Cost of annexation 'essentially a wash,' mayor says

Cost of annexation 'essentially a wash,' mayor says

August 21st, 2009 by Cliff Hightower in News

File photo

File photo

A projected $2 million in tax revenue collection per year from the proposed annexation areas would cover any costs to the city for additional fire, police, code inspectors and public works employees, Mayor Ron Littlefield said Thursday.

"It's essentially a wash," Mr. Littlefield said.

The city has looked at operational costs and they would be around the same numbers as the new $2 million coming in, the mayor said.

As far as capital costs, Mr. Littlefield said the city will need to add three additional fire stations, costing $1.5 million each, in Hixson, Lookout Valley and East Brainerd. The cost of equipping those fire halls would be between $500,000 to $900,000 each, city officials said.

The fire halls are needed anyway, Mr. Littlefield said, and the costs will be covered by city bonds.

He also said the city would need between two to three additional code inspectors, one more garbage truck and one more recycling truck.

But an opponent to annexation said Thursday the math "just doesn't add up."

"That's the fuzziest math I've seen," said Kyle Holden, president of Hamilton County Residents Against Annexation. "Even without the garbage trucks and additional people, it's $6 million."

Under Mr. Littlefield's numbers, 100 percent of the taxes from the annexed areas would be devoted for three years to paying for fire stations alone, he said.

Scott Bishop, an opponent to annexation who lives in Stonewall Farms, said he thinks the city is clueless about the costs.

"They really don't know how much this is going to cost," he said. "I can't stress that enough."


Dan Johnson, chief of staff for Mayor Ron Littlefield, said the numbers constantly fluctuate as more information comes in about the proposed annexed areas and the city learns more about what improvements need to be made such as street lighting, fire hydrants and road improvements.

"We're running numbers all the time and that's a work in progress," he said.

Much of the operational costs can be covered by the city's current level of service, Mr. Johnson said.

For example, two fire companies in Lookout Valley can be split, he said. The city is still studying how to put personnel in the Hixson and East Brainerd areas, he said.

Mr. Littlefield said there would be start-up costs after the annexations, but the communities annexed will grown over time, which means additional tax revenue, especially in areas near Volkswagen like Ooltewah.

As an example, the mayor pointed to the Ramsgate development, which used to be a pig farm. Now it is a high-end subdivision with sewers, he said. If the city puts in more infrastructure, it will only mean more revenue, he said.

"Investing in sewers and infrastructure is the best way we can go," he said.

Those sewers also are paid for by user fees and not tax dollars, he said. So, the city would be able to get bonds for any improvements and expansion and pay the bonds back from the user fees, he said.


Councilman Russell Gilbert said Thursday that he is worried the city will spread itself thin by using existing services.

While he hasn't seen a cost-benefit analysis from the mayor's office, he said he does not think the projected $2 million in revenue would pay for all the costs associated with annexation. He listed road improvements, fire, police, garbage, brush collection as being essential and said the money received from the proposed annexed areas would be a "drop in the bucket."

"You need to take care of home first before you take care of anything else," he said.

Councilwoman Carol Berz said she has not gotten "a full picture yet," but also knows the figures aren't completed. But what she has seen looks similar to the mayor's portrayal of the cost of annexation, she said.

"I think they've got it down pretty close and it does look like a wash," she said.


* $2 million: Projected tax revenue from proposed annexed areas per year

* $1.5 million: Estimated cost for each of three fire stations the city plans to build to cover the annexed areas

* $500,0000-$900,000: Amount to equip a fire hall

* 3: Additional code inspectors that may need to be hired

* 2: Number of garbage and recycling trucks that need to be bought

Source: City of Chattanooga