Category Archives: Taxes

Port Orchard Library Annexation Could Result in Tax Increase

Although a proposal to annex the Port Orchard Library into the Kitsap Regional Library district would not result in an increase in library taxes paid by property owners within city limits, it would give the city the option of increasing its levy rate, according to Kitsap County Assessor Jim Avery. For a detailed explanation, including comments from Avery, visit the Kitsap Caucus blog.

Chris Henry, South Kitsap/government reporter

BKAT, Parks Funding Among Proposed PO Budget Cuts

On Wednesday, I’ll be heading to a 6 p.m. city council work study meeting at Port Orchard City Hall. The council will discuss $16,000 worth of budget cuts needed in light of its decision to maintain the city’s budget at 2009 levels. The council declined to take a one percent property tax increase in light of the recession.

Among proposed cuts are BKAT broadcasts of city council meetings, a cost of $7,900 per year, and nearly $10,000 in parks funding, including $700 a year for mutt mitts (who knew Port Orchard’s canines were so productive). The city also could renegotiate contracts to save money.

The work study is open to the public, although comments are not generally taken. The public will have a chance to comment on the city’s 2010 budget at a hearing at 7 p.m. Dec. 7. The council will vote on the budget at its regular meeting, Dec. 8.

From the city’s Web site:
“Copies of the Preliminary Budget will be available to any interested taxpayer at a nominal charge during normal working hours, Monday – Friday 8:00 a.m. to 4:30 p.m. at the office of the City Treasurer on November 13, 2009.

Any person or public agency interested is invited to attend the Public Hearing and/or submit written comments on the 2010 budget to the City Council on or before December 7, 2009.”

All meetings are held at City Hall, 216 Prospect St.

Port Orchard Council to Vote Tuesday on Tax Ordinance

The Port Orchard City Council on Tuesday will vote on an ordinance declaring substantial need to raise taxes up to one percent. In past years, the city has automatically been able to do so. But this year, an ordinance is necessary because of negative inflation and the fact Port Orchard’s population has increased beyond the threshold that triggers a vote in such a case.

Read the complete story here.

Also at the meeting, the council will issue proclamations recognizing November as Pancreatic Cancer Awareness Month and recognizing Deliah Rene Luke for spearheading the Paint the Town event in August.

I’ll be at the meeting. Comment here, or e-mail me with your questions for the council,

PO Lodging Tax Funds Come in at 70 Percent of Budgeted Amount

Advisory committee has forwarded its recommendations for 2010 awards to the city council.
By Chris Henry
Revenue from the City of Port Orchard’s lodging tax for 2009 will fall short of estimates made at the end of 2008.
The city expected to collect $93,000 in hotel/motel tax revenues, but with the downturn in the economy, a revised estimate shows the city will receive $64,577, about 70 percent of the original amount.
The city treasurer’s office told the Lodging Tax Advisory Committee of the shortfall in early September. The committee makes recommendations each year on distributing funds among a pool of applicants. Recipients must submit claims to the city to receive their allocations.
In light of the shortfall, the city council debated how to honor commitments to recipients. At one point they considered disbursing funds on a first-come-first-served basis. But on Tuesday they decided instead to distribute the funds proportionally.
“We wanted to do it in a fair and humane way,” said Fred Chang, chairman of the committee.
The city has asked recipients to submit claims no later than Oct. 27, so the total amount available can be calculated.
Lodging tax funds not claimed in any given year are rolled over into the following year. The city had $21,776 carry-over in funds that weren’t claimed last year. The council awarded these funds to four applicants not chosen in the first round. The amount of supplemental funds not yet claimed will be considered in the total yet to be distributed.
Mike Strube, chairman of the Port Orchard Chamber board of directors, said the lowered award did not come as a surprise. The chamber’s successful fundraising this year will help offset the loss of funds.
“I think we all knew, with the economy the way it was, that we may not see as much from lodging taxes,” said Strube. “It’s a little lower than I expected but we’ll roll with it.”
Chang said the council will encourage organizations that can make up the loss in other areas of their budgets to decline all or part of any funds yet to be claimed.
The city’s 2009 lodging tax recipients and the amount they were originally promised include the Port Orchard Chamber of Commerce ($23,420), tourism and marketing duties performed by the city clerk ($20,000), Cedar Cove Days ($15,000), Fathoms ‘O Fun Festival ($10,500), Sidney Museum and Arts Association ($10,200), the Port Orchard Bay Street Association ($3,660), the Saints Car Club ($1,900) and the Port of Bremerton ($500).
Groups receiving awards from the supplemental fund include the city’s Festival of Chimes and Lights ($7,820), Concerts by the Bay ($5,000), foot ferry service for the Kitsap Harbor Festival ($4,400) and the city’s tourism committee ($3,000).
Notably left off the list of 2009 recipients was the Kitsap Peninsula Visitor and Convention Bureau. The council took the position that the VCB in recent years had fallen short in promoting Port Orchard. The VCB has since hired a new director.
The committee recently submitted its recommendations for 2010 lodging tax funds to the city council. According to Chang, 12 organizations made requests totaling $168,000. The city expects to bring in $61,000.
The committee ranked applicants based on how well they are seen to support tourism in the city. The VCB requested $20,000. Mayor Lary Coppola recommended $2,000. The committee has recommended the VCB receive $900.
“My sense was that they were a little skeptical of the VCB, but they did want to try and encourage them,” said Chang, who did not vote on the recommendation.
According to Chang none of the applicants were recommended to receive all of the funding they requested.

