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| Annexation Proposals |
TischlerBise has extensive experience in evaluating the fiscal impacts of annexation proposals. While it is generally fairly easy to calculate the additional revenues accruing from annexation, it is usually much more difficult to ascertain the fiscal impacts of providing City levels of service to an annexed area. Among the firm's recent studies have been the following:
Germantown, Tennessee Annexation Proposal Analysis
TischlerBise's marginal cost analysis showed that new growth within the City of Germantown pays for itself because of the available capacity of existing capital facilities and high assessed values of new development. However, if the City is to annex one area, it may require a subsidy from revenues generated by new growth within the City or the existing City development base. This subsidy will occur unless new revenue sources are found, existing rates increased, or different zoning is put in place. This is also true in the short-term for the second annexation area, although this area does generate an average annual net surplus over the long-term under all four scenarios.
Since the analysis shows that new growth within the City pays for itself, the City has the ability to subsidize annexation in order to exercise its control over future land uses around the City. In addition, because of the amount of vacant land in each of the areas, the City has the opportunity to tailor a zoning plan that could produce dramatically different results. For example, because of situs-based sales tax in the State of Tennessee, a major retail use could produce positive fiscal results in one annexation area.
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Kissimmee, Florida Annexation Proposal Analysis
Growth is continuing to occur on the western boundary of the City of Kissimmee, Florida. Given this continuing development, including a proposed mixed-use convention center development, the potential for the City to annex will diminish over time.
TischlerBise's marginal cost fiscal impact analysis for the City included three annexation areas, or fiscal analysis zones (FAZs). Each of these annexation areas is unique. For example, FAZ 1 is vacant land, where the proposed mixed-use convention center is proposed, FAZ 2 is largely developed, but has the potential to accommodate a limited amount of new development, and FAZ 3 is largely undeveloped. Within each FAZ, two scenarios were evaluated, a base case and an optimistic scenario. In addition, for each scenario there were two development time schedules: trends and slower development.
The analysis concluded that annexing any of the three FAZs would result in net revenues to the City. However, FAZ 1 produces the best result because of the scale of development contained in the proposed mixed-use project and associated off-site development. FAZ 2 produces the second best result because of its large existing taxable base ($456 million), which is 44% of the existing City base. FAZ 3 produced the third best result because revenues received from the existing development base are not enough to cover the up-front operating costs incurred for Police protection and Road maintenance.
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Wilmington-New Hanover County, NC Annexation Proposal Analysis
In Wilmington-New Hanover County, North Carolina TischlerBise evaluated the fiscal impacts to the City of annexing three areas in New Hanover County and the fiscal impact to the County of providing urban and nnon urbanservices to areas outside of the City of Wilmington. In addition, the impacts to the County of providing improved levels for selected urban and nnon urbanservices were evaluated.
The firm's analysis concluded that both the City and County benefit from the City providing urban services to the urbanizing areas of the unincorporated County. A major reason is the cost economies enjoyed by the City. A second major reason is the County no longer has to provide certain services but receives the same tax revenue.
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Deerfield Beach, Florida Annexation Proposal Analysis
Deerfield Beach, Florida is located in Broward County, in the Miami/Fort Lauderdale metropolitan area. Because Broward County has decided it will no longer provide urban services after 2010, municipalities in the County must annex the remaining unincorporated area. Therefore, the City retained TischlerBise to evaluate five scenarios for four different annexation areas.
Our case study-marginal annexation analysis prepared in Deerfield Beach evaluated four different development scenarios in four individual annexation areas. The analysis showed that only Zone 1 produces net revenues, a pattern of annexation from west to east is preferable, and a slow pattern of annexation will allow the City to possibly reconfigure its revenue structure, which would enable it to consider annexing the other three zones. As a result of the analysis, the Deerfield Beach City Commission voted unanimously to pursue annexation of Zone 1 because this zone generates the net revenues that the City will need if it contemplates annexing other zones.
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Dublin, Ohio Annexation Proposal Analysis
The City of Dublin, Ohio has a population of over 22,000 persons and is the location to over 28,000 jobs, from which it receives point of employment income taxes. TischlerBise's analysis evaluated high and low growth scenarios within the existing City and for four annexation areas.
The analysis concluded that growth within the City limits generates net revenues because of the amount of nonresidential development and associated income taxes.
It also concluded that all combinations of annexation areas generate average annual net deficits in the first ten years because of the large amount of residential development and the need to extend infrastructure. The analysis raised interesting policy questions such as the City's willingness to subsidize annexation in order to exercise its control over land uses.
