‘It’s Quite a Crisis’ – The City of Normandy Park is Rapidly Going Broke


"A structural problem" – Normandy Park City Manager Doug Schulze.

by Ralph Nichols

Normandy Park, one of King County’s smallest suburban cities, is rapidly going broke.

City Manager Doug Schulze terms the city’s looming financial crisis “a structural problem.”

This, he said, is “directly related to the fact that as a mostly residential community, we don’t bring in the amount of money needed to support the core services that we deliver.”

Looking for solutions, some city council members are now casting a covetous eye on Burien’s Manhattan neighborhood.

If Normandy Park could annex this area – with its commercial strip along the east side of 1st Ave. S. – the city would gain badly needed revenue from business and sales taxes.

“It’s a tricky proposal,” Mayor Clarke Brandt told The Normandy Park Blog this week, allowing that it’s questionable whether the proposal will “reach the table.”

While this is “very preliminary,” Brandt said Normandy Park separated the Manhattan area “when we annexed the west side … it’s ripe for discussion.”

He described the Manhattan area as “kind of an orphan” for Burien. “Burien’s efforts will be on Town Center and annexation” of North Highline….

“I would welcome it. The tax revenues generated would be enough to allow us to hire a new police officer,” he said.

For Normandy Park to do this, however, Burien would first have to de-annex the Manhattan area within its city limits – and Burien is unlikely to cede this tax-producing commercial strip.

But desperate times call for desperate measures, and Normandy Park is approaching the brink.

Spending Reserves, Seeking Solutions
The situation “is not dire yet,” Brandt said, “but it will become dire if we don’t make changes. We have resources. In fact we’ve been spending our resources for years.”

These “resources,” said Schulze, are the city’s dwindling reserves – which will be exhausted in an estimated three years if new revenue sources aren’t found, or additional spending cuts are made.

Additional possibilities from a list of more than 20 options the Normandy Park City Council is studying include:

  • Asking local voters to approve a property tax levy lid lift.
  • Establishing a Transportation Benefit District with a $20 per vehicle license tab fee.
  • Imposing new local taxes including a business and occupation tax and a 6 percent utility tax on storm water fees.
  • Completing redevelopment of the Manhattan Village area.
  • Withdrawing from King County Fire District 2 (Burien/Normandy Park Fire Department) and contracting for firefighting services to free local property tax revenue.
  • Withdrawing from the King County Library District, also to free local property tax revenue.
  • Sharing a public works director 80/20 with SeaTac.
  • Contracting with the City of Des Moines for animal control and code enforcement services.

“If we want to get back to where we were before the downturn in 2008, we need $1.2 million [in new revenue] to get up to the moderate level of service we had in 2008,” Brandt said.

Property Tax Levy Lid Lift
A property tax levy lid lift would generate $300,000,” he noted. “I’m confident the voters of the City of Normandy Park will go for it when they find out where we are….

“In public safety, we’re already two police officers short. We just can’t keep on operating short and shorter.”

The city council can impose a Transportation Benefit District vehicle tab fee of no more than $20 without voter approval.

And a business and occupation tax may be an attractive option for generating limited additional revenue since, Schulze noted, Normandy Park is the only city in South King County without it.

Despite its obvious benefits, advancing the Manhattan Village project presents a Catch-22, however, since the city is currently without a public works/community development director.

Another priority vacancy is a Public Works Department maintenance worker.

Remaining priorities for increasing staff “depending on the economy and city projects” are an entry level planner, a receptionist/clerk who can support the Finance Department, and an assistant police chief.

This according to the minutes of a special April 24 council study session to review the city’s financial situation and consider possible solutions, which also indicate a council goal “to maintain a comfortable staffing level” of 30 full-time equivalent city employees.

“It’s quite a crisis" – Councilmember Marion Yoshino.

“Quite a Crisis”
“It’s quite a crisis,” agreed Normandy Park City Councilwoman Marion Yoshino. “I don’t think that people are quite aware of it.

“Two years ago we laid off our Parks and Recreation director and our Community Development director. Then we had one person in charge of public works and community development and part parks and rec, and we had to lay him off as of January.

“We also lost our city hall receptionist as of eight months ago,” Yoshino continued. “And we might have to lay off our only planner as of next Jan. 1. We’re down to less than nothing. It’s really bad.”

While contracting for police services with the King County Sheriff’s Office, as do Burien and SeaTac, she said “we get a lot of good, real quality police attention for what we pay” for the city’s own department.

“We spend about $90,000 per officer,” which Yoshino said is about half per officer compared to what contract cities pay the sheriff’s office.

