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i Bellingham Airport Annexation Study Final Report Prepared for the City of Bellingham by: 2707 Colby Avenue, Suite 900 Everett, WA 98201 Ph. 425-252-7700

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i

Bellingham Airport

Annexation Study

Final Report

Prepared for the City of Bellingham by:

2707 Colby Avenue, Suite 900

Everett, WA 98201

Ph. 425-252-7700

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TABLE OF CONTENTS

CHAPTER 1 – INTRODUCTION .............................................................................................................. 1

1.1 PURPOSE ..................................................................................................................................... 1 1.2 BACKGROUND ............................................................................................................................. 1

CHAPTER 2 – METHODOLOGY AND ANALYSIS .............................................................................. 5

2.1 METHODOLOGY .......................................................................................................................... 5 2.2 JURISDICTIONAL CHANGE CHALLENGES .................................................................................. 9

CHAPTER 3 – TECHNICAL ANALYSIS MEMORANDUM SUMMARIES .....................................11

3.1 ZONING ISSUES ..........................................................................................................................11 3.2 CAPITAL FACILITIES ISSUES .....................................................................................................13 3.3 POLICE AND FIRE SERVICE ISSUES ...........................................................................................25 3.4 ANNEXATION ISSUES .................................................................................................................27

CHAPTER 4 CONCLUSIONS & RECOMMENDATIONS .............................................................29

4.1 RANGE OF ANNEXATION ALTERNATIVES .................................................................................29 4.2 INTERAGENCY AGREEMENT ISSUES .........................................................................................29

EXHIBITS

EXHIBIT 1: ANNEXATION AREA AND ALTERNATIVES ..................................................................................... 3 EXHIBIT 2: FISCAL IMPACTS AND SHIFTS DUE TO ANNEXATION OF AIRPORT AREA (COST / BENEFIT) –

NUMBER ESTIMATES ..................................................................................................................... 7 EXHIBIT 3: TIMING AND PHASING MATRIX ..................................................................................................... 8 EXHIBIT 4: EXISTING WHATCOM COUNTY ZONING .......................................................................................12 EXHIBIT 5: ROAD TYPES ................................................................................................................................14 EXHIBIT 6: SUBSTANDARD ROADS ................................................................................................................15 EXHIBIT 7: ROADS BY OWNER .......................................................................................................................16 EXHIBIT 8: SEWER OVERVIEW .......................................................................................................................18 EXHIBIT 9: EXISTING SEWERS AREA .............................................................................................................19 EXHIBIT 10: WATER MAIN OVERVIEW ..........................................................................................................20 EXHIBIT 11: WATER MAINED AREAS ............................................................................................................21 EXHIBIT 12: STORMWATER MANAGEMENT SYSTEMS ....................................................................................22 EXHIBIT 13: HYDRANTED AREAS ..................................................................................................................23 EXHIBIT 14: FIBER OPTIC L INES ....................................................................................................................24 EXHIBIT 15: NEXT STEPS IN ANNEXATION PROCESS .....................................................................................31

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APPENDICES

Appendix A: COB Annexation Financial Analysis Appendix B: The annexation policies of the Bellingham Comprehensive Plan,

Whatcom County Comprehensive Plan and the Countywide Planning Policies

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Bellingham Airport Annexation Acronyms AASHTO – American Association of State Highway Transportation Officials ADT – Average Daily Traffic AMP – Airport Master Plan AO – Airport Operations (Whatcom County Zoning District) ATB – Asphaltic Treated Base B&O – Business and Occupation (Optional Tax) BLI – Bellingham International Airport BMC – Bellingham Municipal Code BRB – Whatcom County Boundary Review Board C – Commercial (Bellingham Zoning District) CFP – Capital Facilities Plan (also CIP – Capital Improvements Program) COB – City of Bellingham CWPP – Whatcom County County-Wide Planning Policy DU – Dwelling Unit (one residential housing unit) FAA – Federal Aviation Administration FAR – Federal Aviation Regulation FD#8 – Whatcom County Fire District No. 8 GC – Gateway Commercial (Whatcom County Zoning District) GIS – Geographic Information System GPS – Geographic Positioning System GMA – Growth Management Act I – Industrial (Bellingham Zoning District) I-5 – Interstate 5 (US Interstate Freeway) IAA – Inter-Agency Agreement IFR – Noise Abatement Procedure ILA – Inter-Local Agreement LI – Light Industrial (Bellingham Zoning District) LID – Local Improvement District LII – Light Impact Industrial (Whatcom County Zoning District) LOS – Level of Service NCP – Noise Compatibility Program NFPA – National Fire Prevention Association OFM – Washington State Office of Fiscal Management POB – Port of Bellingham UGA – Urban Growth Area UR – Urban Residential (Whatcom County Zoning District) UR-3 – Urban Residential 3 (Whatcom County Zoning District) URMX – Urban Residential Mixed (Whatcom County Zoning District) VFR – Noise Abatement Procedure WCC – Whatcom County Code WCSO – Whatcom County Sheriff’s Office WSP – Washington State Patrol

