What is Annexation?
Annexation is the process of expanding the City limits to include properties currently outside the City, but located in the City’s Urban Growth Area (UGA).
The UGA is the area surrounding the City where urban development is planned to occur. The boundaries of the urban growth area were set in 1983 and reaffirmed in the early 1990s through a public process that involved the citizens and property owners of both Olympia and Thurston County. Annexation beyond the Urban Growth boundary is prohibited by State law.
There are currently no pending annexations.
Tax, Rate and Fee Changes
Following annexation, the overall difference for the average homeowner will be minimal because there are increases AND decreases to certain taxes, rates and fees. View the sample costs below. Actual costs will vary depending on individual circumstances.
- Property taxes will decrease after annexation to the City.
- For a home that is assessed at $200,000, the savings in property taxes following annexation would be about $85 per year.
- View the Property Tax Comparisons Table for a complete breakdown of how your taxes might change after annexation.
- Private well owners are not required to connect to the City of Olympia. However, if a well fails in the future, connection may be required.
- Private water systems would not be required to transfer to the City.
- Newly annexed residents who already receive City water, but who have not signed an annexation agreement with the City, will no longer be billed a monthly water surcharge, resulting in a savings of approximately $10 per month.
- On-site septic system owners are not be required to connect to the City’s wastewater system.
- If a septic system fails in the future and the parcel is located within 300 feet of an existing City wastewater line, connection may be required. This connection requirement also applies to the City’s Urban Growth Area, so it is not affected by annexation.
- New onsite systems are not allowed in the City with the exception of lots greater than one acre.
- Wastewater Utility fees are charged only to parcels connected to the City wastewater system. Fees will not change as a result of annexation.
- The City does not regularly extend new sewer lines into existing neighborhoods. If extensions were to occur in the future, the cost of the extension would be paid by the Wastewater Utility rather than residents. The Utility does provide a voluntary cost-share program for neighborhoods that seek to extend wastewater systems to their areas.
Garbage & Recycling
- After annexation, residents will be subject to the City’s stormwater management fees.
- Presently, residents in the area are already paying a stormwater fee to Thurston County.
- While the County bills for stormwater management only once a year - as a fee attached to property tax assessments - the City will bill bi-monthly.
- Currently the City’s stormwater fees are higher than the County’s. The County’s average stormwater fee for a single family residence is approximately $80 per year. It is anticipated that the City of Olympia’s fee for 2014 will be in the range of $22 every other month, or about $132 per year.
Gas & Electricity
- Under state law the City is required to allow the current garbage and recycling service provider – Pacific Disposal - to continue for 7 years.
- After about 7 years the City will become the garbage and recycling provider.
- The City does assess a utility tax on private garbage and recycling providers, and it is possible that this tax will be passed to consumers on their monthly bill. The current tax rate is 6%.
- Based on the current Pacific Disposal bi-monthly charge of $47.72 for garbage and recycling, the imposition of the City’s 6% tax could result in approximately a $1.50 per month increase to the average residential customer.
- The City of Olympia assesses a 9% tax on utility providers. For gas and electricity this charge is assessed by the City of Olympia to Puget Sound Energy.
- Thus, newly annexed residents can expect as much as a 9% increase on their gas and electric bills.
- The City of Olympia assesses a 9% tax on telephone service carriers.
- Just as with the increases in gas and electricity, newly annexed residents should expect to see this change reflected in their telephone bills as the carriers pass this tax increase on to customers.
- Because Thurston County and the Cities of Olympia, Lacey and Tumwater have a joint franchise agreement with Comcast for cable services which imposes a 5% franchise fee on Comcast’s gross revenues, there should be no difference on cable bills following annexation.
- Satellite and dish services are not subject to the City’s 5% franchise fee.
- You can find the City’s regulations for Cable Communications Franchises at Chapter 5.15 of the Olympia Municipal Code.
Business & Occupation Tax
- After annexation you will see a $20 increase in your vehicle licensing costs. This $20 is an annual fee assessed per vehicle to fund the Olympia Transportation Benefit District.
