A week after Chehalis City Council members voiced their concern with voting on the potential annexation of the urban growth area (UGA) without having complete financial and population numbers, City Manager Stacy Denham provided a “conservative” answer to their questions Monday.
Denham told councilors during last week’s special meeting that he did not want to jump the gun on giving out numbers the city couldn’t back up, referring to the population of the UGA, the costs the city will pay, and the revenue streams the city will see.
He prefaced the reading of the numbers Monday by saying they are preliminary and conservative, but still numbers the city could defend.
For population, city staff used 2020 census data and assumed population growth to determine the amount of residents in the UGA.
“It appears that the population growth is gonna be approximately 2,200. So in that case, it should put us right around 9,600 population,” Denham said. “Now, that may grow a little bit because there’s been some changes out there, without spending the money for a full-blown census, which is going to occur, but I don’t think it’s going to grow so much where it’s going to be well beyond that.”
Denham said he anticipates that the population may grow by a couple hundred extra people, closer to what the city expected the population growth to be at around 2,500.
Additionally, the city manager provided conservative dollar amounts for the potential costs and the revenue streams. Starting with the revenue, property taxes would bring in $1.3 million annually, but that number would change with further development, according to Denham.
He also provided average sales tax numbers.
“The sales tax was looked at in 2022, and it was the same as we looked at it in 2024, so two-years difference. Roughly, it was just over $500,000,” Denham said. “So that brings us [a total] of about $1,800,000 in revenues coming in. Then again, that’s conservative numbers. The number that’s not in here is the EMS levy, which is if the City of Chehalis annexes and the EMS levy goes out to the UGA.”
Denham told the council to keep in mind that in 2026 the EMS levy would not transfer over to the annexed area. Since the city didn’t annex by Aug. 1, the districts retained their EMS and fire levies in their respective jurisdictions for the 2026 calendar year.
“However, the City of Chehalis, if we haven’t merged any of our fire departments — but under a functional merger like we’re talking about, it would still apply — on Jan. 1, 2027, our EMS levy would then take hold in the UGA that’s been annexed,” Denham said. “If that happens, it’s roughly $317,000 or $320,000. That’s what the increase would be, which would raise the revenue, on a conservative basis mind you, to $2.2 million, roughly.”
As for potential costs, Denham said some of the numbers will be dependent on what happens with the potential merger of the Chehalis Fire Department and Lewis County Fire Districts 5 and 6.
“Talking to [Chehalis] Chief [Adam] Fulbright, what he’s looking at is potentially staffing up to approximately seven firefighters. Again, I’m going to give you the worst possible scenarios as far as costs,” Denham said. “With that, those firefighters cost us about $135,000 each. If you add those together, it’s roughly $945,000. I estimated high and went $1 million for all seven.”
Annexation would likely require the addition of two street department personnel, which would cost about $200,000 annually for the two. If annexation moves forward and the city takes on all permitting, the city may have to hire a planner, which is already budgeted but is a position that hasn’t been utilized. A planner would cost roughly $110,000, Denham said.
Denham said a code enforcement person would run about $80,000. Additionally, the city may hire two more police officers, which would cost $208,000. In total, the city estimates a total cost of $1,670,000.
“That’s going to be the high side for what those costs would be for those folks. That would leave us with a positive of about $130,000 in the black,” Denham said. “However, we also recognize there’s some things that may have to be purchased because of taking on that kind of territory.”
Denham said he will present more detailed numbers at the next city council meeting, which is scheduled for Oct. 13.
Full annexation maps can be found on pages 123 and 124 of the council’s April 28 meeting at https://tinyurl.com/4b8tmdj8.
