POULSBO — Poulsbo’s favorite “annexation tool” may be lost for good but that’s not going to stop its construction efforts in surrounding areas, city officials confirmed Wednesday.

When the state Supreme Court did away with the petition form of annexing last month, city planners throughout Washington cringed at their remaining growth options. The petition method was easy, popular, reliable and provided municipalities a “hammer” of sorts when extending and connecting services beyond their cities’ limits.

Now, it’s also illegal.

As Poulsbo nears the completion of its Urban Growth Area, City Planner Glenn Gross anticipates problems arising with the allowed election method of annexation. The system does not allow the city and property owners to ink utility agreements in which citizens agree to annex into Poulsbo if water and sewer connections are offered.

“Your major tool (in annexation) is water and sewer. Should you do it without that hook?” City Attorney Scott Snyder asked the city council Wednesday night.

While the group wasn’t sure if it would or wouldn’t disallow future hookups to non-city residents, members did direct Finance Director Donna Bjorkman to crunch the numbers and provide best and worse case scenarios.

Time is of the essence, she pointed out, noting that a council decision on the issue will have a huge impact on Poulsbo’s ability to budget a $1.5 million project on north Viking Avenue. Construction work is already underway to connect piping to a new well near Snider Park and eventually provide city water and sewer service to the Olhava development property.

Bjorkman said while Poulsbo is negotiating with an underwriter for revenue bonds that will finance the project over the next 20 years, council must also realistically consider offering services to nearby non-city residents to offset some of the expense as well.

“If we extend the utilities up Viking are we going to allow these people to hook up?” she asked. “If (the council does) that they will be rate payers at least.”

They don’t, however, have to annex and become city residents, paying taxes and additional fees to Poulsbo though.

“If we extend our services and they don’t hook up a lot of money that should be coming in will go to the county, instead,” she said. “I’m trying to sharpen my pencil but either way there is going to be a cost born by the utilities.”

Viking Avenue is just the tip of the iceberg though, according to Gross, who warned that offering utilities without incentive to annex can have serious ramifications.

Explaining his previous job in Clark County, Gross said Vancouver lost large amounts of money when it connected commercial parks and residential developments outside the city limits without an annexation agreement.

“All that time and all that revenue was lost because there was no incentive to annex into the city,” he explained. “Even though they’re in the Urban Growth Area, they still don’t have to annex. If we extend our services we have no guarantee that they’ll annex in.”

Wanting to keep the thought pool swirling instead of stagnating, Councilman Ed Stern suggested that Bjorkman run the numbers and give the city some solid advice before a final decision is made on the matter.

“Let’s not speculate,” he advised. “If we speculate, I’m concerned that we’ll lose time on our construction season.”

While Stern and others on the Poulsbo Finance Committee had discussed the possibility of creating a new-style annexation contract between the city and potential residents, Snyder quickly pointed out that this, too, would be viewed as illegal under the law.

“How do we develop a binding or non-binding agreement?” Stern asked.

“You can’t tell someone how to vote,” Snyder said, noting that attorneys throughout the state were scratching their heads over the problem.

Even so, Gross said the annexation problem would not impact plans to build a branch campus of Olympic College at Olhava. He still viewed the loss of the petition method as a “major problem.”

Nonetheless, it’s a problem the city must face — and in the near future.

“Council needs to make a decision on the Viking Avenue project very soon and whether they’re going to do it or not,” Bjorkman said, noting that the bonds had to be secured.

Despite all the concerns and impending time lines, Stern said he felt the city council and its department heads were definitely up to the challenge.

“This isn’t really a problem — this is what we’re here for,” he remarked.