Myth of infeasibility

Fact:  The financial feasibility of the proposed City of Fairwood is established by the independent study conducted by Berk and Associates, and subsequently confirmed by a Finance Committee of the Fairwood Task force.  The Berk Study and Finance Committee analysis was conducted by teams of experts in municipal and corporate finance. 

 

Opponents distort by picking at pieces, while the truth of feasibility is the whole of the revenue and expense analysis for the proposed City of Fairwood.

• The City would collect the least amount of sales tax (per capita) of any city in King County.  This was true, but actual overall revenue for the proposed City, exceeds expenses (at slightly better service levels) and generates a revenue surplus of 10%. 
  [Since the boundary change reduced the population of the proposed City of Fairwood, the city would no longer be ranked last in per capita sales tax revenue on a list of King County cities.]
• The City would have to raise property taxes.  The maximum tax rate allowed by law for a City of Fairwood (with service districts providing fire protection and library services) is $1.60 per $1000 of assessed valuation.  A levy lid lift is required every few years to preserve this tax rate, on account of the impact of Initiative I-747.  An election is required to support a city's request for a levy lid lift. Fairwood voters have supported a levy lid lift and renewal of the benefit charge for Fire District 40, so this is not a new concept for Fairwood voters.  

This myth is calculated to scare residents into believing that a City of Fairwood would have to raise taxes.  It is a powerful assertion that misrepresents the truth, agreed upon by teams of experts in municipal finance. 

 Myth of higher taxes

Fact:  The statement of this myth is found in literature provided by the City of Renton in January.  It has subsequently been acknowledged as inaccurate.  The truth is that for an average homeowner, the taxes for the City of Renton and City of Fairwood would be about the same, give or take a few dollars.  A tax calculator is provided on this web site (on the taxes page), so you can determine the difference from the mix of property and utility taxes for your particular circumstance.

• Persons who pay rent for their housing will pay five (5) times more in utility taxes collected for Renton (6% tax rate on utilities) than a City of Fairwood (1.1% tax rate on utilities).
• Small businesses will pay a tax to the City of Renton for each employee at a rate of $55.00 per employee, per year.  The budget for the proposed City of Fairwood has no such tax.  

 Sugar daddy myth

Myth: Renton's broad industrial and commercial tax base will benefit the community of Fairwood.

Fact:  The Fairwood community will continue to generate a revenue surplus, if annexed to the City of Renton.  The surplus (tax - expense) will likely fund projects in Renton's central business district or in other neighborhoods.

Reverse sugar daddy myth

Myth: Annexation of Fairwood is necessary to provide an annexation option for Cascade and Spring Glen neighborhoods.

Fact:  The annexation of Cascade and Spring Glen neighborhoods (west of Fairwood) is now in the range of economic feasiblibity, as King County and the State of Washington will be providing economic incentives for Renton.

Legislation signed by Governor Gregoire (SB 6686 - 2005-06) would provide Renton with more than $5 million in sales tax revenue to offset any deficits associated with a large annexation, such as Cascade and Spring Glen.

King County is offering incentives to cities to annex large unincorporated areas.  The county offered $1.9 million dollars to the City of Issaquah as an incentive for the annexation of Klahanie and Greenwood Point neighborhoods in August 2005.

 Myth of political clout for Fairwood

Fact:  The population of the community of Fairwood is about half of the size of the existing City of Renton.  However, if Renton annexes all of its potential annexation area, the Fairwood community population will represent only 21.5% of Renton (based on current population statistics). 

Downtown business and industrial interests also exercise substantial political force within the City of Renton, to the detriment of the residential neighborhoods.

Myth that
annexation 
lowers risk 

Fact:  The City of Fairwood would start debt free, with a clear understanding of the municipal financial realities, post I-747.  Taxpayers of a City of Fairwood would see no additional risk or burden. 

However, a community annexing into the City of Renton would inherit substantial debt.

• $28.3 million principal outstanding general obligation debt (2005).
• $2.28 million principal outstanding voter approved debt (2005),  bond for Senior Housing ($0.08 per $1000 of assessed value)
• Unfunded benefits for 114 retired personnel subject to Law Enforcement Officers and Firefighters (LEOFF level 1) retirement system.  In 2005, the City of Renton projected the cost to exceed $1,000,000 annually at the peak years of their retirement. 

In addition, residents of the community of Fairwood, annexing into the City of Renton would still be responsible to pay off bonded indebtness of special districts, even though the services previously provided by the special district are subsequently provided by the City of Renton.  Residents would continue to pay property taxes for the following bonds, until the debt is paid off, even though they would also be paying taxes to the City of Renton for substitute fire and library services. 

• Library Bonds (authorized by election in September, 2004)
• Fire District 40 bonds (authorized by election in November, 2005)