Port of Manchester IDD: Take the Poll

Should the Port of Manchester form an industrial development district to buy land for a future community center? Read the post, then take the poll on the homepage of this blog.

Port of Manchester to Revisit IDD Tax Monday
When: 6 p.m.
Where: Manchester Library

Revenue would be used for land acquisition and debt service.
By Chris Henry
Port of Manchester Commissioners will vote Monday on whether to form an industrial development district, a taxing district affecting property owners within port boundaries. Revenue from the IDD would fund the purchase of a downtown Manchester property that could some day be developed as a community center.
The IDD, which does not require a public vote, would allow the port to move quickly on the purchase while property prices remain low, said Alan Fletcher, contract administrator for the port.
Strong resistance to the new taxing district at the port’s Aug. 10 meeting led the board to defer the vote and leave the record open for a month. Some who testified supported the IDD, but opponents loudly protested the tax increase and called for at least an advisory vote on the matter.
Under the IDD the port could collect up to 45 cents per $1,000 of assessed property value in addition to the current levy (just more than 14 cents per $1,000 for 2009) for up to six years. Port commissioners estimate they would need to collect 20 to 25 cents per $1,000 to purchase the land.
Fletcher calculates the proposed tax would cost the owner of a $250,000 home about $57.50 per year. The IDD tax is temporary and would expire at the end of the six years.
The proposed community center on the site eyed for purchase is part of the port’s parks and recreation plan, developed with community input. The center would be developed in the future in partnership with civic groups and would likely include an expanded library with space for community activities.
A portion of the IDD revenue would go to retire debt related to expanded parking at the port’s marina.
Port commissioners Steve Pedersen and Daniel Fallstrom, who were elected in 2008, expressed disapproval during their campaigns for the Port of Bremerton’s IDD, formed in 2006 to pay for the new Bremerton Marina. That IDD, which was not well publicized, became a political albatross for the Port of Bremerton.
Fallstrom in 2008 said Port of Bremerton residents should have had a say about the new tax that was set at the full amount allowed by law and in many cases more than doubled individual property owners’ payments to the port. Asked why he did not support an advisory vote for the Port of Manchester’s IDD, Fallstrom said, “It’s too late to do that this year, and cost for a special election would be $15,000, which the port can’t afford.”
Fallstrom added that Manchester’s IDD would not be as costly to property owners.
Residents who favor the community center have told the board they want to secure land for future generations rather than seeing it lost to development, Fallstrom said.
“What we’re trying to do is we have a great opportunity here to get things for the future generations at a great price,” he said.
Fallstrom would not say how he will vote on Monday.
“This is one of these hard decisions elected officials need to make. We’ll just wait ’til Monday and see what the three of us decide,” he said.
Pedersen said the board made extra efforts to seek residents’ opinions on the port’s future in part because of Bremerton’s debacle. He was a proponent of the recently formed port advisory committee whose input led the board to float the IDD. Responses from residents during and after the public hearing have given him pause.
“It’s really made me step back and take a good hard look at the authority and power to tax people, and I take that very seriously,” said Pedersen. “Just because an IDD is a tool, it doesn’t mean you take it out of the tool box and use it.”
Long-time commissioner Jim Strode, who is running unopposed in the upcoming November election, said at the meeting in August, “If I go down in flames for any decision we have to make, I’m OK with that.”