Bellingham Airport Annexation Study Final Report 1

Chapter 1 – Introduction 1.1 Purpose

The purpose of the Bellingham Airport Annexation Study is to identify the issues that will need to be addressed in an interagency agreement between the City of Bellingham and the Port of Bellingham as a result of future annexation. City and the Port staff worked with the consultant to provide data, policy, and operations information that could be used to determine these issues related to annexation, which has been planned since the Bellingham International Airport was included in the Bellingham Urban Growth Area (UGA) nearly fifteen years ago. The provision of urban services has been planned for the UGA within a 20-year planning horizon that is rapidly approaching. While the major concerns may be focused on financial impacts, challenges that require planning for operational changes and capital planning, as well as new policy needs, are also included. It is the intention of the Port and the City to determine whether or not it is in each jurisdictions best interest to enter into an Interagency Agreement that will address specific challenges that an annexation of the study area would bring. It should be noted that the financial analysis (costs vs. revenues) was done by City staff using the established annexation financial model. The conclusions and recommendations in this report rely primarily on the Growth Management Act goals, the City and County comprehensive plans goals and policies, and the 1997 City/County Interlocal Agreement Concerning Growth and Annexation in Bellingham’s Urban Growth Areas. It was understood that City staff would be primarily responsible for addressing the financial implications of the various annexation alternatives. 1.2 Background

The City of Bellingham and Whatcom County first established an “Urban Service Area” in the mid-1980s that included the Airport Annexation Study Area property. Over the years, the City has approved utility extensions in portions of the study area, and this has allowed urban levels of development to occur around the airport. The Alderwood Neighborhood is another example of an urban area developed outside the city limits using city water and sewer services. The City and County first established Bellingham’s Urban Growth Area under the 1990 Growth Management Act (GMA) in 1997. The original UGA included the Airport Study Area property. GMA planning requirements included providing a buildable land supply for the projected population and employment growth that would take place from 1995 to 2015 based on estimates made by the State Office of Financial Management. Now thirteen years later, much of that projected growth has occurred and the area within the initial UGA boundaries requires the provision of services, which in this case will necessitate greater expansion of the City’s service capacity, particularly for police and fire services. Earlier service capacity plans for police and fire services have been exceeded by the growth that has already occurred throughout the City and other parts of the UGA.

Bellingham Airport Annexation Study Final Report 2

The County updated Bellingham’s UGA boundaries in 2007. Once again, the Airport Study area was included in the City’s UGA. The Bellingham Airport Annexation Study Area, illustrated in Exhibit 1 , consists of at least three definable areas:

• The commercial and industrial area between I-5 and the Bellingham International Airport property and facilities

• The Bellingham International Airport (property inside a security fence) and

adjacent industrial zoned areas to the west and north

• The existing residential neighborhoods (Alderwood and Bennett) southeast of the Airport

These three areas of the UGA plus the other portions of the study area contain a total of almost 3,000 acres. (For comparison purposes, the current city of Bellingham consists of about 16,500 acres and the entire Bellingham UGA includes about 7,500 acres.) The Airport Annexation Study Area, while having different land uses, comprises a single geographic area that is adjacent to the City limits and is characterized by existing urban development and urban services in portions of the study area.

Bellingham Airport Annexation Study Final Report 3

Exhibit 1: Annexation Study Area and Alternatives

Bellingham Airport Annexation Study Final Report 4

The City and the Port have been engaged in planning discussions that have focused on economic development interests, particularly providing urban services for the creation of new family-wage jobs that are needed to replace traditional resource-based industry employment. Both jurisdictions have discussed the future of the airport and adjacent areas a number of times since the area was first placed in Bellingham’s UGA in 1997. More recently, these discussions have focused on when annexation should occur and under what circumstances. The City of Bellingham commissioned this study primarily to identify the issues associated with annexing the airport and adjacent properties. The annexation process raises a number of issues to be considered by the City (and property owners) prior to making a decision on annexation. This study should provide much of the background information needed for the City Council to determine if annexation of the study area is in the City’s best interests. The financial impacts of annexation were outside the scope of the consultant’s work. That analysis was done by City staff using an established forecasting model. The Port of Bellingham interests include economic development and the long term viability of the airport. To address these interests, the Port would like additional access to City water and sewer facilities, and police and fire services. 1.3 The Study Area

The Airport Annexation Study Area (see Exhibit 1) includes about 3,000 acres broken down by ownership as follows: Port of Bellingham Land = 1,081 acres Private Land = 1,028 acres State of Washington Land = 172 acres Whatcom County Land = 31 acres Bellingham School District Land = 11 acres City of Bellingham Land = 10 acres Water area = 377 acres Rights-of-Way = 250 acres Totals Area = 2,960 acres The study area includes:

• the Bellingham International Airport and adjacent Port-owned properties • the Curtis Road and Wynn Road industrial zoned areas • the I-5/Bakerview Interchange property that is the subject of a current annexation

petition (the “Garrett Property”) • the Bennett Drive and Alderwood neighborhoods, and Alderwood Elementary

School • Fire District #8 stations 1 and 4 • Little Squalicum Creek Park and Beach property • Marine Drive industrial area