Normandy Park is the smallest Highline-area city with a 2010 population of 6,335 occupying just 2.5 square miles of land. Primarily a residential community, the city is considered somewhat upscale with a per capita income that ranks 26th in the state.

Since 1999, however, local governments have seen declining tax revenues – and residential communities with small commercial districts have been hit especially hard.

Financial Needs Analysis
“The City of Normandy Park has experienced consistent and severe financial declines during the past 10 years,” notes a Financial Needs Analysis prepared for the April 24 meeting.

“Specifically, lost revenues due to voter-approved initiatives and declining revenues associated with the Great Recession have had significant adverse impacts on the City budget. Since 2009, the City has been forced to reduce spending through a variety of methods, including layoffs, spending cuts, and unfilled staff positions.

“In addition,” this analysis continues, “City reserves have been spent down to the minimum necessary. In 2012, additional cuts of $300,000 to $400,000 were required to avoid reducing reserve funds to a dangerous level.”

In the absence of new revenue, perhaps coupled with still more spending cuts, Normandy Park’s general fund would begin to run year-end deficit balances by 2015, according to the city’s six-year forecast.

State law prohibits cities from ending the year with a financial deficit.

Sustainability Options
Long-term “sustainability options” for Normandy Park’s economy, Schulze said, include “filling up Towne Center” and completing redevelopment of the Manhattan Village subarea.

Manhattan Village is “under developed, but there are ‘opportunity sites’ there that with the right incentives and redevelopment plan in place we could see some new business come in,” including commercial buildings and multi-use buildings with ground-floor retail and multi-family housing units above.

The city could encourage higher densities there that, in turn, would generate higher rents,” he added.

Schulze noted that developer Tom O’Keefe, who acquired Normandy Park Towne Center in early 2011, “is offering great incentives for new tenants,” but this is progressing slowly in the slow economic recovery.

Reduced City Revenues
Everyone interviewed agrees that Normandy Park’s financial difficulties began in 1999 when voters statewide approved Initiative 495, which limited vehicle tab fees for the Motor Vehicle Excise Tax to $30 a year.

That, said Schulze, essentially eliminated the state sales tax equalization fund that distributed revenue to cities with a limited sales tax base.

Next came I-747, also approved by voters statewide, which limits annual property tax increases by local governments and special purpose districts, such as school and fire districts, to 1 percent or the rate of inflation – whichever is less.

“Until then,” he added, “we had the authority to levy a 3 percent property tax increase annually. Normandy Park could provide services with a little sales tax base.

“But the loss of both” – sales tax equalization revenue and annual 3 percent property tax increases – “is costing us $1.5 million a year.”

Then came the recession in 2008, which not only reduced already limited local sales tax receipts but also brought down property values in this predominantly residential community.

“There’s no question we need to do as much as we can immediately,” Schulze said. “The council hasn’t decided what to do yet. It will require some out-of-the-box thinking, some radical ideas.”

“We’ve got a lot on our plate right now,” Brandt concluded.


Comments

21 Responses to “‘It’s Quite a Crisis’ – The City of Normandy Park is Rapidly Going Broke”
  1. David A. Kaempf says:

    Hello!

    There are a ton of comments about this article on the B-Town Blog sister site. I just posted about the city sending out an email with city financial information in preparation for the next city council meeting. I encourage Normandy Park citizens to sign up for the email or maybe attend the next meeting.

    Also, a lot of concerned citizens have started a Facebook page, Normandy Park Cares, in relation to a separate but related issue. Again, I urge citizens to take a look or maybe get involved.

    Ciao! david

  2. Mindy McClean says:

    I am strongly opposed to cutting the ties Normandy Park has with the King County Library System. Highline School District has suffered significant cuts as it stands; to take away the #1 resource for our children’s education on top of this is nothing short of a disgrace. Not to mention the resources KCLS provides for every single one of us in Normandy Park: computer access, computer classes, tutoring, pre-k development, senior activities, SAT study guides, and of course, the borrowing of books and e-books. What an embarrassment for the City of Normandy Park to even consider being the one city I am aware of with no library access! This should not even be on the table, let alone headed towards a vote at the ballot box in the fall. I encourage everyone to email, call or mail each of the Normandy Park City Council and the City Manager to let them know this will not be accepted….or we just may lose the library!

    • Dana Franks says:

      Hi all,

      I was sad to hear that the city of Normandy Park is considering a proposal to de-annex the King County Library System.

      Given that I am not a Normandy Park resident, I won’t take a position on this issue; however, as a librarian (Highline Community College) interested in assuring equity of access to library resources for all our citizens, I do want to support anyone seeking information on the consequences of de-annexation so they can make informed decisions about what action they might want to take.

