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4242
KITSAP CO ADMIN SVC/BAINBRIDGE ISLAND/PORT ORCHARD
Revenue Sharing Upon Annexation
Finance
LEG 12-1
09/04/2001
09/01/2013
& POULSBO KC-489-01
Review every 5 yrs after 2003
Interlocal Agreement Between Kitsap County and the
City of Bainbridge Island, City of Breme. rton, City of Port
Orchard and City of Poulsbo Coflcerning Revenue Sharing
Upon Annexation and In Conjunction With Major Land Use
Decisions Within a City's Urban Growth Area
This Agreemem, made pursuant to Chapter 39.34 RCW, is between KITSAP COUNTY
(hereinafter, the County), a political subdivision of the State of Washington, and the CITY OF
BAINBRIDGE ISLAND, the CITY OF BREMERTON, the CITY OF PORT ORCHARD, and
the CITY OF POULSBO, (hereinafter, the Cities), municipal subdivisions of the State of
Washington.
WHEREAS, through the Kitsap Regional Coordinating Council (hereinafter KRCC), the
County and the Cities have worked together constructively on revenue sharing issues that in the
past have been adversarial; and
WHEREAS, the County and Cities sought a balanced set of revenue sharing provisions
that would benefit both the County and the Cities and support the orderly evolution of logical
land use patterns and jurisdictional boundaries; and
WHEREAS, the County and Cities reached accord on a set of Principles of Agreement
for Revenue Sharing in Annexations and in Major Land Use Decisions; and
WHEREAS, the County and CRies desire to implement the Principles of Agreement
through an imerlocal agreement;
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
contained herein, the parties agree as follows:
SECTION 1 ANNEXATIONS
The purpose of this section is to provide a framework for logical and orderly annexations
that are consistent with the Growth Management Act, Chapter 36.70A RCW (hereinafter GMA),
and to mitigate the fiscal impact to the Coumy of annexations initiated after the effective date of
this agreement.
1.1 The Cities each confirm their willingness to eventually annex all land
within their designated Urban Growth Area (hereinafter UGA) boundaries.
1.2 Each City shall encourage annexation of all lands equally, and will support
logical and coordinated annexations, consistent with the intent of the GMA.
1.3 As part of the KRCC's 2002 Work Program, the County and Cities will
continue to address coordinated developmem within the UGAs, including infrastructure
slandards and funding
1.4 Before the County constructs a major infrastructure improvement within a
City's designated UGA, the County and the City will negotiate and execute an intedocal
agreement that specifies the level at which the City shall reimburse the County for a portion of
its investment in the infrastructure improvement if the area where the improvement is to be
located is annexed within a specified period of time.
1.5 The County and the Cities anticipate that each specific proposed
annexation will requ'tre negotiation of other issues particular to its time, place and geography.
The Cities and the County commit to completing these negotiations and executing an interlocal
agreement on such issues in a timely manner.
1.6 As part of this agreement, the County will not oppose annexations within
that City's designated UGA or invite the Boundary Review Board to invoke jurisdiction.
1.7 The Cities agree to share with the County revenue lost to the County and
gained by the annexing City as follows:
A. Revenue sharing payments shall be based on the following
three sources of revenue:
1. The County's portion of the local retail sales tax levied under Chapter
82.14 RCW;
2. The ad valorem property tax levied by the County pursuant to RCW
36.82.040 for establishment and maintenance of county transportation systems;
and
3. The admission tax levied by the County pursuant to Chapter 36.38
RCW.
B, For purposes of this Section, "lost revenue" means an amount computed as
follows:
The combined total of the County's collections from all tltree sources
within the annexation area during the calendar year preceding
anaexation
The combined total of the County's collections from all three sources
within the annexation area during the first full calendar year following
C The amount of the payment from the City to the County will be based on a
three-yeur "sof~ landing" approach as follows:
I The Year I payment will be equal to 75% of'the County's lost revenue:
2. The Year 2 payment will be equal to 50% of the County's lost revenue;
and
3. The Year 3 payment will be equal to 25% of the County's lost revenue.
D. The calculation of lost revenue pursuant to subsection B of this Section
requires revenue data for one full year following annexation. Therefore, the
County shall initiate a request for payment under this Section by written notice to
the annexing City within two years of the effective date of the annexation.