Bellingham Airport Annexation Study Final Report 5

Chapter 2 – Methodology and Analysis 2.1 Methodology

The issues analysis was conducted primarily using relevant City and County comprehensive plan goals and policies, the goals of the State Growth Management Act, and the 1997 City/County Interlocal Agreement Concerning Growth and Annexation in Bellingham’s Urban Growth Areas. Analysis of specific costs to taxpayers and tax revenues due to jurisdictional changes was provided by City and by the Port staff. The matrix of specific tax cost and revenue changes is included in Exhibit 2. City staff completed a Financial Impact Summary that includes an estimate of possible financial impacts of the annexation alternatives on the City (see Appendix A at the end of this report). A number of conclusions can be drawn from the financial analyses. For property owners in the annexation area, the balance of tax increases and rate decreases reduces the impacts of annexation on the owners while the level of urban services they can expect will increase. While Whatcom County will experience a decrease in tax revenue, the County’s Sheriff’s Office will come closer to the County’s adopted level-of-service Standard for deputies with its existing forces being deployed elsewhere in the County if the study area is annexed to Bellingham. Annexation of the study area will have significant impacts on Fire District #8 and Water District #2. Lastly, depending on the annexation alternative chosen, there are serious financial challenges for City government, primarily due to the impact of annexation on the Bellingham Fire Department and on the Bellingham Police Department and associated legal and court services (see Appendix A). Analysis of annexation alternatives was provided by Perteet staff Brad Collins and Justin Lacson. The matrix of seven alternative annexation scenarios shown in Exhibit 3 compares each alternative to a set of eight criteria for measuring the impact of an alternative annexation area or phased annexation on the objectives for planned development under the City’s Comprehensive Plan goals and policies. The conclusions drawn from this analysis recognize that short and long term economic interests and increased costs will favor or disfavor various stakeholders in the annexation process. The following public officials provided relevant and detailed information that contributed to this report:

• Chief Bill Boyd, Bellingham Fire Department • Chief Dean Whitney, Whatcom County Fire District No.8 • Chief Randy Carroll, Bellingham Police Department • Chief Todd Ramsey, Bellingham Police Department • Tim Stewart, Bellingham Planning & Community Development Director • Sheriff Bill Elfo, Whatcom County Sheriff’s Office • Deputy Chief David Doll, Bellingham Police Department • Aviation Director Art Choat, Port of Bellingham • Port Attorney Frank Chmelik, Chmelik, Sitkin, & Davis

Bellingham Airport Annexation Study Final Report 6

• Director of Planning & Development Sylvia Goodwin, Port of Bellingham • Economic Development Specialist Dodd Snodgrass, Port of Bellingham • Assistant City Attorney Les Reardanz, Bellingham City Attorney’s Office • Asst. Bellingham Public Works Director Rory Routhe • Bellingham Public Works Development Manager Brent Baldwin • Bellingham GIS Analyst Chris Behee • Bellingham Senior Planner Greg Aucutt • Financial Analyst Brian Henshaw, Bellingham Finance Department

Bellingham Airport Annexation Study Final Report 7

Exhibit 2: Fiscal Impacts on Port Tenants and Shifts due to Annexation of Airport area (Cost / Benefit) – Number Estimates

Fiscal Effect from Annexation Impacts: Businesses City County Port FD #8

City B&O tax 0.17% mfting and trades 0.44% services on gross income

Increase in tax burden for business activity that occurs in city limits. Note change in law.*

33% increase in B&O tax burden for businesses fully

impacted. Most will not have this amount of increase

Revenue Increase

NA NA NA

Property Tax (2007) $10.5572 county versus $9.8431 city per $1000

Reduced tax impact within city limits (overall 4% reduction)

$4,500 $26,000 $19,500 NA $11,000

City Water/Sewer Surcharge 50% rate addition to county UGA customers

33% decrease in bills 33% decrease

Revenue decrease

NA $9,000 NA

City Utility Fees 6% gas, phone, electricity 11.5% garbage

Same increase to utility bills of customers 6%+ increase

Revenue Increase

NA $4,000 Increase (as a customer)

City Stormwater Fee Rates range based on size of impervious area. Largest areas pay $.028 per square foot annually.

Potentially large impact on property owners. Cost allocated to private

building footprint? Increased revenues

NA $155,000 NA

City Impact Fees Increases cost of development

Increased expense on new development

Revenue increase

NA Increased expense

on new development

NA

Local Lodging Tax None. Rates were equalized in city and county in 2007

NA 0 0 NA NA

Local Sales Tax Distribution County area allocated .1485% of all city revenues.

NA Increase= Decrease NA NA

Leasehold Tax Distribution

City will be allocated 15.5% additional that had gone to county from Port tenants

NA $25,000 $25,000 NA NA

Bellingham Airport Annexation Study Final Report 8

Exhibit 3: ANNEXATION ALTERNATIVES - TIMING AND PHASING MAT RIX Annexation Alternatives Planned Growth Econ. Development Quality of Life Government Transfer Limited Resources Investment Equity Increased Costs Development Delays

Alternative 1 - No Annexation Con – no urban services provided to the area Con - delay development Pro - no change

Con/Pro – maintain existing conditions w/o urban services & facilities Pro - low cost impact

Pro - no changes in equity positions Pro - no change Con - delay dev.

Con – no contributions to City tax base, impact fees, etc.

Con - no contributions to City tax base, no impact fees to provide facilities Con – delay plans

Pro - low cost impact to City

Con – does not address Port & City concerns

Con - delay econ development & jobs

Con - delay adopted plan implementation

Con - delay long term investments

Con - no increase in tax base & jobs Con - delay investments

Alternative 2 – Annex only Current Petition at I-5/Bakerview

Con – no urban services planning

Pro - facilitate petitioner development Pro - small change

Pro - gradual change in jurisdiction Pro - low cost impact

Pro - gradual change in equity positions Pro - gradual change Con – delay area dev.

Pro - some revenues to City Development built to City standards.