- Transportation Benefit Districts (TBDs) were authorized by the Legislature in 1987. The Olympia TBD was established by the City Council in December 2008. TBDs are used by cities and counties across Washington State to fund local transportation projects. Learn more about projects funded by this tax at olympiaTBD.com
- After annexation, businesses will be required to pay a Business & Occupation (B&O) tax.
- B&O taxes apply to every type of business, including manufacturing, wholesale, retail, extraction (timber harvesting, etc.), printing, etc.
- Retailing, printing, wholesale, manufacturing and extracting activities are taxed at one-tenth of one percent (0.1%) of gross income. For example, $1million of taxable activity would equate to $1,000 in B&O tax.
- Service-based activities are taxed at two-tenths of one percent (.2%) of gross income, which means that $1million of taxable activity would equate to $2,000 in B&O tax.
- Certain businesses may be exempt from B&O taxes, such as non-profits, credit unions, Health Maintenance Organizations, etc.
- If you would like to see what category your business is, or would simply like to know more about the City’s B&O tax, please see Chapter 5.04 of the Olympia Municipal Code (OMC) or visit our B&O Taxes page.
- The City requires all businesses operating within or doing business within the City limits to obtain a business license. City business licenses are obtained through the State of Washington, Department of Revenue.
- The initial cost to obtain a business license is $80. The cost of a business license renewal is $30 per year.
- Home Occupations: Home Occupations are required to obtain a business license. Unlike the County, the City does not require you to obtain a separate Home Occupation permit. Since the County’s current base application fee for Home Occupation permits is $1835, residents wishing to start a Home Occupation will save this amount after annexation.
- The City’s rules regarding business licenses can be found in Chapter 5.02 of the Olympia Municipal Code (OMC). For more information visit our Business License page.
Frequently Asked Questions
Does annexation affect zoning?
Will my child's school change?
No, zoning stays the same after annexation. The County has already adopted the City’s zoning for the entire urban growth area.
Will this change what I can vote for?
There is no effect on schools. School district boundaries are independent of city boundaries.
Will police services be different?
After annexation, you still vote for the Thurston County Commissioners, and you will be also be able to vote in the elections for Olympia City Council.
Will fire services be different?
After annexation, primary response is provided by the Olympia Police Department instead of the Thurston County Sheriff’s Department. Olympia has two times as many officers per thousand residents than Thurston County. The City of Olympia provides 1.33 commissioned officers per thousand residents. Thurston County provides 0.60 commissioned officers per thousand residents. (Source: Crime in Washington: 2011 Annual Report, Washington Association of Sheriffs and Police Chiefs)
Will my garbage pickup be affected?
Emergency fire and Medic One services won’t change. Because of mutual aid agreements between the City of Olympia and the Fire Districts, the City of Olympia already provides emergency response for your area.
Can I keep my livestock?
Your current provider may continue to serve your area for seven years. After seven years Olympia will become your provider unless the current provider elects to discontinue service before that time.
The City of Olympia allows livestock and other urban agriculture land uses. Visit our Urban Agriculture page for for information.
Am I required to hook up to City water/sewer?
Will the City maintain and pay for my streetlights?
No. You may continue to use your well and septic system after annexation. Annexation does not trigger any hookup requirements. In the event your well or septic system fails, being part of the city may allow you to connect to city water or sewer at a lower cost.
Can I burn tree limbs and other yard debris?
The City will take responsibility for the maintenance and electricity costs for County owned streetlights and for those systems that are up to current standards. The City does not assume responsibility for streetlights owned by PSE, a homeowners/neighborhood association, or a private individual/business.
Does development stop if annexation is denied?
No. The current restrictions on outdoor burning will continue. Outdoor burning is regulated by the Olympic Region Clean Air Agency. Per their regulations, burning is not allowed in urban growth areas or the cities in Thurston County, including the Boulevard/I-5 area proposed for annexation. For more information on this burn ban contact the Olympic Region Clean Air Agency. http://www.orcaa.org/
No. Approval or denial of an annexation does not affect whether a development can be initiated or continue. In the event of a denial, a developer may be required to sign an annexation agreement for access to City water or sewer.
Contact Todd Stamm at 360.753.8597 or email@example.com