South King Fire and Rescue has backed off a plan to de-annex a small portion of its territory and will instead try to cede the area to the Kent Fire Department to avoid a hike in home insurance rates.
South King had been moving along as recently as February with a plan to de-annex a 1.16-square-mile piece of territory to avoid losing tax revenue due to rising levy rates in the area. The district planned to enter into agreements with individual property owners to pay for fire protection, rather than through tax bills. South King officials discovered that this might cause property insurers to categorize properties as having no fire protection, leading to an increase in insurance rates.
The South King board of commissioners voted March 22 to accept the new plan to cede the area.
The small area is located in unincorporated King County in the northeast part of the district. The area is roughly bound by the Green River on the north; Lake Fenwick on the west; state route 167 on the east; and 287th Street on the south.
South King spokeswoman Kendra Kay said that Deputy Chief Mike Knorr realized the potential effect on property owners after an inquiry with the Washington Survey and Rating Bureau.
“It would essentially place them in a category of no fire protection, like found in rural areas in Eastern Washington,” Kay wrote in an email. “This would also make it extremely difficult for homeowners to acquire insurance or increase the insurance premiums substantially.”
There are a total of 65 parcels of property in the area, 32 of which contain homes and one that contains a business. The district held two meetings recently to inform citizens of the now-scrapped plan to de-annex the territory. Kay reported that a total of seven property owners showed up for two separate meetings.
South King sought to de-annex the territory because of a concern that it would lose more than $5 million in tax revenue because of the network of taxing entities that overlap in the 1.16 square mile area.
South King Chief Al Church said at the March 22 meeting that the annexation by Kent would be done by citizen petition without an election.
According to state law, no election is necessary if 60 percent of registered voters in the area sign a petition to approve the merger.
Then, the board of the district that is annexing the territory — in this case, Kent — must adopt a resolution approving the annexation.
Kent Chief Jim Schneider said that the proposal will go before his board of commissioners for acceptance at a meeting slated for April 30. Schneider said that Kent often responds to service calls in the 1.16 square mile area first because it’s so close.
“It’s almost a no-brainer,” Schneider said of the annexation. “We’re first in all the time.”
Since Kent already serves the area — and does not collect property tax revenue from it — he’s not concerned about it costing Kent anything.
There are six taxing entities that overlap in the 1.16 square mile area, including South King. State law allows these six entities — combined — to levy, or tax, a total of $5.90 per $1,000 of assessed value per property.
Because of declining property values, taxing entities have had to increase operating levies to maintain revenue levels — tax revenues decline as property values decline. If each of the six entities continue to increase levy rates, that $5.90 cap could be breached.
If that cap is breached, some of these taxing entities would have to lower their levy limits. There is a hierarchy among tax districts, and South King is second in line next to the flood district to have to lower its rate.
That lowered rate would have to be reflected across its entire district — from Des Moines to the Tacoma border with Federal Way — by the same rate, according to state law.
Church predicted that lowering the rate across the whole district — called pro-rationing — would cause a loss of $5.3 million in revenue and may require laying off 40 to 45 employees.