Con – no urban services planning Con - delay plans

Pro - facilitate petitioner development

Con – limited development potential

Con – delay long term economic development

Con - delay planning for urban services

Pro - gradual change in jurisdiction

Con – delay long term investment Con - must annex again

Pro - facilitate petition & development

Alternative 3- Annex Everything Up to Airport Security Fence Con – only sewer planning

Pro - facilitate more commercial development Pro - small change

Pro - gradual change in jurisdiction Pro - low cost impact

Pro - gradual change in equity positions Pro - gradual change Con - delay petition

Con – only sewer planning

Pro – facilitate more commercial development

Con – limited Airport development

Con – delay Airport & private development

Con - delay planning for urban services

Pro - gradual change in jurisdiction

Con - delay long term investment Con - must annex again

Pro - facilitate short term Airport dev.

Alternative 4 - Annex Everything Up To and Including Area Inside Airport Security Fence Con – conflict w/ILA Con – conflict w/ILA Con – conflict w/ILA Con – conflict w/ILA Con – conflict w/ILA Con – conflict w/ ILA Con – conflict w/ILA Con – conflict w/ILA

Con - delay planning Pro - low cost impact

Pro - facilitate Airport & private development

Pro - facilitate Airport & private development

Pro - no residential neighborhood change Pro – City/Port partnership

Pro - faster change in jurisdiction

Pro - gradual change in equity positions

Pro - gradual change

Pro - facilitate long term Airport development

Alternative 5 – Annex Entire Airport Study Area Now Pro – implement GMA plans Con - limited City funds

Pro - improved public facilities & services Pro – public/private partnerships Con - limited City funds

Con – rapid change in equity positions Con - rapid change

Pro - facilitate area development

Con – impact police LOS Citywide

Pro - strong indicator of public support Pro - starts CFP process Con - no transition time

Con – impact police LOS Citywide Con - limited City funds

Con – impact police LOS City-wide Con - limited City funds

Alternative 6 – Annex Entire Airport Study Area After a Pro – implement GMA plans

Pro - strong plan for public support

Pro - improved public services & facilities Pro – public/private partnerships

Pro - time to budget for police/fire services

Pro – partnerships for mutual infrastructure

Pro – time to budget for police/fire services

Pro - facilitate area development

2-Year Transition Period

Con - delay development Con - delay economic development Pro - starts CFP process Con – election method

Pro - support public safety & health standards

Con – rapid change in equity positions

Pro - implement GMA plan Pro - transition funds

Alternative 7 – Annex Entire Airport Study Area After a Pro-implement GMA plans

Pro-strong plan for long term econ dev.

Con - delay improved services & facilities Pro – public/private partnerships

Pro - time to plan for new public funds

Pro – time to plan for new equity positions

Pro – time to plan for increased costs

Pro - facilitate area development

5-Year Transition Period

Con long delay for development

Con- long delay for econ. development

Pro - starts planning

Con – long delay for development

Con – long delay for development

Con – long delay for development

Pro – implement GMA plans

Con – long delay for development

Bellingham Airport Annexation Study Final Report 9

When reviewing City and County comprehensive plan goals and policies, the alternative that is most realistic – taking into account the economic development benefits of both short and long term investments by both the private and the public sectors – is determined to be Alternative 6, Airport Study Area Annexation over a 2-year transition period. On balance, this alternative addresses a number of long-term land use and economic interests of the City as expressed in the 2006 comprehensive plan. The airport and surrounding properties can be a significant economic driver. Development of the area will occur with or without annexation. The question for the City to answer is, would it be in the City’s best interest to have that development occur in the city or in the county? While other alternatives listed here maximize certain pros or minimize specific cons, none seems to more effectively balance the pros and cons to facilitate a smooth transition in implementing adopted plans/policies for the Bellingham UGA. This alternative does present financial challenges for the City of Bellingham that will need to be resolved in order for this alternative to be judged as being in the best long-term interest of the City. 2.2 Jurisdictional Change Challenges

At the beginning of this annexation study, several obvious tax implications seemed paramount to crafting an interagency agreement between the Port and the City. The application of the City’s Business & Occupation Tax to existing businesses in the Airport Industrial Park and to marketing for new businesses appeared to be a significant hurdle for the Port of Bellingham to overcome. However, as the financial analysis came together the anticipated financial impacts to individual businesses did not take on the magnitude of costs that may have been expected. Some tax increases were offset by rate decreases, and other tax increases were only partially applied as new costs. While there will be tax consequences to residents, business owners, Whatcom County, Fire District No. 8, and Water District #2, they are in the realm of what should have been anticipated since the UGA was first established over 10 years ago in 1997. The impacts on the Port and the City are now seen as the costs of taking urban and economic development to the needed level of service delivery required for the planned growth that can be approved in the next ten years. This is assuming the annexation process, the capital improvement planning, and the police and fire service gearing up and down in respective jurisdictions can reasonably take place over the next two years. The property owners at the I-5/Bakerview Interchange who have already petitioned the City for annexation will be delayed slightly under the recommended alternative, but it is difficult to project how the City could reasonably provide the necessary urban services to this area in a shorter timeframe. Interestingly, annexation creates challenges for both the City and the Port. Airport operational requirements for such concerns as fire crash rescue, terminal security and snow plowing streets to maintain access to the Airport will need to be resolved. While there are other operational requirements for the Port and the City to incorporate into the labor and budget schedules, the 2-year transition period under Alternative 6 should allow for those changes to be made once the course of annexation and its phasing has been made clear.