Here’s a map of the Port of Manchester:

Heads Up Manchester: Port Considering New Tax

Correction 8/10: This blog post incorrectly said the port’s levy collection rate per $1,000 of assessed property value has remained the same throughout its history. The port has never in its decades-long history sought a lid lift beyond annual increases allowed by law. But the collection rate has changed as the total value of assessed property has changed. The rate for 2009 is 14 cents per $1,000.

Port of Manchester to Hold Hearing on Proposed Taxing District

Public opinion sought, although matter is not subject to a vote.
By Chris Henry
The Port of Manchester will hold a public hearing on Monday on a proposal to create a taxing district, called an Industrial Development District, within the Manchester Village Commercial Zone that would apply to all residents within port district boundaries. The meeting is at 6 p.m. at the Manchester Library.
The port would use revenue from the IDD to purchase property and retire debt.
Port commissioners had been considering a ballot measure for a levy lid lift. The current levy rate of just over 14 cents per $1,000 of assessed property value has never been adjusted since it was established decades ago, The port has never in its decades-long history sought a lid lift beyond annual increases allowed by law, said Alan Fletcher, port administrator.
Instead of the levy lid lift, the port’s board of commissioners chose to pursue an IDD, which would allow them to raise the levy rate up to 45 cents per $1,000 of assessed value for a period of up to six years. Forming an IDD does not require a vote.
Port commissioners estimate the amount they would need to collect from property owners for the proposed land purchase would be between 20 to 25 cents per $1,000 of assessed value above the current levy rate for a period of six years. Collection would start in 2010.
The port will use money from the IDD to promote its goal of furthering recreational opportunities and economic development in Manchester. One potential use for the land to be purchased is to expand the library and add facilities that could be used for recreation and meeting space.
Although a vote is not needed to form an IDD, port commissioners want to hear from the public about the proposal, said Fletcher. The port wants to avoid the debacle incurred by the Port of Bremerton, when that port’s board of commissioners formed a six-year IDD for taxes collected beginning in 2007 to rebuild and expand its marina. The action was not well publicized in advance and came as a surprise to many who ended up paying the tax.
IDD’s are powerful, said Fletcher, but they are temporary and limited in that the money cannot be used for ongoing maintenance.
Besides purchasing land, the port will use a portion of IDD revenue to retire its share of debt on property it recently purchased to expand parking at the marina. The total cost, $650,000, was 75 percent funded through a grant from the state’s Recreation Conservation Office. The port must provide 25 percent in matching funds or in-kind services such as volunteer labor. Revenue from the IDD special levy would allow the port to pay off the 25 percent match.
Written testimony on the proposed IDD can be delivered before the hearing to Contract Administrator Alan Fletcher, Port of Manchester, Box 304, Manchester, WA 98353; (360) 871-0500.

No Surprise, Assessed Property Values Down Again

Most property owners in Kitsap County will see an eight to 12 percent reduction in their assessed values for taxes payable in 2010, Kitsap County Assessor Jim Avery announced Tuesday. In most cases, however, that won’t equate to a corresponding reduction in taxes, due to voter approved levy rate increases in all areas of the county.

The assessor’s office will mail out change-of-value notices on Wednesday to 105,215 Kitsap County residents. Updated information on assessed property values has been available on the county’s Web site since last week.

Avery, who has been predicting an average 10 percent reduction in assessed values for this year, said the eight to 12 percent is what he expected based on analysis of real estate trends.