SECTION 2 MAJOR LAND USE ACTIONS
The purpose of this section is to recognize that retail development near jurisdictional
boundaries has an impact on neighboring jurisdictions and, in particular, on existing businesses
and the demand for public services and facilities. This Section is designed to mitigate these
impacts by providing that sales tax revenues from new major business development within a
City's designated UGA, or from the relocation of an existing major business from a City to a
location within the City's designated ~JGA,.will be shared with the affected City.
2.1 For purposes of this Agreement, "major-land use" means:
A. A new development within a City's designated UGA that houses any single
retail tenant greater than 40,000 square feet;
B. The expansion of an existing retail business within the City's designated UGA
if the expansion is greater than 40,000 square feet;
C. A retail business greater than 25,000 square feet that is relocated fi.om a City
to the City's designated UGA; or
D. An automobile, truck, recreational vehicle, manufactured or mobile home, or
boat dealership, regardless of the size of the building permitted, that is newly
located within a City's designated UGA, or relocated from a City to the City's
designated UGA
2.2 The County agrees to share with the affected City revenue lost to the City
and gained by the County due to a major land use, as follows:
A. Revenue sharing payments will be required only for local retail sales tax
revenues generated fi.om major land uses. Because there are limitations, related to
confidentiality, on using a figure based on actual sales tax collections from the
new or relocated business, the revenue sharing payment will be based on
estimated sales tax revenues derived by using industry standards, such as the
Washington State Department of Revenue or the Urban Land Institute, for taxable
retail sales per square foot for businesses
B For purposes of this Section, "lost revenue" means an amount computed as
follows:
Total gross enclosed building square footage of the major land use
x
lndustry standard annual average retail sales per square foot for category of business that most
closely resembles the major land use
X
Tax rate levied under Chapter 82.14 RCW
for the first full calendar year following the date on which the County issues a
certificate of occupancy for the major land use.
C. The County will make revenue sharing payments for the first full three years
after the major land use receives a certificate of occupancy.
D. The revenue sharing payment from the County to the affected City will be
calculated according to the following formulas:
1. For the relocation of a major retail business from a City to the City's
designated UGA:
a. The Year 1 payment will be equal to 75% of the City's lost revenue;
b. The Year 2 payment will be equal to 50% of the City's lost revenue;
and
c. The Year 3 payment will be equal to 25% of the City's lost revenue.
2. For new development within a City's designated UGA that houses any
single retail tenant greater than 40,000 square feet, the payment amount will be
50% of the City's estimated lost revenue each year for the first three years.
F. The calculation of lost revenue pursuant to subsection B of this Section
requires revenue data for one full year following issuance of a certificate of
occupancy. Therefore, the affected City shall initiate a request for payment under
this Section by written notice to the County within two years of the date the major
land use receives the County's permission to occupy the building.
SECTION 3 MISCELLANEOUS
3.1 Duration. This Agreement will remain in effect until the terms of the
Agreement are fulfilled There is no other term agreed to by the parties
3.2 Reevaluation. Any City or the County may request immediate
reevaluation of this Agreemem by the KRCC Revenue Sharing Policy Cormnittee. If the
reevaluation fails to yield a resolution satisfactory to the requesting party within six months
from the date the request for reevaluation was made, the requesting party may initiate the
process for termination provided in this Agreement.
3.3 Termination. After completion of the Reevaluation process required by this
Agreement, a party may terminate this Agreement by 12 months' written notice to the other
parties. Termination does not extinguish the obligations of the terminating party under this
Agreement for annexations initiated, or major land uses for which an application is filed, prior
to the effective date of termination.
3.4 Filing. When fully executed, this Agreement shall be filed with the Kitsap
County Auditor.
3.5 Notices. Any notices required by this Agreement shall be delivered, or
mailed postage prepaid, and addressed to:
Kitsap County City of Bainbridge Island City of Bremerton
Clerk to the Board City Clerk City Clerk
Office of the Kitsap County City of Bainbridge Island City of Bremerton
Board of Commissioners 280 Madison Avenue N. 239 4th Street
614 Division Street Bainbridge Island, WA 98110 Bremerton, WA 9833~'/'
Mailstbp 4
Port Orchard, WA 98366
City of Port Orchard City of Poulsbo Kitsap Regional Coordinating Council
City Clerk Mayor Executive Director
City of Port Orchard City of Poulsbo Kitsap Regional Coordinating Council
216 Prospect Street 19050 Jansen Wy NE 25406 S. Kingston Road
Port Orchard, WA 98366 P.O. Box 98 Kingston, WA 98346
Poulsbo, WA 98370
3.6 Administration. As this Agreement contemplates no joint or cooperative
undertaking, each party shall administer the Ag/cement as t6 its own responsibilities under the
Agreement. The KRCC shall oversee the revenue sharing process provided for in this
Agreement.