Bellingham Airport Annexation Study Final Report 10

Even after annexation, the City may choose to contract with the Port or the County to meet some operational needs such as snow plowing instead of retooling the City’s approach to a particular service requirement. Similarly, the Port may find it preferable to continue to contract with the Washington State Patrol for Homeland Security public safety services. Again as with the financial impacts, the operational requirements seem surmountable, particularly with a 2-year transition period to work out the details of service provisions and costs. As the challenges regarding financial impacts and operational requirements became better known, potential solutions to those challenges were determined to be found to be more workable than perhaps first thought. Consequently, the biggest challenges now may involve long-term and short-term development concerns of the Port and the petitioning property owners. Establishing land use policies that recognize the airport as an essential public facility, balancing the need for future commercial and residential development and the FAA regulations of the third largest commercial airport in the State of Washington have taken on greater importance for the Port and the City. Annexation will likely bring out conflicts between the long term and short term interests of all the stakeholders and encourage development of land use planning policies that have not taken place while the airport has been outside the City’s jurisdiction. Solving the short term development interests of property owners who desire development now and the long term operational interests of a growing commercial airport should not wait until the conflicts become more difficult and planned resolutions less politically acceptable to one side or the other. Therefore, land use policies for urban development of the surrounding area and future airport operations should not wait any longer and can be facilitated by annexation, thus requiring the Port and the City to plan together rather than separately. Considerable common ground in economic development interests can serve the Port and the City in reaching an interagency agreement. The City and the Port must work together to plan for the needed services required for economic development. The services must pay for themselves through the process of this economic development. Determining the types and intensity of land uses provides the baseline for the capital improvements planning that will be needed to serve the planned development. Under GMA, the responsibility to develop a Capital Facilities Plan for the Urban Growth Area must be met and updated as new service capacity becomes needed in the adopted UGA. It makes sense for this planning work to be done by the City. For all these reasons, Alternative 6 – annexing the entire Airport Study Area over a 2-year transition period – should be strongly considered by the City and the Port.

Bellingham Airport Annexation Study Final Report 11

Chapter 3 – Technical Analysis Summary A series of background memos were prepared in the process of developing this report. They review the following areas:

• Task Memo 1: Timing and Phasing Memorandum • Task Memo 2: Financial Analysis • Task Memo 3: Development Standards • Task Memo 4: Airport Annexation Area Zoning • Task Memo 5: Infrastructure Transfers • Task Memo 6: Police & Fire Services

A number of technical issues were identified and are discussed in detail in this report. The most significant issue identified is the implications for future costs to the City to improve the infrastructure and provide the full range of urban services in the study area.

The presence of urban services either in or adjacent to the annexation areas makes the provision of facilities and services much less difficult to plan and ultimately to pay for them. Issues with system capacities for City services were identified, as were budget constraints. The details with respect to existing land use (zoning) designations, water, sewer, streets, fire and police facilities are shown on maps later in this report. (See Exhibits 4-14). 3.1 Zoning Issues

If the airport property is annexed as in Alternatives 4-7, amendments to the Bellingham Municipal Code will need to consider integrating an airport operations zoning designation(s) to support airport uses as the City does not currently have a comparable zone. Adopting a similar version of Whatcom County’s Airport Operations (AO) zone into the City of Bellingham Code will require identification of specific uses that would be located near the Airport. In addition to the AO zone, incorporation of airport policies into the land use element of the Bellingham Comprehensive Plan will be needed to guide future growth of the airport and supporting services. It will be easier to designate industrial, commercial, and residential land uses with City zoning since there are current City zones that are more compatible with these current County zones or desired zoning changes for economic development.

Bellingham Airport Annexation Study Final Report 12

Exhibit 4: Current Whatcom County Zoning

Bellingham Airport Annexation Study Final Report 13

3.2 Capital Facilities Issues Streets

The City of Bellingham has five different road types, while Whatcom County has six types. (See table, Exhibit 5) Whatcom County has additional rural road types that are not discussed here, as they would not apply to the annexation area. The Whatcom County standards for principal arterials and minor arterials are more flexible than the City standards. The County standards for collector arterials and neighborhood collectors require less roadway width than the City standards. Collector arterials would need to be widened by up to eight feet to meet the City standards. If on-street parking is accommodated on these streets, then it is unlikely that the right-of-way width could be brought into compliance with the City standards. Depending on how the City would designate collector arterials in the annexation area, this could be costly to upgrade. In addition, some roads may be over the maximum grade allowed under the City standards; this would also be difficult and costly to bring into compliance with the City standards. The City of Bellingham and Whatcom County each have similar commercial and industrial street standards. The County standards for local access streets and the City requirements for residential access streets are also similar. However, there is a slight difference in the right-of-way width for through streets, travel lane width (twelve feet in the County versus eleven feet in the City) and parking lane width. The GIS analysis of street infrastructure identified a number of streets in the study area as substandard. (See map, Exhibit 6) Improvements of streets to meet the City’s standards would also likely require additional street frontage improvements such as sidewalks, perhaps making any street improvements too costly, except where and when substantial redevelopment is taking place. If street improvements become a priority for local residents, the City’s General Fund could be utilized to pay for new streets, but use of a local improvement district (LID) funding mechanism would be the norm. Because development has already occurred in the annexation residential areas, there are no obligations to include improvements to existing residential streets in the Capital Facilities Plan. A more significant issue with regard to the transportation system is the capacity of the I-5/Bakerview overpass. This road section is operating at a low level of service now and capacity improvements are needed whether or not any of the Airport Study Area is annexed. Annexation and development in the study are may speed up the need for the improvements, but it would also allow the City to collect impact fees to help pay for the project. The estimated cost to fix the overpass is 30 million dollars. The State and private development should also contribute to the cost of the improvements.

