The city of Port Townsend and East Jefferson Fire Rescue are working to craft a ballot measure that would ask eligible voters to approve annexation of city residents into a junior taxing district that would fund fire and emergency medical services.

Annexation would provide greater taxpayer representation and transparency, city and fire officials said.

“Regarding representation, I think that is one of the big key benefits of annexation,” said Bill Beezley, East Jefferson Fire Rescue public information officer. “For the first time, city residents would have the ability to vote for the level of fire and EMS services that are provided to them.”

Currently, city council members sit on a joint fire board in an advisory capacity but without  voting power, Beezley said.

“They don’t actually have a voting say,” he said. “This would rectify that issue. We are committed to having at least two fire commissioners from the city geographic area as well as two from the district, and one that would straddle the area. They would be equal in size as far as number of people in each district.”

The city has requested to be annexed into the existing East Jefferson County Fire Protection District 1, with a ballot measure set for a vote Feb. 12. Both city residents and those in Fire District 1 would have to vote in favor with a simple majority for the annexation to be passed.

If passed, taxing authority would shift in 2020.

Annexation has been in the works since at least 2011, Port Townsend City Manager David Timmons said.

“I think the city has been behind it since its inception,” he said.

PASSING THE BATON

In 2004, the city began a process to consolidate the former Port Townsend Fire Department with EJFR, a fact sheet issued by EJFR states.

“We got together to start those discussions back then to merge fire services (so) it would be governed more specifically to its intended purpose by elected commissioners,” Timmons said.

In January 2007, both entities entered into an interlocal agreement in which EJFR would provide fire and emergency services to city residents. At that time, the PTFD was dissolved.

“When the city was trying to do it on its own, there was no way that the fire service could be sustained on the city’s tax base alone,” Timmons said. “It needed to expand the tax base to do it. Basically, that is kind of the trend around here in the state, the mergers of these departments.”

The interlocal agreement originally was intended to be short term as the city was annexed, Timmons said.

“We worked out the details administratively on how to make it happen,” he said. “The formal annexation would complete that task.”

But annexation got pushed further down the road by the financial effects of the great recession, Timmons said.

“The problem we ran into was the equalization that occurs when you take the two taxing districts and merge them into one,” he said. “The recession really tripped us up because it put us way out of sync with one another. It gets it to now, where it is getting to the point where we have an equalized tax base between the two jurisdictions. Now is the time to do it.”

For county residents, there would be no change in taxes or services, Beezley said.

“For district residents, it is business as usual,” he said.

POTENTIAL DOUBLE TAX

If voters approve the measure, there is a possibility city residents would face increased property taxes, Timmons said.

“First, there will be an increase that will benefit the fire district only,” he said. “This is a result of the two current taxing districts becoming one and the current tax rate of the district being applied to the city. This is an equalization adjustment that city residents will be assessed to be on par with (existing) district residents.”

A second potential cause of increased taxation would be the city’s existing property tax that supports fire and EMS services currently contracted to EJFR.

“The city pays for fire services to the district in two ways,” Timmons said. “A general property tax levy of $908,000 a year and a special purpose property tax levy. Following approval of the annexation, the special purpose levy will go away, but the city’s general property tax authority is retained.”

The city would still have the authority to collect the general property tax levy, Timmons said.  

“The $908,000 we are talking about, that some could refer to as double taxation, the authority to levy that still remains in effect,” he said.

Nora Mitchell, city finance and administrative services director, said staff has worked to mitigate the potential for a double tax, or to at least accept public input before the city decides to assess the tax.

“I think David and the council have proposed a process where (residents) would go each year and talk about what that funding would be used for, and that it would be a public process where people would come back and comment,” she said. “The council could choose whether they could levy or not.”

Whether the council chooses to do that or not is up to them, Timmons said.

“The city council has put in place a means to limit its authority to levy this property tax authorization for a period of five years,” he said. “The city will not assess any of the $908,000 increase in 2020.”

If the annexation measure passes, the city council would be penalized for collecting taxes via the general property tax for the first 12 months after annexation goes into effect, Timmons said.

“For the first year, none of it will be levied,” he said. “If any of it is levied, then there is a penalty payment for that same amount to the fire district.”

From 2021 through 2024, the council would have limited authority as provided for by policy, which requires any amount of the $908,000 be phased in at a rate not to exceed 33 percent per year, Timmons said. Further, it restricts funds for capital projects such as roads, housing infrastructure or parks.

However, the city council could vote not to assess any of the tax, Timmons said.

The city has bee collecting voter input on the issue, Timmons said.

“We previously held four town meetings and the district and city are making the rounds to organizations in and around the city and district,” he said.  “We have not scheduled any additional public comment sessions.”