The tranquil town of Normandy Park suddenly burst into the news last month with reports of its possible demise as a separate city either through disincorporation or annexation to Burien or Des Moines.

City officials countered that those were not options but placed a levy lid lift measure on the November ballot as way to raise more funds.

The first public meeting to discuss the ballot measure was held Aug. 2. Two more meetings are set for Aug. 20 and Sept. 26. Both meetings are at 7 p.m. in the City Hall gymnasium.

At the Aug. 2 meeting, City Manger Doug Schulze told participants the levy lid lift would raise Normandy Park’s property tax rate from $1.31 per $1,000 of assessed value to $1.60.

The raise would mean the owner of a $500,000 home would pay $12.19 more a month. That works out to $146.23 more per year.

He noted that Initiative 747 limits property tax increases to 1 percent per year without voter approval while inflation is rising by 3 percent per year. Flyers passed out at the meeting indicated that sine 2002 inflation has gone up 26 percent while taxes have increased only by 8 percent.

Schulze said Burien and Des Moines charge a $1.60 per $1,000 property tax rate while SeaTac’s rate is $2.88 and Tukwila’s is $2.95. The rates for SeaTac and Tukwila include funding for their own fire departments while Normandy Park, Burien and Des Moines pay a separate property tax rate for county fire departments.

Property tax restrictions hit Normandy Park especially hard since property taxes account for about 60 percent of the city’s tax revenues. Most cities receive about equal shares of revenue from property, sales and utility taxes, according to Schulze.

The loss of tax equalization funds from the state also has hit Normandy Park, Schulze said. Before 1999, cities like Normandy Park who did not receive much in sales taxes from businesses would receive equalization funds from the state.

A couple audience members suggested the city lobby the state to get the sales tax equalization reinstated.

Schulze noted the City Council has formed an economic development committee headed by Councilmember Susan West, a former TV reporter, to seek new businesses and enhance existing businesses.

He added that Normandy Park does not have room along First Avenue South for car dealerships, furniture stores or department sources that would generate a lot of sales tax revenue. Restaurants do bring in a fair amount of sales tax, Schulze said.

An audience member advocated revenue sharing between cities. He said when a Normandy Park resident buys something in another city, that city should rebate part of the sales tax back to Normandy Park.

Normandy Park’s financial problems were first revealed in a 1998 study but the council only implemented a few of the study’s recommendations, Schulze reported.

A series of state tax-cutting initiatives resulted in Normandy Park losing $1 million a year in revenue, he said. Residents annually saved almost $1,600 from the tax cuts.

However, between 2000-2007 a strong economy meant Standard and Poor’s upgraded Normandy Park’s credit rate by 3 points, Schulze said.

In 2008 when the recession hit, “it was like falling off a cliff for the city’s revenues,” Schulze declared.

While the city had a goal of keeping a general fund balance of $1 million, the reserves have been depleted down to $30,000 and are projected to be gone in three years, according to Schulze.

Schulze added that one bright spot is that the city has very little debt.

City officials have taken a series of measures to change the city’s financial position, according to Schulze.

These include reducing staffing by 33 percent, deferring maintenance and equipment replacement, contracting out services and collaborating with other jurisdictions.

Other measures are also being considered, he said.

“At some point, it is up to the taxpayers of Normandy Park to decide what level of service they want,” Schulze concluded.