Bellingham Airport Annexation Study Final Report 14

Exhibit 5: Road Types

Road Types Whatcom County City of Bellingham Principal Arterial Flexible Roadway Widths Minimum Street Widths Minor/Secondary Arterial Flexible Roadway Widths Minimum Street Widths Collector Arterial Less Roadway Widths 8-Ft Wider Street Widths Neighborhood Collector Less Roadway Widths 8-Ft Wider Street Widths Local/Residential Access Minimum Roadway

Widths Flexible Street Widths

Commercial/Industrial St. Special Roadway Widths Defined in BMC 13.04 Cul-de-sac Bigger Bulbs/Lengths Not Defined by # of Trips Intersection Sharper Angles & Offsets 70-90 Degree Angels Driveway Width Not Listed Minimum/Maximum

Width Driveway-Intersection 60-120 Ft Separation Not Listed Driveway-Driveway Not Listed 200 Ft Separation -

Arterials Curb Radii 25-35 Feet 50-80 Feet Surfacing 2.5 Inch Minimum 2.5-4 Inch Minimum Sight Distance Longer for Intersections &

Driveways Shorter for Driveways Only

Bellingham Airport Annexation Study Final Report 15

Exhibit 6: Substandard Roads

Bellingham Airport Annexation Study Final Report 16

Exhibit 7: Roads by Owner

Bellingham Airport Annexation Study Final Report 17

Water

The City of Bellingham already provides water service to a portion of the annexation study area. All development that has water service from the City must meet City development standards. Water District #2 also provides service to about 500 acres in the study area, primarily properties along Marine Drive (see Map 7). The Airport Annexation study area includes about 32% of the District’s 1,530-acre service area. No upgrades to the water system will be necessary beyond what would be required anywhere that the City provides services. Sanitary Sewer

The City of Bellingham provides sewer service to the entire annexation study area (see Map 6). However, some parts of the annexation study area do not currently have sewer service. All future development that uses sewer service must meet all City development and improvement standards. The City may be requested by residents of existing un-sewered areas to install sewer systems. Stormwater The existing stormwater system will only be upgraded to meet City standards if future development exceeds the thresholds set out by the City. For the Port property, development that meets the Port’s stormwater management plan will likely also meet the City’s standards. Transition of Jurisdiction

A significant part of every annexation is the transition of services and capital facilities from another jurisdiction to the City. Whether it is a special purpose water or fire district or the County, these transfers have associated financial impacts. Because the City already provides the sewer services in the study area, the transition for infrastructure improvements requires few jurisdictional changes and relates more to improvements that will be necessary to bring capital facilities up to standards. The exception is water service. Water District #2 will lose 32% of its service area and 46% of the total assessed value of properties in its service area if the entire study area is annexed to the City. This issue will need further discussions with regard to the impacts on District #2 should the City decide to annex the Marine Drive portion of the study area.

Bellingham Airport Annexation Study Final Report 18

Exhibit 8: Sewer Overview

Bellingham Airport Annexation Study Final Report 19

Exhibit 9: Existing Sewers Area

Bellingham Airport Annexation Study Final Report 20

Exhibit 10: Water Main Overview

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Exhibit 11: Water Mained Areas

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Exhibit 12: Stormwater Management Systems

Bellingham Airport Annexation Study Final Report 23

Exhibit 13: Fire Hydrants Areas

Bellingham Airport Annexation Study Final Report 24

Exhibit 14: Fiber Optic Lines

Bellingham Airport Annexation Study Final Report 25

3.3 Police and Fire Service Issues Police Services

Annexation of the entire study area will exceed the short term service capacities for City police services. The annexation of the Alderwood Neighborhood is anticipated by the Police Department, in particular, to have a more significant increase in call volumes, thus creating a greater effect on City-wide level of service (Police LOS is measured by call volumes). It should be noted that the Whatcom County Sheriff Office provides calls for service standards dramatically different than those provided by the City Police Department, since the calls for service within the County are handled and recorded in a different manner than in the City. The Whatcom County Sheriff’s Office will not be affected since the number of deputies is currently below the adopted LOS standards for police services in the County. In determining appropriate level of service standards, the Bellingham Police Department uses a call volume standard of 1 patrol officer per 750 calls for service per year, which was an ICMA law enforcement standard for urban areas. The BPD has a separate standard of 1 investigative officer per 10 patrol officers as well. Both Departments are concerned about providing adequate services in the event that an annexation that includes the entire study area.

The Bellingham Police Department identified annexation of the Study Area as significant issue that could leave existing areas of the City below current performance standards based on their analyses of estimated service requests. Annexing this area would require an increase in staffing as shown in the Financial Impact Summary. Fire/EMS Services

The Airport Annexation study area includes property now served by Fire District #8. In 1997, the City and Fire Districts 2, 4 and 8 entered into an interlocal agreement that requires a “mitigation agreement” whenever the City proposes to annex property that includes more than 5% of the total assessed value of property in the District’s service area. Annexation of the entire Airport Study Area will have a significant impact both on the BFD and Fire District No. 8. The study area includes property with about 44% of the total assessed value of District 8. Also, other annexations since 1994 (the “base year” in the interlocal agreement) have reduced District revenues. If the City were to annex the entire Study Area, the District will have lost property representing approximately 51% of total assessed value of the service area since 1994. The City and the District will need to address these issues through a “mitigation agreement” as provided for in the Interlocal Agreement. Also, if Bennett Road Fire Station property is annexed, the District will need to relocate the station.

