When it comes to funding the Southeast 256th Street project, the Kent City Council might just take the approach if at first you don’t succeed, try, try again.

Property owners along the street last month turned in enough signatures to overturn the city’s plan to charge them extra property tax fees to help pay for improvements. The property owners dissolved a Local Improvement District (LID) approved by the council to pay for about $2 million of an estimated $7 million project to upgrade and widen 256th Street on the East Hill from the “Y” intersection at Kent-Kangley Road to 116th Avenue Southeast.

But the three council members of the city’s Public Works Committee on Monday at City Hall voiced how upset they were that a few property owners had the power to stop the fees that also could jeopardize a $2 million state grant for the project. They all want the project to move forward but need to figure out how to pay for the $2 million lost through the LID process.

“LIDs have been used over 100 years in this community,” said Councilwoman Dana Ralph. “What I feel happened here is a very vocal minority has said we’re an exception to this rule. I struggle with that. This vocal minority also will gain the most benefit if this project goes through because of the increased value of their property.”

Property owners dissolved the LID because they gathered signatures from those who own at least 60 percent of the assessed land value within the LID boundaries.

The committee on Monday told the Public Works Department to seek bids for the project in an effort to find out exactly how much money is needed turn a two-lane road without sidewalks and lights into a three-lane road with a center turn lane, sidewalks and lights. The ad for bids will be posted later this month and city staff expects to have the bids by construction companies ready for the June 3 committee meeting.

City staff cost estimates show the project has a $2 million grant awarded six years ago to the city from the state Transportation Improvement Board (funded by the gas tax); $1 million from the city Transportation Impact Fee (charged to new developments and pre-existing structures with a major change in use); $1.6 million from the city storm drainage utility fund; and $360,000 from LID covenants that were pre-approved when developers built projects.

The state grant, however, could be taken back and given to another jurisdiction if the city isn’t ready to start construction by July 1. The board wants evidence that the city has a funding package to pay for the project.

Councilwoman Elizabeth Albertson brought up the idea to try for another LID.

“Is there anything in the law that prevents us from educating those on the LIDs exactly what happened and who signed and go out and try to form it again with new information?” Albertson said. “Because I hear people want this.”

Public Works Director Tim LaPorte said the council could take that step. He said a LID could even be formed after street construction starts.

“Sometimes it takes several tries,” LaPorte said.

City Attorney Tom Brubaker said if the council forms another LID the same procedure would happen with property owners again having the chance to protest and overturn a LID. He also pointed out that if a LID is formed after road construction starts, the banked-on money might need to be found somewhere else if property owners again dissolve the property fee.

“If we do that we’re still bumping against the large property owners and I’m not sure we can change their minds,” Councilman Dennis Higgins said about going for a new LID.

“I only have to change one,” Albertson responded. “I only have to take pictures of kids and show these people that live in Vancouver (B.C.), Gig Harbor or Kirkland or wherever they happen to be what we are really talking about and that being a good steward in the community means you participate in the community. I’m very frustrated but I can’t in good conscience not do anything.”

City officials want to improve the street not only for vehicles but to provide sidewalks and lighting for children who walk to school as well as those who walk to nearby businesses.

Higgins researched the property owners who opposed the fees and found out that 124 people signed petitions, with a few of them owning more than one piece of property. The signatures were from people who own $1.251 million worth of property or 62.35 percent (just more than the 60 percent threshold of $1.2038 million needed) of the total LID amount of $2.006 million.

“Four protest signers, comprising six of the properties, had the capacity to make or break the entire protest with their one signature,” Higgins said. “Without their signature the protest would have failed.”

The four largest property owners included Seattle-based IC USA No. 14 Holdings LP (three properties that house the 435 units of the Washington Park Apartments); North Vancouver, B.C.-based Hume Investments, Inc., (the 120-unit Easthill Apartments); Gig Harbor-based Erickson Stratford Arms (the 87-unit Stratford Arms Apartments); and Tom Reichert, of Kirkland, (ShurGuard Storage, 409 storage units).

Higgins added that the LID area includes an estimated population of 6,600 (based on 2010 Census) with 1,844 children under age 18. The housing includes 11 apartment complexes, 18 condo complexes and 436 single-family residences.

“We have to look at this entire community, not just the property owners,” Higgins said. “The people I have a problem with is the out-of-town apartment owners. I feel we need to go forward with this project.

“I believe we should continue to use LIDs as we have on every major road project in the city for 101 years. Residents in this area are benefitting from LIDs that other people paid all around the city.”

Higgins added the $2 million state grant covers regional funding and so that means people who live in Covington are helping to pay for the project. Some property owners opposed the fee because they wanted others who use the street to help cover the costs.

The committee also discussed possibly trying to get a loan from the state’s Public Works Board to help pay for the street. But City Finance Director Bob Nachlinger told the committee the city doesn’t have any funds at this time to pay back a loan.

Higgins said the city should look into using a portion of the new business and occupation (B&O) tax to possibly help pay for the project. Ralph said she opposed using the B&O tax.

Any properties impacted by the 256th LID would have had payments spread out over 15 years. The average assessment for the single-family homes would have been about $3,000 to be paid over 15 years, according to city officials.

Property owners also opposed the 256th LID when the city proposed the project four years ago. City officials dropped plans at that time to find other funds because of the recession but figured 2013 would be the right time to fund the street improvements.

View Larger Map