      Just to be sure I understood what was being proposed, I went looking for information online. What I found online was Normandy Park’s Financial Outlook and Plan (http://www.normandyparkwa.gov/vertical/sites/%7BD313ED69-120E-439F-83D7-8BBE7447C948%7D/uploads/00_May_22_Council_Mtg.pdf) apparently discussed at a special meeting of the city council on Tuesday, May 22, 2012.

      Here is what I found on page 75:

      IDEA: 33. De-annex from Library District

      POTENTIAL ADVANTAGES: May reduce taxes to property in Normandy Park

      POTENTIAL DISADVANTAGES: Loss of library service to residents

      ESTIMATE OF FINANCIAL IMPACT: City Council adopts resolution to refer issue to voters (RCW 27.12.380) City picks up additional levy of 50 cents per $1,000 of assessed valuation – $600,000 per year (RCW 84.55.110)

      There’s also some complicated language on page 89 about how much revenue can actually be raised from a levy lid lift – language I don’t fully understand. But more about that below.

      And, there’s also some useful information on page 101.

      On Friday, June 1, 2012, I spoke by phone with Jennifer Wiseman at the King County Library Service Center. She has offered to put together a fact sheet for any interested group or party detailing the consequences of de-annexation. Mindy – you might be interested in contacting her so you can take her up on the offer.

      You can reach her at: [email protected] -OR- 425-369-3221

      Here are some facts she shared with me:

      If de-annexation were to go through, Normandy Park residents, though they could walk into any King County branch and browse the collection or use the facilities, they would not be able to:

      Borrow any materials
      Place holds on any materials
      Use any of the computers (or the resources those computers connect you to!)
      Use any of the remote services such as databases, ebooks, e-audio or e-video

      Some people believe that if the town opts out, individuals would be able to obtain library cards by paying for them. That is not the case. If the town opts out, no Normandy Park resident will be able to obtain a library card at all and will therefore lose all the services listed above.

      Normandy Park’s Financial Outlook and Plan lists the city’s options with respect to library services (page 101) as:

      Annex to a library district
      Establish own library
      Contract with library district for provision of library services
      Do not provide for any library services

      It hardly seems likely that any but the last of these options would be less expensive than what the city has now, but I’m not a financial analyst so I don’t know.

      Ms. Wiseman pointed out to me (and this should be surprising to very few of us) that ballot issues cost money. I’ll leave it to all of you to draw conclusions from that fact.

      And even though the residents of Normandy Park are taxed 50¢ per $1,000 of assessed value for KCLS library services, if this proposal did make it onto the ballot and it was passed, city residents would not actually recoup that full 50¢ per. According to Ms. Wiseman, they would gain only about 27¢ of that 50¢. When I mentioned, above, that there was language in Normandy Park’s Financial Outlook and Plan about how much revenue can actually be raised from a levy lid lift (page 89) – I think this may be what it’s referring to. A fact sheet from KCLS, however, might provide better clarity on that.

      KCLS tracks a lot of information about use of their system. I’m not sure if they can track usage of their materials and services back to a community, but if they can, that could be useful information. Knowing how many Normandy Park residents use the library, and how often, would be pretty cool to know. I think we can assume, though, that in a community like Normandy Park, a community that deeply values education, use of KCLS is probably quite high and its services precious.

      I don’t live in Normandy Park, and my home is not worth as much as a typical home in that community, but I personally pay less than $125.00 per year for KCLS library services. On the surface that might seem like a lot, but really, it’s not. It’s less than one Starbucks coffee per week for a year. Here’s another way to look at it:

      For that same amount of money, I might be able to buy about one paperback a month for a year, but then I’d have nothing left over for all the other services I get from KCLS:

      – all the audiobooks I borrow. These save my life as I drive up and down the highway to visit my father, ailing at age 93 with Alzheimers Disease
      – all the videos of great TV shows I never get to watch because I can’t afford HBO
      – the musical scores my daughter used to check out so she could follow along as she listened to Beethoven or Bernstein
      – the CDs I borrow to try them out before buying my own copies
      – the movies I borrow including documentaries that are hard to find in theaters
      – the movies we identified and borrowed one summer to host our own friends-and-family Mostly Motels film festival
      – the responsiveness of the KCLS acquisitions staff in buying titles I suggest (so I don’t have to spend my own money)
      – the amazing children’s librarians who, when you ask for “a chapter book that has a good adventure and a picture on most of the pages that will engage a 4-year-old,” can walk you through the stacks and booktalk 10 perfect possibilities (yes, that really happened!)
      – the picture books, both fiction and non-fiction, and easy readers we ate up like candy when the kids were young. The picture books are nowhere near as inexpensive as the adult paperbacks I mentioned above
      – use of KCLS’s extensive collection of online Reference books and other databases
      – the reference services that supplement our school library services after school is closed for the day. These are critical when our students’ projects are due tomorrow
      – the 24/7/365 access to the web-based resources
      – the sense of community I get when I attend programs at the library. Hearing Book-It Repertory Theatre perform banned books was amazing!
      – the outreach by the children’s and young adult librarians to our schools so students can learn how to use KCLS online services and resources*
      – and, though I don’t use it myself – the downloadable audio and video files, and the ebooks you can now add to your travelling reader

      I don’t know – considered in terms such as these, it’s hard to deny the value of the library to our citizens. And for a mere 27¢ per $1,000 of assessed value? Hmm… I guess it’s up to the citizens of Normandy Park.

      Dana Franks

      * I assume Marvista won’t qualify for visits from librarians if this measure goes through, though I don’t know. Would it receive services as an HSD school or is it all based on location? I guess that would be worth investigating

  3. Sign this peition at Change.org to save our association with KCLS!

  4. Same Old Story says:

    Its the same old story – cut police, fire, libraries, etc. Not one word about money wasted on lawsuits and non-essential projects, neither of which are detailed in 100 plus pages. I’d like to know how much was spent on the Beaconsfield and similar projects as wall as how much these type of projects are going to cost in the future. For example, how much is the implementation of the Shoreline Masterplan, which requires purchasing waterfront property and converting it to wetlands going to cost? What is the resulting increase in property taxes per household going to be?

    • David A. Kaempf says:

      Hello!

      What is the story on Beaconsfield? I’ve seen references to it but I’ve never seen a full write up. Is there a place I can look it up? That seems to be the problem in Normandy Park…everything is hush hush until it blows up somewhere…

  5. Same Old Story says:

    It’s a multiple million dollar project that is supported by certain pro-environment members of the city council. More worrisome is the Shoreline Master Plan which you can download on the city’s web site.

    http://normandyparkblog.com/2011/06/29/normandy-park-cascade-land-conservancy-sued-over-removal-of-bulkheads/

    http://www.highlinetimes.com/2011/08/16/news/normandy-park-lawmakers-contend-lawsuit-unnecessa

    http://www.govlink.org/watersheds/9/plan-implementation/SRFB-beaconsfield-design.aspx

  6. Mindy McClean says:

    I am writing this letter to the Normandy PArk Blog in an effort to spread the word about an alarming budget cutting idea put forth by the Normandy Park City Council. Normandy Park is seriously considering de-annexation from the King County Library System. I am strongly opposed to cutting the ties Normandy Park has with the King County Library System. Highline School District has suffered significant cuts as it stands; to take away the #1 resource for our children’s education on top of this is nothing short of a disgrace. Not to mention the resources KCLS provides for every single one of us in Normandy Park, student or no: computer access, computer classes, tutoring, pre-k development, senior activities, SAT study guides, e-book lending and of course, the basic borrowing of books. What an embarrassment for the City of Normandy Park to even consider being the one city I am aware of with no library access. Property values would also be affected by such an action. Can you imagine buying a home and not having access to a library? On top of this, the Council plan is actually two-fold: 1) de-annex from KCLS and then 2) impose a tax that will go straight to the general fund. No services to benefit from, but a tax will remain. Don’t believe it? Seems impossible? It does…until you look at the meeting agenda from May 22, 2012, p. 75 and p.101 at http://www.normandyparkwa.govoffice2.com/vertical/sites/%7bD313ED69-120E-439F-83D7-8BBE7447C948%7d/uploads/00_May_22_Council_Mtg.pdf. This suggestion should not even be on the table, let alone headed towards a vote at the ballot box in the fall. I encourage everyone to email, call or mail each of the Normandy Park City Council and the City Manager to let them know de-annexation from KCLS is unacceptable….or we just may lose the libraries!

  7. Sam Marmon says:

    Regarding the library – It looks like it is on a long list of cost cutting or revenue raising ideas. I personally rarely need a library, and Normandy Park has to consider what is best for their citizens in light of their budget issues. Burien library even though it is brand new, seems to be in a rough neighborhood and I’d like to avoid that area. Des Moines library seems to be a better environment.