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The Bellingham Fire Department uses an NFPA standard for per capita/firefighters in its annual budget as a performance standard. Although the impacts of annexation on the BFD LOS will result more slowly as new development occurs, personnel needed to maintain current Fire LOS will require budget increases commensurate with revenue increases that may be expected due to annexation over a three year period after annexation. The BFD also identified the potential annexation of the airport proper (inside the fence) and the property on the north (Wynn Road area) and west side of the Airport (Curtis Road area) as especially troublesome. The department estimates that it could not meet adopted response times (4 minutes) to these areas without a new fire station. The attached financial analysis looks at the impact of a new station and associated equipment and personnel that would be needed if the Council decides to pursue annexation Alternatives 4, 5, 6 or 7. The impact is significant – an estimated 4.6 million in one-time costs for a new station and engine and 1.1 million ongoing costs for new personnel. Another option is to contract for these services with Fire District #8, but contracting raises other issues that may make this option difficult. Annexation also potentially raises contractual issues with the three separate union bargaining units: City Fire personnel, Fire District No. 8 paid firefighters and Port emergency fire suppression staff. Also, annexing the airport could potentially require City fire personnel to provide aircraft rescue and fire fighting services, requiring immediate training and additional resources/costs. The area along Marine Drive and west of the airport currently has no fire hydrants. Without this infrastructure in place, service by the BFD in these areas is problematic. Another issue that has come up is the Port’s plan to relocate and build a new fire station at the airport. Because of its location, this facility has little value to the BFD in terms of being able to serve areas beyond the airport from the new facility. All of the larger issues identified by Police and BFD depend on an annexation alternative (Alternatives 4-7) that includes the airport proper and the rest of the study area. The delayed annexation alternatives 6 and 7 were specifically designed to give time for Police and Fire to budget, hire, and train personnel who would be needed to maintain current service levels in the annexation area and throughout the rest of the City. The more incremental annexation alternatives (Alternatives 2 and 3) that involve commercial and industrial zoned properties near Bakerview and I-5 and that are outside/inside the security fence for the Bellingham International Airport would not trigger major issues requiring transfer of facilities, construction of new facilities or significant new personnel demands. Consequently, except for the issue of an election versus a petition method process in the large Airport study area annexation alternatives (Alternatives 5-7), maintaining Police and Fire Services at adopted LOS standards represent the most significant challenges for study area annexation to the City of Bellingham.

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3.4 Annexation Issues

Legal and other obligations of annexation rest primarily upon the City of Bellingham and were initiated by the adoption of Comprehensive Plan policies and the Urban Growth Area (UGA) boundary in compliance with the Growth Management Act. The City’s UGA included the airport area and the Alderwood/Bennett neighborhoods in urban land supply for the projected growth of the City to 2022. Reaching an Interagency agreement between the City and the Port is not a necessary requirement, but should facilitate the planning process as well as the annexation process. Other documents that provide the legal and policy framework for annexation into the City of Bellingham and also attached to this report are:

• Appendix A The City’s Annexation Financial Impact Summary • Appendix B – The annexation policies of the Bellingham Comprehensive Plan,

Whatcom County Comprehensive Plan and the Countywide Planning Policies Annexations are complicated processes involving many steps and a number of challenges. The annexation alternatives (see Exhibit 1) included in this report are:

• Alternative 1 - The no annexation alternative. • Alternative 2 – Annex only the 175-acre area at the west side of the I-5

Bakerview interchange (the “Garrett property”) that is the subject of an already submitted annexation petition.

• Alternative 3 - Annex the property in Alternative 2 plus the commercial and industrial zoned area outside the secured airport property and the Alderwood Neighborhood.

• Alternative 4 – Annex everything in Alternatives 2 and 3 plus the airport property inside the security fence.

• Alternative 5 – Annex the entire Airport Study Area immediately, with no transition period.

• Alternative 6 – Annex the entire Study Area after with a two-year transition/planning period.

• Alternative 7 – Annex the entire Study Area after a five-year transition/planning period.

Prior to GMA, annexations generally had no transition period. Specifically, the annexation was approved by the Council, then a Boundary Review Board review of petitions or an election was held, with a final approval by Boundary Review Board. The jurisdictional change took place quickly after the approval. Services needed to be provided the next day by the City and revenues could frequently lag behind expenditures up to a year. Since GMA, cities and counties have developed annexation ILA’s similar to the one between Bellingham and Whatcom County that lay out the processes for jurisdictional changes usually over a transition period, making the financial impacts more manageable to both the County and the City.

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An important issue in Alternatives 5-7 concerns the City’s policy regarding annexations by election versus petitions. Cities have traditionally favored petition-method annexations, because they are less time consuming and less costly. Alternatives 2-4 clearly can and should use the petition-method since the majority of property owners are not also resident voters. It is less clear about the number of resident voters and non-resident property owners in Alternatives 5-7, and the City should decide which annexation method would be preferable. The issue of election or petition annexation method should be carefully weighed and decided by the City Council, since the time and cost of election-method annexation is much greater and less clear in its outcome. Any of the Annexation Study Area Alternatives 4-7 may benefit from additional planning before the City Council makes a decision on allowing these larger annexations. Pre-annexation zoning and capital facilities planning is not a requirement of the annexation process but is recommended. The City is not obligated to go to additional expenses prior to annexation and would do so only to satisfy petitioning or voting property owners, or to provide more specific information to inform the City’s elected officials about the potential costs of future needs for infrastructure improvements.