Asked to predict assessed valuations for 2010, Avery said, “I have no idea. I like to think we’ve hit the bottom from a price point, but I understand there’s still some foreclosures that are going to hit the market. Certainly it’s those foreclosures in my mind that are causing the prices of the properties to go downward.”

Read more in a story to be posted later on

Asked to comment on any silver lining in all this, Avery said – as we’ve heard from those in the real estate industry – this is a great time for first-time home buyers to jump into the pool, especially considering the $8,000 tax credit available to qualified buyers.

Is anybody out there making lemonade?

One More Chance to Speak Out on SKSD Levy Amount

The South Kitsap School District Board of Directors will hold a public hearing prior to voting tonight on a levy measure that would raise $70 million in property tax revenue for South Kitsap schools over the next four years. The meeting is at 6 p.m. at the district office 1962 Hoover Ave. SE.

The levy measure, to run Feb. 3, would replace the district’s current levy that expires at the end of 2009.

The board last Wednesday agreed to vote on a total levy amount that would factor in an 8 percent rate of inflation for the first year of the levy and 6 percent in subsequent years. The amount collected in the form of property taxes over four years would total $70 million, up from $67.6 million in an earlier proposal.

Terri Patton, assistant superintendent for business and support services, told the board the estimate would help the district weather continued economic turbulence that has been driving up costs for personnel, services and supplies, especially fuel for buses. Board members agreed.

Taxpayers would be charged an estimated $2.27 per $1,000 of assessed property value for 2010 and 2011. The estimated rate would be $2.28 per $1,000 for the last two years of the levy. The $67.6 million proposal would have collected an estimated $2.20 per $1,000 over four years. The current levy amount is $1.98 per $1,000.

What would the increased rate mean to property owners? Here’s an example (they ought to put this one on the WASL). The owner of a home valued at $250,000 currently pays $495 per year to local schools, or $41.25 per month. Under the lower levy option once being considered, the $67.6 million proposal, the annual amount would increase to $550 per year, or $45.83 per month. Under the $70 million proposal, the same homeowner would pay $567.50 per year for the first two years of the levy, and $570 per year for the last two years, at $47.30 and $47.50 per month respectively.

If you have anything to say about the levy, be there or be square. For more information on the levy, visit the district’s Web site.

Increased Property Assessments Could Result from PO Comp Plan Update

At more than 65 pages and more than 20,000 kilobytes in its electronic version, the City of Port Orchard’s draft comprehensive plan update is not exactly light bedside reading.
But the document, released to the public Monday, contains proposed goals and policies that will affect where people live and work, how they get around the city, the services they receive and the taxes they pay, among other issues. That’s why city officials are seeking citizen input on the plan now through its adoption by the city council in December.

One issue that’s likely to get close scrutiny is the potential effect of the new plan on taxpayers whose properties are rezoned to reflect revised policies on growth and economic development.
A change in zoning — for example from residential to commercial — could trigger an increase in assessed value, explained Kitsap County Assessor Jim Avery on Tuesday, but only if development in the surrounding area were to drive up the market value of the property.

For example, Avery explained, some properties on the Bethel Corridor did not see a significant increase in assessed value for some time after the area was rezoned commercial. Extension of the sewer line and the arrival of Fred Meyer were two factors assessors used to determine that the properties in question could now be sold for a significantly larger amount and so should be assessed at a higher value.

“There is a potential effect,” Avery said. “Is it automatic? We like to think we use some rationale when we revalue.”

A residential building in a commercial zone would not be protected from being assessed at the commercial rate simply because it was not being used as commercial property. Assessments are based on the property’s “highest and best use.”
If the increase in assessed value was greater as a result of the zoning change than others in the county, then taxes would go up as that rezoned property would be assuming a larger share of the tax burden, Avery said.
The draft comp plan is available in hard copy for $25 or as a DVD for $5 at City Hall. A free copy is available at

SK Fire Chief Speculates on Tax Implications of Regional Fire Authority

Note: The online version of the story referenced below was changed to reflect the correct current rate for South Kitsap Fire and Rescue’s EMS levy (30 cents per $1,000 of assessed property value) and the 2007 rate for the district’s fire levy ($1.17 per $1,000). A correction will run in the paper.