3.7 Reporting. The County and the Cities shall report to the KRCC at the
start of each calendar year any payments made or received by the reporting jurisdiction pursuant
to this Agreement during the preceding calendar year.
3.8 Waiver. The failure by the County or any City to enforce any term or
condition of this Agreement shall not be construed to constitute a waiver of any other term or
condition, or of any subsequent breach of any provision, of this Agreement.
3.9 Entire Agreement. This Agreement includes the entire agreement of the
pa~ies with respect to any matter addressed in this Agreement
3.10 Amendment. This Agreement may be amended only upon the written
agreement of the parties made with the same formalities as those required for its original
execution.
3.11. County-wide Planning Policy. To the extent that anything in this
Agreement may be found to be inconsistent with any part of the Kitsap County-wide Planning
Policy, the County and City in 2002 will review the applicable parts of the County-wide
Planning Policy and revise them in accordance with this Agreement.
3.12 Review. The County and the Cities shall review this Agreement within
the KRCC in December of 2003, and every five years thereafier~
3.13 Effective Date. This Agreement shall take effect retroactively to
September 4, 2001, as this date has been expressly agreed upon by all the parties.
Interlocal Agreement Between Kitsap County and the City
of Bainbridge Island, City of Bremerton, City of Port
Orchard and City of Poulsbo Concerning Revenue Sharing
Upon Annexation and In Conjunction With Major Land
Use Decisions Within a City's Urban Growth Area
APPROVED BY THE KITSAP COUNTY BOARD OF COMMISSIONERS
this ["//'h day of ~) .Jd.~. ,2001.
C}lt~ Endresen, Chair
Jan An~k~) Commissioner
Tim E~t~k f~mrr~
ATTEST:
Hol~
Clerk of thB Board
7
Interlocal Agreement Between Kitsap County and the City of
Bainbridge Island, City of Bremerton, City of Port Orchard and
City of Poulsbo Concerning Revenue Sharing Upon Annexation
and In Conjunction With Major Land Use Decisions Within a
City's Urban Growth Area
PASSED BY THE CITY OF BAINBRIDGE ISLAND CITY COUNCIL
this 14th day of November 2001.
APPROVED BY THE CITY OF BAINBRIDGE ISLAND MAYOR
this 15th day of November : .,2001.
Dwigl~ SuttSn; ~
Attest:
City Clerk
Appro¥~ as ~o F/orrn:
Rod ]b.'t~aseg~a - -
City Attorney
8
Interlocal Agreement Between Kitsap County and the City of
Bainbridge Island, City of Bremerton, City of Port Orchard and
City of Poulsbo Concerning Revenue Sharing Upon Annexation
and In Conjunction With Major Land Use Decisions Within a
City's Urban Growth Area
PASSED BY THE CITY OF BREMERTON CITY COUNCIL
this ~ day of ,~F.~,~t,~z~ , 2001.
APPROVED BY THE CITY OF BREMERTON MAYOR
this /~.,l~ day ofa~,m~_,~' , 2001.
Lynn S. Horton, Mayor
Attest:
Kfithl~en Mc~
City Clerk
Approved as t~.'
Loren D. Combs
City Attorney
9
DATED this 10t~ day of December ,200 1
Leslie J. Weatherill, Mayor
Attest:
City Clerk
Approved as to ~.qrrn:. ./v
Loren D. (~mbs c'
City Attorney
Interlocal Agreement Between Kitsap County and the City of
Bainbridge Island, City of Bremerton, City of Port Orchard and
City of Poulsbo Concerning Revenue Sharing Upon Annexation
and In Conjunction With Major Land Use Decisions Within a
City's Urban Growth Area
PASSED BY THE CITY OF POULSBO CITY COUNCIL
this ~ ~ day of~.lzirc~, 2001.
APPROVED BY THE CITY OF POULSBO MAYOR
this It'~-- dayof~, 2001.
Donna Je~ Brace, Mayor
Attest:
Karol ~ones
City Clerk
Approved as to Form:
James Haney
City Attorney
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