Fairwood Feasibility Consultants Answer
Hard Questions at Second Public Meeting

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Responses to
"Fairwood Incorporation Study's
Second Public Meeting"

April 23 - 10:16 pm
lanb said: Thanks Mary for the clarification on the streamlined sales tax rule.

Cory C - I don't think it is right that in the last 5 years only a few houses have been built here. Both woodside and trovitsky park developments have been built in the last 5 years.
Also, from what i remember the study had various scenarios of the amount new cosntruction taken into account. I may be wrong here and may have to double check.

April 13 - 3:03 pm
Cory C said: One of the most obvious mistakes in the study is the amount of "Redevelopable land".

When I looked at the maps, it shows the entire Carriage Lane neighborhood as redevelopable. Yes, it is true, the lots are large and you could put 1, 2, 3 even 4 houses on the existing lots but who would ever want to allow a current neighborhood of 140 houses be redeveloped in that way.

Even if we wanted to add a house to our lot the county fees would be too much to make it profitable. One of the reasons to become a City of Fairwood is to have more local control and that would probably mean lower fees. That would mean even lower revenues on construction.

The study estimates many new houses to be built every year yet a real estate person I know said there were less than 5 houses built last year and that in the last 5 years there was only one year when more than 10 houses were built.

This is an easy line item to examine. If this was not looked at carefully then what other numbers have been carelessly been put together?

April 7 - 2:05 am
Ron H said: Corrine, Fairwood Crest, Fairwood West, Maple Ridge Estates, Elliott Farms and a few other smaller neighborhoods (about 15-20% of the Fairwood area) are in the Renton School District. I have a daughter graduating from Lindbergh this year after 12 years in Renton schools. She has been accepted to UW Seattle and Seattle Pacific University (and offered a 50% academic scholarship). My younger daughter will start at Lindbergh next year. Both kids routinely score above the top of the passing range on the WASL and are members of the National Honor Society and National Junior Honor Society. I have met one Renton teacher that I really did not like. She was not invited to teach a second year. My kids have had many very good teachers. OK, I was careful to avoid the Renton High School service area when I bought my house, but the problems at Renton High are largely caused by a lack of parental dedication on the part of residents of the West Hill area, a part of King County between Renton and Seattle, that is part of the school district, but not yet part of the city. Lindbergh, on the west side of Fairwood, is a good school and I have heard that Hazen, in Renton’s East Highlands, may be a better school. Kent schools have a pretty good reputation. I graduated from Kent-Meridian several decades ago, but I hear that it may not be the best place to send your kids today. Kent is the fourth largest school district in Washington. Is it getting too big to deliver uniform excellence?
Oh, and if you want to get shot at, at a mall, you should go to Tukwila. You will get to know the area better soon, and you may find out that the bad things you think you know about Renton have been exaggerated. Renton has an unusually high proportion of restaurants, many of them very nice. When you have tried the places in Fairwood, which won't take too long, drive the extra 10 minutes to Renton where you can choose from the many small family owned places to the large regional and national chains.
The helicopter is operated by the King County Sheriff's Department.
Since the KCSD is the law enforcement agency in Fairwood, it is actually more Fairwood's helicopter than Renton's. When requested, KCSD provides air support services to all of the Cities in the County. It is noisy, but a bit of noise is probably better than having criminals getting away. However, since Renton is planning to provide twice the police service to Fairwood, if annexed, than the KCSD now provides or than the feasibility study assumes (but doesn't really fund sufficiently), for about the same cost charged by the county, you are likely to hear the helicopter a bit less if Fairwood has the good sense to ChooseRenton.

April 6 - 12:34 pm
Corrine said: I admit I am vehemently against incorporation into Renton.  We only recently moved to Fairwood, which we selected for the school associations with Kent, its location and the fact that there isn't a huge shopping district.  If I wanted to live in Renton, I would have saved money and purchased in Renton.  I concur that things could be spruced up some and improved eateries would be great. But I believe if we incorporate into Renton things will only get worse, not better.  The taxes will be increased with no increase in services and likely we'll hear the Renton police helicopter hovering overhead far more often.  We need to remember that perception rules and if we are part of Renton will then the area will be associated with poor schools, drugs, and the place you can go to get shot at the mall.  This would decrease the value of our homes and people would not want to relocate to the area.

April 5 - 8:34 pm
Chris said: Just read over the invigorating discussion from March.  Having attended one of the consultants' meetings, I can say that incorporation seems viable - at least as viable as any of the other troubled cities in the area.

The real issue, of course, is that Fairwood is a geographically distinct region which ought to have local rule for more efficient and democratic governance.  If retirees are fearful of higher taxes, that ought to be addressed.  As parent to two kids at Fairwood Elementary, I do not fear more apartment complexes.  We have lived in similar.  Change is inevitable, and with incorporation we can, together, direct that change.

And yes, I am naive.  Happily so.

April 3 - 8:01 pm Mary said: For information about the streamlined sales tax, go to Washington State's Department of Revenue site.

"It covers purchases that are delivered to your home.  What it doesn't cover is the following:

If you do not ship or deliver, nothing changes about the way you handle sales tax.