    Unless businesses come to NP Towne Center at 200th and 1st, Normandy Park will have to raise revenues or cut services. I think citizens of NP should take a hard look at some of the expensive shoreline work they want to do, and do a cost/benefit analysis especially considering the legal challenges ($ spent on lawyers!). It seems that in the current environment, that money would be better spent towards maintaining our basic city infrastructure, which probably should include libraries.

    While libraries are nice to have, we shouldn’t say libraries at any cost. Someone can correct me here, but it looks like the library claims 50 cents per $1000 assessed value. That’s probably about ~$200/per household per year based on $400K average values around here.

    • Orange roughie says:

      Good, we dont really want you here anyhow. More parking for us and less wait time sounds lika a win for Burien if you leave KCLS

  8. David A. Kaempf says:

    FYI: If you contact your Normandy Park City Council person regarding the Hanbleceya issue, there is a subpoena in effect and your email or correspondence will be handed over to their attorneys.

  9. Mindy McClean says:

    Yes, Normandy Park must do what is right for all of it’s residents…and the majority use the libraries. Whether it be Des Moines or Burien or Sea-Tac or merely online and e-books, if the Council pushes this through, Normandy Park residents will not have access to any of the resources the King County Library has to offer. No summer reading program for students, no storytime for pre-K ages, no use of the libraries resources to complete homework assignments, essays or research papers for staudents of all ages. No senior activities, no borrowing of books or magazines for leisure. Think you will save on your taxes? Think again. The plan is to impose a new tax that will go directly to the general budget. No services, but oops, you are still paying! Think about property values. Wouldn’t it be a bit ridiculous to be the only city without library access? I cannot imagine being de-annexed from KCLS will help increase our home values. Please, attend the Council meeting on June 12th or at least write the CIty Council and City Manager and tell them what you think so they can make a decision based on what the people of Normandy Park want. They cannot make an informed decision if they don’t know what the people they are representing expect of the city leadership.

  10. David A. Kaempf says:

    My son just came home from Marvista School with a note from his first grade teacher. They wrote a letter to the City Council asking them to save the library! I’ve never lived in a town without a library…what a concept!

  11. Common sense says:

    So the city had the appropriate funds for years now its going broke. Sounds like someone hasa failed to do thier job.

  12. bookworm says:

    Who is to say that we would not have access to a Library? We could simply pay a $200 membership fee per year. It would be just like going to the gym. I personally think that that would be a fine solution to the problem if Normandy Park decides to no longer be a part of KCLS. It would be like a gym membership – those that want it can pay for the services, and those that do not use the services do not have to pay for it.
    I agree with Sam, I personally do not use the libraries all that much. While I have a great love for books, and spend quite a bit of my free time reading, I actually do not use the libraries that frequently. I want my children to also read. so I read to them, I have also created my own summer reading incentives for my children, etc. Also, what about non-profit organizations? Maybe someone would step up to the plate if there was a need for it.
    Additionally, has anyone noticed that in Libraries lately, the majority of the space is now being taken over by computers? Does going to a library revolve around books anymore? If we lose this service, we should be given the option to pay for a library subscription or something like that, that way those that want the services will still have access to them.

    • Orange roughie says:

      lol derp

    • Dana Franks says:

      Bookworm,

      I’m not sure where you got your information but you are simply mistaken.

      Some people believe that if the town opts out, individuals would be able to obtain library cards by paying for them. That is not the case. If the town opts out, no Normandy Park resident will be able to obtain a library card at all and will therefore lose all the services listed above.

      See my full explanation of what would happen, above.

      Dana Franks

  13. Esther Rickelton says:

    Some years ago the citizens of Normandy Park voted to annex to the King County Library District thereby becoming a part of that taxing district. Any change in this status would require a vote of the people. Funding for cities and libraries is complicated, but we need to understand that library funding comes from a separate place than our city budget. Even if Normandy Park were to de-annex, the city would not receive the full amount of the tax we pay for our libraries.

    Libraries are a vital part of our community. They provide recreational reading, yes, but their primary value is the organization and provision of information. That may vary from the simple how to build a chicken house to discovering facts from an expensive data base that is not available on everyone’s computer. Libraries are great places for the do it yourself information center, but when the information is difficult to find and important to know, you can’t beat a good reference librarian! On the whole our communities are better because of libraries; our citizens are better informed; our children and new citizens read better and are able to contribute more. King County Library System was recognized as Library of the Year in the whole United States. Why would we want to
    sever our connection to something so valuable?

  14. Mindy McClean says:

    As of 1988, KCLS no longer offers individual memberships to those who cities are not annexed in to their system.

  15. Same Old Story says:

    They threatened to cut the library so everyone would get excited. You get access to the library and they get everything else….

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