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Resolution 1598 RESOLUTION NO. 1598 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DECLARING THE CITY'S INTENT TO ANNEX THE UNINCORPORATED TERRITORY IDENTIFIED HEREIN AS "ANNEXATION AREA 1" WITHIN THE ESPERANCE MUNICIPAL URBAN GROWTH AREA; DIRECTING CITY STAFF TO COLLABORATE WITH SNOHOMISH COUNTY TO FORM AN INTERLOCAL AGREEMENT PROVIDING FOR THAT ANNEXATION PURSUANT TO RCW 35A.14.472; AND DEFERRING SIMILAR COLLABORATION WITH RESPECT TO "ANNEXATION AREA 2" PENDING COMPLETION OF THE 84TH AVENUE WEST BRIDGE INVESTIGATION. WHEREAS, the City of Edmonds (the "City") is a non-charter code city organized under Title 35A RCW and plans under chapter 36.70A RCW (the Growth Management Act); and WHEREAS, the unincorporated Esperance neighborhood lies wholly within an urban growth area designated under RCW 36.70A.110 and, as a Municipal Urban Growth Area assigned to the City of Edmonds, is a designated potential annexation area of the City; and WHEREAS, the City's Comprehensive Plan expressly supports coordinated planning for and annexation of unincorporated areas of the Esperance Municipal Urban Growth Area, and Snohomish County's Comprehensive Plan encourages the annexation of unincorporated urban areas into cities and towns; and WHEREAS, RCW 35A.14.472 authorizes a code city, as provided in RCW 35A.14.296(2), to collaborate with the county in which the code city is located to form an interlocal agreement regarding annexation of unincorporated territory within the urban growth area boundary, and provides that such method of annexation is an alternative to, and additional to, all other methods provided in chapter 35A.14 RCW; and WHEREAS, RCW 35A.14.472(1) requires that the process for forming such an interlocal agreement include procedures for public participation that provide for broad dissemination of proposals and alternatives, opportunity for written comments, public meetings after effective notice, and consideration of and response to public comments, and further requires that the interlocal agreement be executed only after notice of availability of the agreement is posted on the website of each legislative body for four weeks and after a public hearing held by each legislative body, separately or jointly; and WHEREAS, RCW 35A.14.472(3) requires that any such agreement or plan address (a) a balancing of annexations of commercial, industrial, and residential properties so that any potential loss or gain is considered and distributed fairly as determined by tax revenue, (b) development, ownership, and maintenance of infrastructure, and (c) the potential for revenue- sharing agreements; and WHEREAS, RCW 35A.14.472(4) requires that, in addressing the items in RCW 35A.14.472(3)(a) through (c), the parties also address the balancing of factors and objectives for annexation review set forth in RCW 36.93.170 and 36.93.180; and WHEREAS, RCW 35A.14.472(2) provides that an interlocal agreement under that section may include use of a sales tax credit for annexed areas, and RCW 82.14.415, as amended by 2SHB 1425 (Laws of 2023, ch. 351), authorizes a state-shared sales and use tax credit for cities that annex qualifying areas pursuant to, among other statutes, RCW 35A.14.472, subject to the requirements and limitations of RCW 82.14.415, including that no city may begin to impose that tax after July 1, 2028; the tax authorized by RCW 82.14.415 is structured as a credit against the State's 6.5 percent sales and use tax under chapters 82.08 and 82.12 RCW, so that, if imposed, it would not increase the sales and use tax rate paid by consumers within the annexed area but would instead redirect 0.1 percent of the taxable sale from the State's share to the City for use in providing municipal services within the annexed area; and WHEREAS, the City commissioned an Edmonds Annexation Study evaluating the potential fiscal, service, and infrastructure implications of annexing Esperance, which study included a review of the current condition of the 84th Avenue West bridge in the northern portion of Esperance and observed that Snohomish County has rated that bridge in "fair" condition, placing it in a category that is not currently eligible for County funding for repair or replacement, and further observed that the bridge represents the largest potential capital cost in the area with a level of uncertainty higher than other capital categories; and WHEREAS, the City Council has considered two potential annexation areas within the Esperance Municipal Urban Growth Area, identified as "Annexation Area 1" and "Annexation Area 2" and depicted on the map titled "Esperance Annexation Area Options v2 20260701" attached to this Resolution as Exhibit A and incorporated herein by reference; and WHEREAS, Annexation Area 1 comprises the eastern and southern portions of the Esperance Municipal Urban Growth Area, including the area surrounding Esperance Park and the neighborhoods lying along or between 228th Street SW, 230th Street SW, and 231st Street SW, as more particularly depicted in Exhibit A, with a legal description to be finalized in coordination with Snohomish County and set forth in the interlocal agreement authorized by this Resolution; and WHEREAS, Annexation Area 2 comprises the northwestern, western, and north-central portions of the Esperance Municipal Urban Growth Area, includes Robert Leary Park and the neighborhoods along 84th Avenue W and 88th Avenue W between 224th Street SW and 228th Street SW, and includes the 84th Avenue West bridge crossing; and WHEREAS, the