For example, if a buyer receives merchandise at your retail business location, sales tax continues to be based on that location the origin of the sale.

Additionally, this change does not affect:

* Deliveries to locations outside the the state of Washington
* Wholesale sales
* Services
* Sales of motor vehicles, trailers,
semi-trailers, aircraft, watercraft,
modular homes, and manufactured and
mobile homes.  Sales tax will continue to
be based on the seller's location even
if the seller delivers the items to
customers.
* Towing companies

So, if you purchase a car in Renton or Bellevue, that city and not Fairwood would get the sales tax.

March 28 - 5:03 pm
lanb said: I believe one of the big changes in favor incorporating is the sales tax law that allows the tax to go the point of delivery instead of point of sale.

As the article illustrates, the sales tax on a car that a fairwood resident buys at a Renton (or other) dealership will now reach fairwood and can be used to augment fairwood's revenue directly.

March 28 - 11:48 am
Jeff said: Sam and Erin - Bryce is Absolutely correct.  The studies are based on best case scenarios and then "hopefully" a City of Fairwood would be economically feasible.  The assumptions of the surveys are highly risky and many of us are not willing to risk our family's futures on unrealistic forecasts.  Do the names Enron, AIG and Washington Mutual ring a bell?

Fairwood has extremely limited business revenue, especially if the Red Mill area annexes to Renton as they overwhelmingly want to.  So a City of Fairwood would have to cut services and raise property taxes. 

I look forward to voting down the City of Fairwood AGAIN.  Then we can pursue realistic options like joining Renton as Benson Hill and other communities successfully have with great satisfaction. 

March 28 - 8:34 am
Bryce Nelson said: Sam: thanks for your response.  If you have a link to these newspaper articles you cite, I'd certainly appreciate it.  Or if it's not online, certainly you can provide a date and page number and the paper it was in so we can all see for ourselves the information you talk about.

Regarding other small cities, the picture certainly isn't as rosy as you paint.  Maple Valley is facing significant reductions in revenues in 2009.  Take a look at their city council meeting minutes from 3/16/09.  They are facing reductions in revenues due to the real estate market slowdown and increases in employee costs due to higher salaries and benefit costs (i.e. health care).  They're talking about having to raise taxes and cut projects to make up for these shortfalls to keep from being insolvent. 

Newcastle, the other nearby city that chose to separately incorporate instead of becoming a part of Renton, cut their budget 25% in 2009.  That's not a typo.  A 25% cut is gigantic.  Why did they have to make such severe cuts?  Because they largely rely on construction of new homes for their revenues, and all that money derived from new home construction is essentially gone.  Sound familiar?

And the picture doesn't get any better for Newcastle.  In their budget, they're pretty clear that if the economy doesn't turn around quickly, they're facing insolvency in two to three years unless they increase taxes. 

Which takes me to the Berk study.  You're right, it showed a revenue surplus for the Fairwood area if we voted to increase our property taxes via a levy lid lift within two years of incorporation.  If we didn't increase taxes, the city would be in the red within two years.  And tha's basically while we'd be receiving the same level of service King County provides, which is significantly lower than Renton.  So we'd be paying more than Renton and getting less. 

But I give the authors of the Berk study credit they were totally transparent and honest that the only way Fairwood could survive as a city was by voting every few years to increase our property taxes.  That's something that would distinguish Fairwood from every other city in the region, as we'd be the only ones that would have to continuously increase property taxes by a levy lid lift to survive.  And they did a good job of estimating the costs, providing much more detail then the Henderson & Young study about the actual costs of running a city. 

Renton's past and present analysis also shows a deficit if it took on Fairwood without the state sales tax credit.  But as I previously posted, that sales tax credit is required by state law to be spent entirely on Fairwood, so Fairwood would end up getting money from the rest of Renton, not shipping it away. 

Finally, you also posted that the Petrovitsky corridor governance study showed a surplus in revenues for a city of Fairwood.  That's not true.  I'll directly quote the first two lines of the incorporation part of that study: "Does incorporation appear financially feasible?  Probably not today, but perhaps in the future.  If the study area were an incorporated city today, given current tax-rates and costs-of-service, the revenues available to fund day-to-day expenditures would probably exceed the city's day-to-day costs."  The study goes on to explain that if the state replaced motor vehicle excise tax money taken away by I-695, the area had an increased commercial presence, there was an appreciation in real estate values, and there was increased capital spending that would prevent the proposed city from having to build a lot of stuff, Fairwood might be feasible.  Other than the increase in property values, which is reversing itself, none of these things happened. 

So again, I'd encourage people to get the facts about the things Sam talks about.  Because when you do, you'll find that the reality is sobering, and very different than his contentions.

March 27 - 7:48 pm
Sam Shirley said: Hey Bryce, I see you are saying that this last study, done by Henderson Young and Co. shows a surplus that is not based in reality.  How about the Burke and Associates Study that showed a surplus?  What about the study done by the Fairwood Task Force that showed a surplus?  What about the Petrovitsky Corridor Governance study that showed a surplus? 