Also, I said the fire levy was a six-year levy. To clarify: the district ran and passed a temporary fire levy in 2006 for the maximum time of six years. The regular fire levy is permanent, and the district has both. The total levy rate for both is 98 cents per $1,000 of assessed value.

******* OK Here’s the post:

In comments following a story I wrote Sept. 9 on the South Kitsap Fire and Rescue EMS levy, readers expressed concern about the tax implications when/if SKFR merges with the Bremerton Fire Department and Central Kitsap Fire and Rescue. I asked SKFR Chief Wayne Senter what he knows. Here’s what he said:

Chief Senter:

“It is too early in the planning process to predict what funding mechanisms will be used to fund the expenses of the proposed West Sound Fire Authority. All of the funding mechanisms available to a fire district are available to the regional fire authority. We are currently determining what the expenses for the WSFR would be, once that is done, the options for funding will be determined. Regardless of what the planning process produces, voters will determine if the authority is formed and funded through an election involving all three fire service areas.”

Kitsap County Assessor Jim Avery, in an earlier post on this blog, also said it was to early too give definitive answers. He did have more information on funding options for RFAs.

Jim Avery:

“There is a lot of flexibility in how such an organization can be organized. Under a full RFA there would be only one governing body and the same levy rate would be charged to all property owners within the combined taxing district. This would be difficult to get started, as the CK ($1.26) and SK ($.98) levy rates are a ways apart. I think the two RFAs currently existing in the state are modified RFAs where the existing governing bodies (fire commissions and/or city council) continue while the existing levies continue in each of the districts. What is hopefully gained is a closer working relationship with more inter-local agreements to share protection areas and operational efficiencies.
I think it is very early to know what is going to happen at this point between the City of Bremerton, SKFR and CKFR. Anything that does happen, however must ultimately be authorized by the voters. Feel free to call if you still have questions.
Jim Avery”

In the same blog post, we heard from Mark Horaski of Valley Regional Fire Authority, formed in 2007 from the merger of the Algona, Pacific, Auburn fire departments. Notice he says,”Some of our cities experienced higher increases than the average due to differences in the original city levy rates and fire services that were being provided.”

Mark Horaski:

“The Valley Regional Fire Authority was officially formed on January 1, 2007, the result of a proposition approved by the voters during the November 2006 election. The agreed upon taxing structure was that 2007 would see each participating city (Algona, Auburn and Pacific) continue to levy their regular property tax rates and transfer funds to the VRFA for its operations. Starting in 2008, the VRFA has levied its own property tax, which is comprised of the following:
1. A property tax levy; and
2. A fire benefit service charge.
Note that this funding mechanism was also approved by the voters in November 2006. The fire benefit service charge must be renewed by the voters every six years, and in exchange for the ability to levy it, the maximum property tax rate that the VRFA can levy is $1.00 per $1,000 of assessed value (versus $1.50 per $1,000 of AV for a non-FBC funding model).
It is important to emphasize that each of the participating cities reduced its own 2008 property tax levy rate to reflect the fact that they were no longer providing fire services to their citizens.
During the original vote on the proposition, it was outlined to taxpayers that the average citizen would not see an increase in the cost of funding fire operations of approximately $60 per year. We were pleased to keep this increase to approximately $38 for 2008.
You are correct that some of our cities experienced higher increases than the average due to differences in the original city levy rates and fire services that were being provided. This was discussed during the vote on the VRFA establishment however, and it was outlined that some citizens would be paying more for fire service under the VRFA model.
However, in exchange for a higher rate, they would receive:
1. A full time 24/7/365 professional firefighter staffed station (one VRFA city was previously staffed with a combination of professional firefighters and reserves, and did not provide 24/7/365 service); and
2. Full three person engine crews for our entire service area (this increases fire fighter safety, and provides additional response capabilities while on a call–one VRFA city previously ran with 2 person engine crews).
Finally, it was noted that the service contract that one city had with another for the provision of fire services did not reflect the cost of providing service to that city–as a result, that city’s contract rate would have gone up significantly at the next renewal. The VRFA formation took care of this situation.