Olympia City Council divided on initiating the Southeast UGA annexation process 


Olympia City councilmembers wanted to hit the stop button on the southeast annexation conversation, saying there is no compelling case to pursue the initiative.  

At the Tuesday, December 5 meeting, the council was supposed to vote on approving a resolution authorizing City Manager Jay Burney to negotiate an interlocal agreement with Thurston County and other affected local governments regarding the annexation of Olympia's Southeast Urban GrowthArea (SE UGA).  

However, the councilmembers did not take a vote nor take definitive action on the SE UGA proposal after Mayor Cheryl Selby proposed pausing the decision and directing Burney to have further conversations with the county to get their input before the council revisited the issue at a future meeting.  

Community Planning and Development deputy director Tim Smith presented the resolution to the city council to initiate negotiation of an interlocal agreement and begin the annexation process through ILA.  

Smith explained how annexation relates to a city expanding its boundaries and incorporating new lands. He noted that this process falls within the framework established by Washington's Growth Management Act, adopted in 1990. The GMA was intended to control sprawl by focusing growth within designated urban areas, with cities recognized as the residents' primary providers of urban services.  

The area being considered is currently home to around 8,000 residents. The population is projected to grow significantly to 8,900, with 3,810 housing units by 2045.  

CP&D Deputy Director Tim Smith described that the southeast area being proposed for annexation has a population of around 8,000 and is projected to grow to 8,900 by 2045.
CP&D Deputy Director Tim Smith described that the southeast area being proposed for annexation has a population of around 8,000 and is projected to …

Over the last 30 years, Smith added, Olympia has made significant infrastructure investments in extending sewer and water lines and acquiring parkland, with the expectation that the area would eventually become part of the city.  

Studies were made to conduct a fiscal analysis of the annexation and its impact on the city's general fund over 20 years.  

Smith explained the city's arguments for potentially wanting to annex the area, such as investments already made in infrastructure and ensuring new development meets city standards. He described the different methods of annexation and focused on the proposed interlocal agreement approach, noting it would make the city eligible for a state sales tax credit estimated at $3.1 million over 10 years. 

During the discussion, Councilmember Dani Madrone noted that neither the Land Use and Environment Committee nor the Finance Committee had recommended supporting the annexation moving forward when it previously came before them. 

Madrone added she does not support moving forward with assigning staff to begin negotiating an interlocal agreement with Thurston County, which she believed was barely aware of the initiative. She noted that the county commissioners had stated that the annexation proposal had only been mentioned in passing to them previously.  

"We will start doing community outreach on it before even knowing whether or not the county wants to come to the table. The county might want to do its studies to be prepared for negotiating with us, and they haven't had that opportunity. And at this point, they're not planning on entering this process with us next year. They don't have it in their budget. They don't have staff time dedicated," Madrone said.  

Councilmember Lisa Parshley agreed with Madrone not supporting moving the SE UGA annexation process forward. She referenced the city's recent budget process and projections about future fiscal years.  

“Fiscally, this is not a good move,” Councilmember Lisa Parshley said of the proposed SE UGA annexation process, as she demonstrates the potential gap that grows between expenditures and revenues.
“Fiscally, this is not a good move,” Councilmember Lisa Parshley said of the proposed SE UGA annexation process, as she demonstrates the …

Parshley, who also sits as Finance Committee chair, noted that watching the budget development made it clear that the city struggled to balance the 2024 budget. The presentation also showed that 2025's budget outlook would be even more challenging in 2026 unless other revenue sources were identified, or costs reduced.  

"Fiscally, this is not a good move… As the chair of finance, I would like to see a pause on this until another date, maybe next fall, when we have a clearer idea of what the 2025 budget would look like and how we're going to address the deficits that Aaron has repeatedly shown us that gap that grows between expenditures and revenues until we know what to do about that," Parshley underscored.  

Mayor Pro Tem Clark Gilman said he does not see a compelling case for moving forward with annexation, given the financial projections and lack of requests from UGA residents. 

"I think it would make the most sense to wait until the density and the existing southeast part within the city limits start to grow so that we feel like that will become part of the city. I think it's stable as it is right now. I don't see the case for moving forward on annexation," Gilman said.  

Councilmember Jim Cooper supports the resolution to open a conversation with the county to see what negotiations might yield.  

He also mentioned the equity issue of UGA residents paying similar taxes but receiving fewer services.  