You are a "choose renton" member, you obviously support and trust Renton.  They say that if they annex Fairwood they expect a significant tax surplus.  What about that?  Is everyone wrong but you?

Your "no money" position is absurd.  All of the smaller area cities are running in the black.  It is cities like renton that are suffering because they depend on sales tax on big ticket items such as cars.  The problem is that those big ticket items fall into the discretionary spending category.  People are cutting back on those purchases.  Fairwoods revenue comes from non-discretionary spending, like your property tax, gas for your car, getting a haircut or taking your clothes to the cleaners.

The real financial issue that should concern Fairwood residents is what is going to happen to their home values if we allow Renton H.A. to build 400 to 500 units of low income apartments (projects) on the property they own off of 140 SE.  How will this affect the educations of our children when 500 more families from rentons "at risk" neighborhoods relocate up here?  And please dont try to tell us that RHA has decided this should be "senior housing". 

Their spokesman was quoted in the paper when they purchased the property saying they were building low income housing.  They didn't mention "senior housing" until it was apparent Fairwood would get another vote on incorporation. They are obviously concerned because they know the citizens of this community would not allow another low income apartment complex to be constructed if we controlled our own zoning. 

Local control is our answer.  The City of Fairwood could stop the construction of any more apartments.  We could keep our tax surplus here to use to improve OUR neighborhood for a change.  Protect your home's value!  Protect the quality of our children's education!
Support the City of Fairwood.

March 26 - 9:34 pm
Bryce Nelson said: The study shows a surplus -- because it underestimates costs, and overestimates revenues.  The study assumes that the costs of labor will not increase from year to year.  Fairwood would be a contract city.  That means it would contract with other, larger governments (like King County) to receive most of its services.  The employees of these governments are typically unionized and collectively bargain for their wages and benefits. 

When employees collectively bargain, they almost always negotiate increases in salaries from year to year.  These typically are determined by different indexes that outline the increases in the cost of living for the region, and result in COLAs for employees of 3-6% or more a year. 

So does the study assume Fairwood would see these costs?  No.  It assumes costs would only grow with population -- that with no growth, Fairwood's costs would increase by 0%.  It's simply not correct to assume that Fairwood's labor costs would not increase from year to year.  Labor always gets more expensive. 

The study shows a surplus because it not only hides the true costs of labor for Fairwood, it is also grossly overoptimistic when it comes to its revenue assumptions.  Maple Valley's sales tax collections are off over 10% from December of '08 to January of '09, and over 10% from January of '08 to January of '09.  Yet the Fairwood incorporation study assumes that sales tax revenues would increase, when that's not happening anywhere in the state, including the comparable city of Maple Valley.  And that doesn't even factor in the sales tax revenue the study assumes would come from 174 to 190 new homes a year -- homes that aren't being built now, and won't be in the future.

So yeah, the feasibility study shows a surplus.  It's easy to do that when your assumptions aren't based on reality.

March 26 - 4:33 pm
Erin Aboudara said: Jeff:  There is no obvious pro-incorporation bias in this article.  The writer/editor is just asking questions that people in the area would like to know.  Everyone that I have spoken to who has lived in Maple Valley since incorporation has been voted on have told me that their taxes have not gone up anymore than neighboring areas outside their city's boundary.  People that I know in Maple Valley, Covington and Newcastle love their respective cities.  They even wonder why Fairwood hasn't already incorporated!  Their cities are MAKING MONEY and so could Fairwood.  Why don't you do some investigating and call around to Maple Valley and Newcastle yourself if you think the article is biased?  The article was about the most recent study but all of the studies show that Fairwood would be able to pay its bills.

March 24 - 11:03 pm
Sam Shirley said: Jeff, Fairwood has the money it needs to be its own city.  I cite the Henderson Young & Co. study, the Burke and Associates study, the Fairwood Task Force study and the City of Renton, who says Fairwood has a significant tax surplus.

Please share your sources that declare Fairwood bankrupt.  Or just admit that it is you that is biased.  If you like Renton, just say so, and then tell us what Renton can do for us that we can't do for ourselves.  With Renton we have everything to loose and nothing to gain.  Let's keep our money, let's take control of our zoning, local control is the answer.  Support the City of Fairwood.

March 23 - 8:18 pm
Jeff said: It is a obvious pro-incorporation article.  I wish this "community news" would just admit it is biased in favor of incorportaion.  Be honest.  A bankrupt city of Fairwood is a terrible idea no matter what city you compare it to.  CHOOSE RENTON!!

March 23 - 12:03 pm
David said: Kudos to Fairwood Community News! 

Great job of reporting the information from Maple Valley Finance Director Tony McCarthy.  This information really shows how the City of Fairwood would operate.  It would be very different from how Renton works.  Renton has bigger city problems.  It seems to me that Maple Valley has problems much more like what Fairwood would experience.  Smaller city, more manageable, more responsive, and local control.

Thank You again, and keep up the good work!

March 23 - 10:48 am
Erin Aboudara said: Terrific, well-written article!  I appreciate the Maple Valley information re:cost of operations, etc.  Thanks! :-)