works Streets and Grounds Division Figure 8 Average Pavement Condition Scores - PAA s and Northeast Tacoma