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PenMet Parks proposing levy lid lift renewal

Posted on June 22nd, 2023 By:

PenMet Parks will ask voters in November to renew a six-year levy lid lift that would allow it to continue to collect property taxes of up to 6% more than the previous year instead of the state limit of 1%.

When residents voted to form the district in 2004, they agreed to pay 75 cents per $1,000 of assessed value to fund it. When property values rose, the $.75 rate had to be reduced to stay within the state’s 1% limit.

So in 2017, PenMet asked voters to restore the rate to 75 cents and raise the cap to 6% more than the previous year for six years. Fifty-four percent voted yes. That first levy lid lift expires this year.

A pumpkin takes flight at PenMet’s 2022 Scarecrow Festival at Sehmel Homestead Park. Vince Dice

Even with the limit bumped from 1% to 6%, rising property values can erode the tax rate. This year, PenMet could only levy a $.58 rate. To boost it by $.17 back to the full $.75, as the district proposes, would cost the owner of an average $865,753 Gig Harbor home $148 per year.

Lid lift would add $148 to average homeowner taxes

That’s just how much more it would cost than this year. The total PenMet tax for an average homeowner would be $649.

The average Gig Harbor home value increased in 2022 from $695,278 to $865,753 according to the Pierce County Assessor-Treasurer’s office. The one-year jump was the largest in the county, at 24.5%. Next year’s property taxes will be based on values that will be released next week.

County values overall fell about 3% in 2023, said Assessor-Treasurer Mike Lonergan, who has seen the new figures. Gig Harbor’s rose slightly, but nothing crazy like the past few years. The $.75 PenMet rate would be applied to the higher property values and increase the parks tax a little more.

Executive Director Ally Bujacich, reading from prepared documents during a study session Tuesday and regular meeting an hour later, told the board that the lid lift is needed because reverting to a 1% cap wouldn’t allow PenMet to keep pace with inflation and population growth and provide services the public desires.

A woman and girl fish from Fox Island fishing pier.

PenMet is improving access to the Fox Island fishing pier and to the beach below it.

The population has grown nearly 25% since 2000, from about 30,000 residents to 40,000, she said. Inflation has averaged 2.8% since 2004. The district forecasts the annual combined impact of population growth and inflation over the next six years to be 3.2% annually.

“After evaluating factors such as projected population growth, historic inflation rates and community need, PenMet Parks will not be able to sustain or enhance the park and recreation services it provides for our community unless the levy rate is renewed to $.75 as previously approved by voters,” she said.

Funds directed to community priorities

“Providing for an annual increase of up to 6% will help PenMet Parks keep pace with population growth and inflation. The additional funds would be used to acquire, provide, improve and maintain parks, park facilities, programs and services as prioritized by the district’s residents, including access to trails and open space, saltwater beaches and water-based recreation, parkland amenities that support diverse recreational activities, and exceptional programming for all the district’s residents, including our seniors, adults, youth, and vulnerable populations.”

The 2023 six-year capital improvement plan includes more than $60 million in unfunded priorities, she said, mentioning the Peninsula Gardens development in particular.

PenMet committed to voters that it would direct the previous lid lift funds to the community’s priorities, Bujacich said, and she recited means the district has used to further determine those preferences.

Sketch of PenMet Parks' community recreation center looking from the north with the existing Performance Golf building in the background.

PenMet is near to completing renovation of the former Performance Golf Center building in Phase 1 of its community recreation center and later this summer will begin building Phase 2. Courtesy of PenMet Parks

She listed several priorities that PenMet has completed, are underway or planned. They include:

New turf at Sehmel Homestead Park’s multiuse field. Vince Dice

Revenues up despite rate declines

After PenMet’s rate returned to $.75 with the first levy lid lift in 2018, it dropped in succeeding years until it reached $.58 with the huge property value increases this year. Soaring property values more than made up for the declining rate, however, as the park district’s revenues climbed each year from $6.0 million in 2018 to $8.4 million in 2023.

The value of all properties within the parks district nearly doubled from $7.9 billion in 2018 to $14.6 billion in 2023.

Without the levy lid lift, PenMet would collect $17.7 million less in property taxes over six years, Bujacich said.

Arletta Schoolhouse

PenMet renovated Arletta Schoolhouse and is now renovating Rosedale Hall.

Board members didn’t have questions or comments regarding the levy lid lift. Craig McLaughlin was the only person to speak about it during the public comment period. The Fox Island resident read a long list of “Do you plan on …” questions to the board. He didn’t make it through the end before his 3 minutes ran out.

One spoke during public comment

His concerns included the percentage of PenMet funds devoted to debt service and capital projects compared to operations. He quoted former Interim Director Hunter George, who wrote on March 1, 2021, about PenMet’s future cash flows with or without a levy.

“The review of these scenarios shows the district is in a strong financial position,” George stated. “Even if voters do not renew the lid lift, the district expects to maintain a cash cushion that would enable other investments to be made in the system.”

“I’m sure you’re going to say things have changed since March 1, 2021, so do you plan on informing the voters exactly what’s changed since then,” McLaughlin asked.

Commissioners can’t respond during public comment periods.

Board members will vote on the resolution during its July 18 meeting at the Arletta Schoolhouse. If it passes, they’ll answer possibly that question and many more when they launch a webpage and conduct community education later in the summer.

The resolution would be placed on the Nov. 7 general election ballot.