The issue of annexation did not come to an end with the certification of the general election results on Nov. 24. The measure, which included a shared assumption of Kirkland’s current debt, was rejected by the Proposed Annexation Area (PAA) neighborhoods of Finn Hill, North Juanita and Kingsgate by the slimmest of margins.

But Kirkland Mayor James Lauinger asked city staff to prepare a resolution for a vote at the next Kirkland City Council meeting on Dec. 15 to accept annexation without the assumption of debt, during a special study session on Dec. 1.

“My hope was that we could get 60 percent (of the vote so they would) take on the debt but it certainly was not a condition in my mind as to whether or not we approved annexation,” said Councilmember Mary-Alyce Burleigh.

Normally, annexation without an assumption of debt needs a simple majority. Annexation with an assumption of debt requires a 60 percent approval.

The final vote totals were 6,291 for the measure and 4,205 against. The difference was as close as it gets, at just 0.06 percent. It would have taken just seven votes to switch from no to yes, or 16 additional yes votes for passage.

About 317 people did not vote on the debt issue.

“We missed by seven votes,” Annexation Yes Committee chair Johanna Palmer told the council during the public comment portion of the meeting that followed the study session. “I am now here to ask for the seven votes that can make a difference and you are those seven votes.”

Six people addressed the council, including Palmer, about the potential annexation vote.

“The budget crisis that the city of Kirkland is currently undergoing is forcing essential service cuts for existing residents,” No Annexation chair Scott Brady told the council. “The situation logically precludes the expansion of City of Kirkland services into the proposed annexation area.”

Both Palmer and Brady, along with two others speakers, live in the annexation area.

“The debt needs to be reduced not increased by gearing up for annexation,” said Kirkland resident Bob Styles. “Our debt will go up $2.2 million the first year alone and in 2011 it will be much worse.”

But one speaker was there to lend support.

“The county wants to be a partner … we will help you with the assumption of debt,” said King County Councilmember Jane Hague, representing the council. “I will not place a value on that right now but we understand that it is between $1-2 million.”

Lauinger was quick to reply to Hague’s overture: “We will graciously accept any help.”

But the issue of Kirkland’s overall debt and budget problems were discussed during the study session, including the amount of money that the bonded indebtedness represents.

“I thought our total bonded indebtedness was close to $20 million,” said Asher. “But we are really looking at our voted bonded indebtedness, which is about … $8 million, going down to $7 million.”

The impact of passing annexation without shared responsibility for Kirkland’s current debt will keep the current tax rates for those bonds the same for Kirkland residents. The amount paid in taxes could have dropped with the passage of the ballot measure. If annexation is ultimately approved by the council without the debt portion, PAA residents will pay slightly less than earlier projections.

The indebtedness that is at the root of the conflict pays for two park bonds and two public safety bonds.

“The majority of the of the debt is with 2003 park bonds, which developed parks projects throughout the city,” said Councilmember Dave Asher. “It was for passage of things that aren’t for the PAA. They are going to use our parks anyway as do people from Seattle, Redmond and all over and the dollar amount is not that much.”

The city is looking at different ways to fund the annexation transition costs if the council votes to approve the resolution. One of the ideas floated is to try and get the state sales tax incentive early, which officials say is unlikely. Another is to use funds set aside for public safety modifications. The funds for public safety had been set aside since city staff did not know if the funds would go towards covering the cost of current Kirkland public safety modifications or go towards expanded public safety modifications thanks to an annexation.

The legal issues concerning the council approving annexation are varied. City Attorney Robin Jenkinson confirmed that by state law the council has the right to approve annexation since the vote was well over 50 percent. Bu council’s vote for annexation must take place “within a reasonable amount of time,” so that the PAA’s voting results could still be deemed acceptable. The council also had the right to call for another citizen vote on annexation at an estimated cost of $50,000 to $80,000. That process would not have to go back through the Boundary Review Board as long as the boundaries were not changed. The council could also pass a resolution accepting annexation with no further ordinance to set annexation in motion, leaving the rest of the work to the next council.