City Council has determined that it is in the interest of the City, its taxpayers, and the residents and property owners within Annexation Area 2 to complete a further investigation of the current and projected condition, structural sufficiency, remaining service life, and prospective repair or replacement cost of the 84th Avenue West bridge, including consultation with Snohomish County and, as appropriate, the Washington State Department of Transportation, before the City commits to the assumption of ownership, maintenance, and capital obligations associated with the bridge and the surrounding Annexation Area 2, and that collaborating with Snohomish County to form an interlocal agreement under RCW 35A.14.472 with respect to Annexation Area 2 prior to completion of that investigation would be premature; and WHEREAS, proceeding with Annexation Area 1 on the schedule contemplated by this Resolution while deferring Annexation Area 2 pending the 84th Avenue West bridge investigation preserves the City's ability, if the Council later so determines and subject to the July 1, 2028 outside date in RCW 82.14.415(11), to collaborate with Snohomish County to form a separate interlocal agreement under RCW 35A.14.472 with respect to Annexation Area 2 and to seek the sales and use tax credit authorized under RCW 82.14.415 for that area, which could provide significant additional funding to repair the bridge; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, AS FOLLOWS: Section 1. Findings and Incorporation of Recitals. The recitals set forth above are hereby adopted as findings of the City Council and are incorporated into this Resolution as though fully set forth herein. Section 2. Declaration of Intent to Annex Annexation Area 1. The City Council hereby declares the City's intent to annex Annexation Area 1, as generally depicted on Exhibit A, into the corporate limits of the City of Edmonds pursuant to the interlocal agreement method of annexation authorized by RCW 35A.14.472. The Council finds that Annexation Area 1 lies wholly within the City's designated urban growth area under RCW 36.70A.110 and that annexation of Annexation Area 1 is consistent with the City's Comprehensive Plan required by chapter 36.70A RCW. Section 3. Directive to Collaborate with Snohomish County to Form an Interlocal Agreement. The Mayor and City staff, in consultation with the City Attorney, are hereby authorized and directed to collaborate with Snohomish County, pursuant to RCW 35A.14.472 and chapter 39.34 RCW, to form an interlocal agreement providing for the annexation of Annexation Area 1 to the City, including joint agreement with the County on the precise boundaries and effective date of the annexation, on the terms set forth in this Resolution. Section 4. Required Subject Matter of the Interlocal Agreement. The interlocal agreement formed pursuant to Section 3 of this Resolution shall address, at a minimum, each of the following, consistent with RCW 35A.14.472(3) and (4): • A balancing of the annexations of commercial, industrial, and residential properties within Annexation Area 1 such that any potential loss or gain is considered and distributed fairly as determined by tax revenue; • The development, ownership, and maintenance of infrastructure serving Annexation Area 1, including transportation, stormwater, parks (including Esperance Park), and other public infrastructure and facilities; • The potential for revenue-sharing agreements between the City and Snohomish County with respect to Annexation Area 1; and • The balancing of factors and objectives for annexation review set forth in RCW 36.93.170 and 36.93.180. Section 5. Public Participation Procedures. The formation of the interlocal agreement shall include procedures for public participation that satisfy RCW 35A.14.472(1), including (a) broad dissemination of the proposed interlocal agreement and any alternatives under consideration; (b) an opportunity for written public comment; (c) one or more public meetings held after effective notice to affected residents, property owners, and other stakeholders; and (d) consideration of, and a written response to, public comments received. Notice of availability of the proposed interlocal agreement shall be posted on the City's website for at least four weeks prior to execution, and the proposed agreement shall not be executed until after a public hearing has been held by the City Council, separately from or jointly with the Snohomish County Council. Section 6. Sales and Use Tax Credit under RCW 82.14.415. Consistent with RCW 35A.14.472(2), the interlocal agreement authorized by this Resolution may address the City's prospective use of the annexation sales and use tax authorized under RCW 82.14.415. The City Council acknowledges that the City has not imposed, and this Resolution does not impose, any tax under RCW 82.14.415. Any such tax would be imposed only after adoption of the interlocal agreement and the implementing annexation ordinance for Annexation Area 1, by a separate ordinance of the Council meeting the imposition requirements of RCW 82.14.415 and subject to the July 1, 2028 outside date in RCW 82.14.415(11) for beginning to impose the tax. If imposed, the tax would not increase the sales and use tax rate paid by consumers within Annexation Area 1; rather, RCW 82.14.415(2) makes the tax a credit against the State's 6.5 percent sales and use tax under chapters 82.08 and 82.12 RCW, so that 0.1 percent of the taxable sale would be redirected from the State's share to the City for use in providing, maintaining, and