City manager presents conservative fiscal estimate for potential UGA annexation; EMS levy timing cited

The Chehalis City Manager presented a conservative fiscal overview Sept. 22 of a potential annexation of the urban growth area (UGA). Using 2020 census figures, staff estimated the UGA population addition at about 2,200 residents, which would put the city’s population roughly between 9,600 and about 9,900 depending on later development. The manager cautioned figures are conservative and subject to further verification.

Financially, staff estimated roughly $1.3 million annually in additional property-tax revenue and about $500,000 in sales-tax receipts on a conservative basis, for approximately $1.8 million. City staff also said an EMS levy increase of about $317,000–$320,000 could apply to the annexed area beginning Jan. 1, 2027 if statutory timing and levy-transfer rules are met; adding that amount would raise projected conservative revenues to about $2.2 million per year.

The manager outlined likely city operating costs tied to providing services to the annexed area. Using conservative assumptions, staff identified potential ongoing positions and cost estimates: up to seven firefighters ($135,000 each, estimated $945,000–$1,000,000 total), two street department positions (~$200,000), one planner (budgeted at about $110,000 and already included in staffing discussions), one code-enforcement staff member (~$80,000) and two police officers including outfitting (~$280,000). The manager presented a rough scenario in which those recurring costs total about $1.67 million, leaving a modest projected surplus (roughly $130,000) against the conservative revenue estimate; the manager noted additional capital and equipment costs — for example street and police vehicles or specialized mowing/striping equipment — could reduce that surplus.

Staff also discussed risk factors: the Dairy Gold tax case was raised as an example of an unanticipated tax liability; the manager said the county assessor reported no similar tax appeals in the city or UGA currently on the horizon. The manager emphasized the numbers were intentionally conservative and that one-time development fees and other nonrecurring revenues were excluded from the presentation so the council would consider sustainable recurring revenues for budgeting decisions.

Councilmembers asked questions about timing, how development could push the population over 10,000, and wastewater impacts if major employers leave the community. Staff said they will continue to refine figures and return with additional details at a future meeting.

Speakers included the City Manager and multiple councilmembers who asked clarifying questions. The item was informational; no formal action was taken.