SEQUIM — The creation of a metropolitan park district to support the Sequim Aquatic Recreation Center will allow a newly elected board to levy a permanent property tax without voter approval.
A measure to create such a district to fund the recreation center at 610 N. Fifth Ave., which includes the city’s only public pool, will appear on the primary election ballot Aug. 4.
Ballots in the all-mail primary election will be mailed to registered voters in the existing Clallam County Parks and Recreation District No. 1 on July 15. The election ends at 8 p.m. Aug. 4.
If approved, the new park district — which is expected to replace the existing parks and recreation district — would solely fund the recreation center, known by the acronym SARC.
The jurisdictional geography is the same: the Clallam County area of the Sequim School District.
Up to 75 cents
“A metropolitan park district has the ability to levy up to 75 cents per $1,000 of assessed valuation,” said attorney Craig Miller, who represents Citizens for SARC, which led a petition drive to get the measure on the August ballot.
“And once levied, that is a permanent levy. It does not go to a further public vote once it is levied.”
SARC is now funded through Clallam County Parks and Recreation District No. 1, a junior taxing district formed in 1988.
While the existing recreation district and proposed metropolitan park district are both junior taxing districts, only the latter can unilaterally create a tax without voter approval.
“They have different taxing authorities,” Miller said.
“The parks and recreation district can only raise money through [a levy approved by voters] or through the sale of bonds.”
Conversely, a newly created metropolitan park district board — candidates for which will also appear on the Aug. 4 ballot — can create a new tax at will.
The Aug. 4 ballot measure proposes a property tax levy of 12 cents or less per $1,000 of assessed valuation — the same amount voters failed to approve in a levy election in February.
Dissolve board?
And while both park districts can legally coexist in the same territory at the same time, Frank Pickering, SARC board chair, said he believes the current SARC board would vote to dissolve itself and turn over all assets to the newly created metropolitan park district board.
“It will eventually cease to exist,” he said of Parks and Recreation District No. 1.
The new metropolitan park district board would also have to vote to accept the assets from the SARC board, Miller noted.
Parks and Recreation District No. 1 ceased to collect taxes in early 2003 after voters failed to ratify various levies floated by the SARC Board of Directors at the dawn of the new millennium.
Reserve funds
For the past 12 years, SARC has relied on reserve money collected through the first 14 years of its existence.
But it expects to run out of funding by December 2016, with reserves expected to fall below $350,000 by the end of this year.
“When the facility was first built, they asked for 15 cents per thousand [dollars of assessed valuation],” said Scott Deschenes, SARC executive director.
Adjusted for inflation, that would be the equivalent of 30 cents today, he said.
“[SARC] had a bunch of money in the bank. It is like having a trust fund. We have slowly been eating up that trust fund, [and] it is time to get a job.”
In 2014, SARC had an income of $877,921.80 and expenditures of $1,117,852.64 — which led to a net loss of about $240,000.
That trend is continuing in 2015 with a total income projected to be $935,600 and projected expenditures of $1,209,100 — leading to the potential net loss of about $273,500.
77 percent of costs
According to projections, SARC will be able to recover about 77 percent of operating costs this year with proceeds from the sale of passes, classes and other activities.
“Currently this year, we are running a little less than 1 percent variance against budget,” Pickering said.
“Our history has always been to be within 80 percent coverage, and we don’t vary much from that year to year.”
And such net losses are common at similar facilities across the country, Pickering noted.
“We looked around the country at various pool setups such as this — the multiuse facility where you’ve got exercise equipment and rehabilitation as well as the pool — and most of those run about 65 percent.”
And if authorized by a newly elected metropolitan park district board, the 12 cents per $1,000 valuation of property tax “would more than cover” any net losses at SARC, Pickering concluded.
“We think we have a nice model. It also covers capital funds to do the repairs and updating the facility as needed.”
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Sequim-Dungeness Valley Editor Chris McDaniel can be reached at 360-681-2390, ext. 5052, or cmcdaniel@peninsuladailynews.com.