operating municipal services within Annexation Area 1. The Council further acknowledges that RCW 82.14.415 operates on a cost-reimbursement basis, in that annual distributions to the City under RCW 82.14.415(7) are limited to the true and actual costs the City incurs in providing, maintaining, and operating municipal services within Annexation Area 1, net of general revenues from the area, up to the threshold amount established for the area in the imposing ordinance. Accordingly, City staff are directed to bring back to the Council, together with the proposed interlocal agreement and any implementing annexation ordinance: (a) an analysis of the City's eligibility for and projected receipts under RCW 82.14.415 with respect to Annexation Area 1, addressing both the determinations required for a valid imposing ordinance under RCW 82.14.415(1), (8), and (9) and the true-and-actual-cost cap on annual distributions under RCW 82.14.415(7); (b) a proposed allocation of existing and new City resources to be dedicated to municipal services for Annexation Area 1 that would qualify for reimbursement under RCW 82.14.415; and (c) a recommendation as to the form and timing of a separate ordinance imposing the tax. Section 7. Deferral of Collaboration on an Interlocal Agreement for Annexation Area 2. The City Council hereby determines that it is not appropriate at this time, except as described in this Section 7, below, to collaborate with Snohomish County to form an interlocal agreement under RCW 35A.14.472 with respect to Annexation Area 2. The Council's basis for that determination is that Annexation Area 2 contains the 84th Avenue West bridge crossing, which the Edmonds Annexation Study identified as the largest potential capital cost within the Esperance Municipal Urban Growth Area and as an item carrying a higher degree of uncertainty than other capital categories, and which Snohomish County has rated in "fair" condition — a rating that currently makes the structure ineligible for County repair or replacement funding. The Council finds that a further investigation of the bridge's current and projected condition, structural sufficiency, remaining service life, and prospective repair or replacement cost is necessary and prudent before the City commits, through annexation, to assume ownership, maintenance, and capital- funding responsibility for the bridge and the surrounding Annexation Area 2. While the City performs its due diligence regarding the bridge, the City Council would request that the interlocal agreement for Annexation Area 1 contain a commitment from Snohomish County to not make any zoning changes to Annexation Area 2 that would take effect before July 1, 2028. Section 8. 84th Avenue West Bridge Investigation. City staff are hereby authorized and directed to undertake, in coordination with Snohomish County Public Works and, as appropriate, the Washington State Department of Transportation, a further investigation of the 84th Avenue West bridge (the "Bridge Investigation"), which shall include, at a minimum: (a) a current structural condition assessment and load rating; (b) an estimate of remaining service life under existing traffic conditions; (c) a scoping-level estimate of prospective repair, rehabilitation, and replacement costs; (d) identification of potential federal, state, county, and other funding sources; and (e) an analysis of any impact of the Bridge Investigation's findings on the City's cost- of-service and threshold-amount analyses under RCW 82.14.415 with respect to Annexation Area 2. Staff shall report the results of the Bridge Investigation to the City Council and provide a recommendation as to whether, when, and on what terms the City should collaborate with Snohomish County to form an interlocal agreement under RCW 35A.14.472 for the annexation of Annexation Area 2. Section 9. No Prejudice to Future Action on Annexation Area 2. Nothing in this Resolution shall be construed to preclude, or to prejudge in any respect, the City's future consideration of annexation of Annexation Area 2, whether under RCW 35A.14.472 or any other statutorily authorized method of annexation. The City reserves all rights to collaborate with Snohomish County to form one or more separate interlocal agreements under RCW 35A.14.472 with respect to Annexation Area 2, or to pursue any other statutorily authorized method of annexation, at such time as the City Council determines to do so, subject to applicable law, including the July 1, 2028 outside date for imposition of the sales and use tax credit under RCW 82.14.415(11). Section 10. Coordination and Reporting. City staff are requested to provide regular status reports to the Council regarding (a) the progress of the City's collaboration with Snohomish County to form an interlocal agreement for Annexation Area 1, (b) the results of the public participation procedures described in Section 5, and (c) the progress and findings of the Bridge Investigation described in Section 8. Any interlocal agreement formed pursuant to Section 3, and any ordinance providing for annexation of Annexation Area 1, shall be brought back to the Council for its consideration in accordance with RCW 35A.14.472 and other applicable law. ADOPTED by the City Council of the City of Edmonds, Washington, at a special meeting thereof held this 18th day of August, 2026. MAYOR, MIKE ROSEN ATTEST/AUTHENTICATE: CITY CLERK, LUKE LONIE FILED WITH THE CITY CLERK: AUGUST 18, 2026 PASSED BY THE CITY COUNCIL: AUGUST 18, 2026 RESOLUTION NO: 1598 Mike Rosen (Aug 19, 2026 11:12:20 PDT)