Community Government

Gig Harbor development revenues dip, but finance director not worried

The city of Gig Harbor saw a sharp dip in development-related revenues like building permits in the first quarter of 2023.

Building permit fee revenue is about $131,000 for the first quarter of 2023. It was over $400,000 in the first quarter of 2022, a 67 percent decline.

The city also saw real estate excise tax revenues plunge 35 percent year-over-year, likely because higher interest rates slowed the market. Transportation and park impact fees, both of which fall under the development-related income heading, also declined.

But finance director Dave Rodenbach told the City Council Monday that the decline is not a major cause for concern yet, and the budget overall looks “pretty good.”

It’s too early in the city’s two-year budget cycle to draw much of a conclusion about development-related revenues, he said.

Meanwhile, the city started off the cycle with a general fund balance of close to $1 million. Other revenues are lining up well with the budget, expenditures are “tracking pretty normal and we have great reserves.”

If the trend in development-related revenues continues, it could leave the city with a $2.2 million budget hole at the end of the two-year budget cycle. But, Rodenbach cautioned, the city has seven quarters left in that two-year cycle to recover.

“We just want to sit and monitor this” for now, he told the council. Rodenbach will provide monthly reports to the council on development revenue.

City updates stormwater manual

The city council approved a more than 1,200-page Stormwater and Site Development Manual on April 24.

The manual establishes guidelines and clarifications for wetlands protection, sidewalk infiltration and other issues to control the quantity and quality of stormwater runoff.

The update brings the city’s manual into compliance with current State Department of Ecology permit regulations. It was last updated in 2016.

UGA Annexation Assessment

The council accepted an Urban Growth Area (UGA) Assessment report that reviewed the impacts annexation of certain areas could have on the city. The report describes the fiscal impacts and infrastructure upgrades that would be needed if the city annexed certain areas.

For example, additional development in the Purdy UGA would require investment in stormwater infrastructure. Linking the neighborhoods in the Reid Road UGA to the city sewer system would require significant funding for new facilities, according to Community Development Director Carl deSimas.

Each UGA annexation area would need a unique solution, because there is no one-size-fits-all solution, he said.

The report will be an important reference as the city updates its Comprehensive Plan in 2024, he said.

Upcoming meetings

• The council’s study session at 3 p.m. Thursday, April 27, will include a discussion of upgrades to the wastewater treatment plant; replacing pavers at Ancich Park; and a report on impact fees.
• The next city council meeting will take place Monday, May 8.