Lacey City Council on Thursday rejected a Lacey Fire District 3 annexation request, deciding that it did not show the right return on investment for the city.
“I’m in favor of the annexation, but not under the current financial conditions,” Councilman Jeff Gadman said.
Lacey Fire District 3’s annexation request is related to a capital facilities and equipment plan the fire commission recently approved. The district plans to seek $19.5 million through a bond issue to make renovations and buy equipment for four of its five fire stations. Two of the stations are in the city, while two more are in Lacey’s urban growth area.
The district is working with Thurston County on a redevelopment plan for its station on Steilacoom Road, Fire Chief Steve Brooks said Thursday. If Lacey annexed Station 33 on Mullen Road into the city, then the district would have three stations in the city, making the building permit process more streamlined, Brooks said.
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The annexation request focused on about 66 acres east of Timberline High School and north of Mullen Road, Planning Manager Ryan Andrews said. It is home to Station 33, undeveloped land, Lacey-owned property, a church and a single-family residence.
Thurston County plans to reconstruct Mullen Road, but if Lacey went forward with annexation, the city would suddenly be on the hook for about 30 percent of the road construction costs, or $800,000, Andrews said.
Because the annexation area is mostly owned by government agencies and a church, it produces just $623 a year in tax revenue, Andrews said.
He said it would take more than 1,200 years to pay back $800,000 at a rate of $623 a year.
Andrews said the city looked at expanding the annexation area to bring in more tax revenue, but that would mean picking up the entire cost of the Mullen Road project.
Deputy Mayor Cynthia Pratt asked whether Station 33 alone could be annexed.
Andrews said that plan would still include a small part of Mullen Road, which would create this dilemma: A section of that road would be city-owned, county-owned, city-owned and then county-owned again, he said.
Council members were sympathetic to the district’s goal. Lacey Mayor Andy Ryder suggested an interlocal agreement between the district and city, so that the city could handle the building permit process for the station upgrades.
Brooks said the city and fire district have done that before and he would support that kind of administrative solution.
Lacey Fire District 3 plans to have a bond issue presentation at its next fire commission meeting at 5:30 p.m. Feb. 16 at its main station, 1231 Franz St. SE. Brooks said the bond issue could go before voters this fall or in 2018.