Selby pointed out that the city is not on a timeline for negotiations to be completed if they were to begin the process. "If we don't start, we risk losing the state's tax incentives to do this." 

In the September city council study session, Smith explained that HB 1425 allows the city to receive a credit of 0.1% of the current 6.5% state sales tax rate collected in the annexation area. The shift of 0.1% of sales tax revenue collected is estimated at around $3.1 million annually from the state to the city for ten years. 

"What this credit does is it fills the gap between revenues and expenses for several years and provides timelines for the city to look at other revenue streams. So basically, it helps us cover this gap… caveats to using this revenue, it has to be used within the annexation area," Smith explained. 

At Tuesday’s meeting, December 5, 2023, Olympia City Council did not take action on a resolution to negotiate an interlocal agreement with Thurston County and other jurisdictions regarding the annexation of Olympia's Southeast Urban Growth Gt Area (SE UGA).
At Tuesday’s meeting, December 5, 2023, Olympia City Council did not take action on a resolution to negotiate an interlocal agreement with Thurston …


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  • Southsoundguy

    Abolish urban growth areas.

    Thursday, December 7, 2023 Report this

  • MartyKenney

    As someone who lives in the UGA I feel strongly AGAINST incorporation. The area is beautiful and has a rural feel that many who live here desire, and it’s a special thing to have so close to the city. The area does not need added services, sprawling Lacey has plenty of services right there on college street. From what I can assume, annexation only opens the door to additional tight-packed housing developments, which is unnecessary, and extra taxes. The county would be better suited to encourage eco villages for a new era of healthy, community oriented living. Not sure what I mean? Ask a millennial if they would rather live in a 2000sq ft house in a development or in a tiny house village on land raising chickens. There are better ways to use our precious rural lands than building developments with quick-to-break houses.

    Thursday, December 7, 2023 Report this

  • Yeti1981

    The UGA is designated for growth. So, it will happen eventually. If you don't want neighbors, don't live where the city is projected to grow. This move is inevitable.

    Thursday, December 7, 2023 Report this

  • jlongley

    I'm just becoming aware of this large UGA segment being considered for annexation in the SE corner of Olympia boundaries. Is it possible to see a graphic/map of the area in question that is viewable, including street names, etc.? This graphic is very low resolution and the details are completely blurred when increasing its magnification.

    Thursday, December 7, 2023 Report this

  • BobJacobs

    What a strange way to run a city. The council was supposed to vote on this, which would have provided "transparency", which would be good -- we'd know where individual members stand on the issue. The council didn't vote, but somehow the issue was sent to staff for work. Is that even compliant with the council's own rules of procedure?

    Sounds like this violates the purpose of the Open Public Meetings Act.

    How can we, the voters and taxpayers, know what is going on, so we can make informed voting decisions?

    Bob Jacobs

    Thursday, December 7, 2023 Report this

  • Southsoundguy

    Marty is exactly right. Small clusters of 1-4 unit buildings surrounded by land used for agriculture would be far more valuable in the long run. These could arise organically if zoning, land use, uga, and other such laws were abolished as they are obstacles to genuine productive use of land. All they do is incentivize gross development and malinvestment of capital. Take the development on Littlerock by BHHS: was that truly the best use of land? It’s essentially an apartment complex spread over a large area with overpriced mass produced units.

    Friday, December 8, 2023 Report this

  • Deanima

    This is an URBAN GROWTH AREA. It has already been decided that this area will be annexed. That's what UGAs are - they are areas that the City and the County have already decided are going to be annexed. The residents in this area are not in a "rural" area. The area is already an urban area, with urban densities. The zoning will not change - it was given an urban level of zoning nearly 30 years ago when it was designated as an Urban Growth Area. Currently, the residents of this UGA receive Olympia utilities, drive on numerous surrounding Olympia streets, consume Olympia parks and recreation amenities, but pay taxes to the County. Almost nothing will change for the residents of the UGA following annexation. Because of existing mutual aid agreements, they will have the same emergency police and fire response, same garbage service, same utilities, etc. One improvement will be that Olympia police will be on tap to respond to non-emergencies, rather than the Thurston County Sheriff, which has less than half of the City's staffing of officers per 1,000 residents. Property taxes will NOT increase, because the County has a huge road tax that the residents will no longer pay. The main change would be that the residents would pay taxes to the City, whose services and amenities they currently use, rather than the County. The Council is making a mistake by not taking this area in.

    Friday, December 8, 2023 Report this