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- Germantown, Tennessee
City is in the position to subsidize annexation if necessary - Kissimmee, Florida
Annexation generates net revenues in all three ssub areas although the magnitude is quite different - Wilmington-New Hanover County, NC
Both the City and County benefit from the City providing urban services through annexation - Deerfield Beach, Florida
"The firm did an excellent job and the methodology utilized has resulted in clear direction for our City Commission" - Dublin, Ohio
All the annexation areas have increasingly negative results
Germantown, Tennessee Annexation Proposal Analysis
TischlerBise's marginal cost analysis showed that new growth within the City of Germantown pays for itself because of the available capacity of existing capital facilities and high assessed values of new development. However, if the City is to annex one area, it may require a subsidy from revenues generated by new growth within the City or the existing City development base. This subsidy will occur unless new revenue sources are found, existing rates increased, or different zoning is put in place. This is also true in the short-term for the second annexation area, although this area does generate an average annual net surplus over the long-term under all four scenarios.
Since the analysis shows that new growth within the City pays for itself, the City has the ability to subsidize annexation in order to exercise its control over future land uses around the City. In addition, because of the amount of vacant land in each of the areas, the City has the opportunity to tailor a zoning plan that could produce dramatically different results. For example, because of situs-based sales tax in the State of Tennessee, a major retail use could produce positive fiscal results in one annexation area.
Back to top
Kissimmee, Florida Annexation Proposal Analysis
Growth is continuing to occur on the western boundary of the City of Kissimmee, Florida. Given this continuing development, including a proposed mixed-use convention center development, the potential for the City to annex will diminish over time.
TischlerBise's marginal cost fiscal impact analysis for the City included three annexation areas, or fiscal analysis zones (FAZs). Each of these annexation areas is unique. For example, FAZ 1 is vacant land, where the proposed mixed-use convention center is proposed, FAZ 2 is largely developed, but has the potential to accommodate a limited amount of new development, and FAZ 3 is largely undeveloped. Within each FAZ, two scenarios were evaluated, a base case and an optimistic scenario. In addition, for each scenario there were two development time schedules: trends and slower development.
The analysis concluded that annexing any of the three FAZs would result in net revenues to the City. However, FAZ 1 produces the best result because of the scale of development contained in the proposed mixed-use project and associated off-site development. FAZ 2 produces the second best result because of its large existing taxable base ($456 million), which is 44% of the existing City base. FAZ 3 produced the third best result because revenues received from the existing development base are not enough to cover the up-front operating costs incurred for Police protection and Road maintenance.
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Wilmington-New Hanover County, NC Annexation Proposal Analysis
In Wilmington-New Hanover County, North Carolina TischlerBise evaluated the fiscal impacts to the City of annexing three areas in New Hanover County and the fiscal impact to the County of providing urban and nnon urbanservices to areas outside of the City of Wilmington. In addition, the impacts to the County of providing improved levels for selected urban and nnon urbanservices were evaluated.
The firm's analysis concluded that both the City and County benefit from the City providing urban services to the urbanizing areas of the unincorporated County. A major reason is the cost economies enjoyed by the City. A second major reason is the County no longer has to provide certain services but receives the same tax revenue.
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Deerfield Beach, Florida Annexation Proposal Analysis
Deerfield Beach, Florida is located in Broward County, in the Miami/Fort Lauderdale metropolitan area. Because Broward County has decided it will no longer provide urban services after 2010, municipalities in the County must annex the remaining unincorporated area. Therefore, the City retained TischlerBise to evaluate five scenarios for four different annexation areas.
Our case study-marginal annexation analysis prepared in Deerfield Beach evaluated four different development scenarios in four individual annexation areas. The analysis showed that only Zone 1 produces net revenues, a pattern of annexation from west to east is preferable, and a slow pattern of annexation will allow the City to possibly reconfigure its revenue structure, which would enable it to consider annexing the other three zones. As a result of the analysis, the Deerfield Beach City Commission voted unanimously to pursue annexation of Zone 1 because this zone generates the net revenues that the City will need if it contemplates annexing other zones.
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Dublin, Ohio Annexation Proposal Analysis
The City of Dublin, Ohio has a population of over 22,000 persons and is the location to over 28,000 jobs, from which it receives point of employment income taxes. TischlerBise's analysis evaluated high and low growth scenarios within the existing City and for four annexation areas.
The analysis concluded that growth within the City limits generates net revenues because of the amount of nonresidential development and associated income taxes.
It also concluded that all combinations of annexation areas generate average annual net deficits in the first ten years because of the large amount of residential development and the need to extend infrastructure. The analysis raised interesting policy questions such as the City's willingness to subsidize annexation in order to exercise its control over land uses.
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About Annexation Proposals
It is generally fairly easy to calculate the additional revenues accruing from annexation, it is usually much more difficult to ascertain the public sector costs.