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Chapter 4 Conclusions & Recommendations The challenges faced in any of the Airport Study Area Annexation alternatives are those normally required of the City and the County. The Port of Bellingham and Whatcom County Fire District No. 8 are also major stakeholders in this annexation decision. So, all four jurisdictions will need to work together to make major changes in how each has been or will be doing business in the annexation area. The City Council should decide the size, the timing, and the method for the annexation alternative(s) that the City would pursue. Given the duration since the Urban Growth Area was adopted and also given the current petition, some annexation would appear to be ripe. An annexation discussion has been initiated with various officials at Whatcom County, the Port of Bellingham, and Fire District No. 8, and the City must decide what actions to pursue. 4.1 Range of Annexation Alternatives

Annexation Alternative 6 (annexing the entire Study Area with a two-year transition period) is the recommended approach. It should be noted that this recommendation is being made conditionally, as the specific financial implications of the alternatives were not part of the consultant’s scope of work. City staff has used their annexation model to forecast revenues and expenses for the alternatives and that information is attached to this report. The range of other alternatives including Alternative 6 are as follows:

• Annexation Alternatives 1-4 minimize the capital facilities and land use planning that can be done at this time.

• Annexation Alternatives 5-7 recognize that a single annexation may be preferable and would avoid a series of annexations or a limited annexation that fails to bring that portion of the UGA including the Bellingham International Airport into the City.

• Annexation Alternative 2 or 3 (possibly even 4 if an election was tried and failed) could be reconsidered. These alternatives could be considered if the recommended Annexation Alternative 6 failed to be approved either by the City Council or through an election-method annexation process.

4.2 Interagency Agreement Issues

The City and the Port should begin the process to develop an Interagency Agreement with respect to possible annexation. Some of the issues to be covered in such an agreement have been analyzed and reviewed for possible resolutions by both parties through the preparation of this study. This agreement should identify airport operation concerns and possible solutions such as:

• Zoning designations for Airport Operations area (inside the fence) and adjacent commercial/industrial zoned areas;

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• FAA required airport protection policy development (starting with County Comprehensive Plan policies) that would need to be added to Bellingham’s comprehensive plan;

• Development standards agreement and a capital facilities planning process for the Airport Neighborhood;

• Agreements regarding responsibilities for police and fire services after annexation;

• A clear description of new tax implications to businesses and property owners transitioning from the County to the City; and

• The responsibilities and arrangements for snow plowing. These are the big issues that have been identified during the course of this annexation study. The interagency agreement may include a number of smaller items that the Port and the City want to assure each other will be addressed to mutual satisfaction. The next steps will start with accepting and utilizing the annexation study information as a basis for crafting an interagency agreement. Following approval of this agreement and City Council direction on a method and timing for an annexation, the City and the Port should initiate the preferred annexation and begin to meet with other property owners to inform them and obtain consent or support for the annexation. City staff should work with the property owners, who want annexation, to prepare the documents needed for the annexation to be formally brought before the City Council for their actions. The annexation study and subsequent cost/benefit analysis should be completed. The Departments should plan a multi-year implementation strategy and budgets that will be needed to effect an annexation. The recommended Alternative 6 provides for a two-year transition period that allows for Police and Fire to expand their servicing plans for the capacity needed to meet both the Airport and Alderwood Neighborhoods at adopted LOS standards without disrupting existing services at LOS standards city-wide. Finally, the County, the Boundary Review Board, the State OFM and Department of Revenue will need to be involved in the annexation process. From the 30,000 foot level, the broader costs and benefits can be understood as related to:

• the expansion of services and facilities that have been planned for in the City and County 20-year comprehensive plans and the Urban Growth Area Plan,

• encouraging desired economic development through the proactive accommodation of the City’s projected employment growth, and

• the continued development of City facilities and services needed to meet the planned growth consistent with adopted LOS standards.

The long term relationships between the Port and the City, as well as the County and the City, need to progress according to the comprehensive plans that have been adopted and in place for a number of years. The annexation should be planned and approved as the fruition of the long-standing policy decisions, particularly for the economic development of the greater Bellingham community and its airport.

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Exhibit 15: Potential Next Steps in Annexation Process

Annexation Study City/Port craft Interagency Agreement

June - August 2008

Annexation Area/Method City Council directs staff re: area to be annexed and method

June - July 2008

Current Annexation Petition City staff work with current petitioners for annexation

July 2008

Public Information City staff prepare factual information re: annexation

August 2008

Budget Proposals City/Port staff prepare staff and capital budget plans

August – October 2008

New Annexation Petition Port and other petitioners file an annexation petition

September 2010 (after two-year recommended transition period for staff/service increases)

Public Meetings City Council initiates annexation process

Fall 2010 (After annexation petition has been filed with the City)

City, Boundary Review Board Review Process

City processes annexation through required procedures

Fall/Winter 2010

Annexation Ordinance final approval by City Council

Establishes effective date Effective date Jan 1, 2011

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APPENDIX A

City of Bellingham’s Annexation Financial Impact Summary

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APPENDIX B

Annexation Policy Basis