TischlerBise has extensive experience 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. The following are recent examples of Annexation Proposal Evaluations conducted by TischlerBise:
Germantown, Tennessee
The City of Germantown contracted with TischlerBise to evaluate the fiscal impact of annexing two different subareas adjacent to the current municipal limits. TischlerBise additionally evaluated the fiscal impact of various land use scenarios within the current municipal limits on the City’s operating and capital budgets. The four growth scenarios evaluated within the existing City included a Trends scenario, a Higher Density, and two Nonresidential scenarios which assumed increased City success at capturing office development.
An analysis of developable land area by the City for Annexation Subarea B estimated that the remaining developable land had the potential to yield 349 additional single-family units. Two growth scenarios were evaluated for this subarea: Current Trends and Faster Absorption. Annexation Subarea D consisted of five large parcels that could accommodate 5.8 million square feet of office space and 2.7 million square feet of retail activity. Because it was optimistic to assume that all 5.8 million square feet of office space could be absorbed by 2020, three other office absorption scenarios were developed assuming the absorption of 75%, 50% and 25% of the by-right office space. City is in the position to subsidize annexation if necessary.
Kissimmee, Florida
TischlerBise’s fiscal impact of annexation analysis for the City of Kissimmee included three uniquely different annexation areas. Within each annexation area, two scenarios – a base case and an optimistic scenario – were evaluated. In addition, for each scenario there were two development time schedules: trends and slower development. Annexation generates net revenues in all three sub areas although the magnitude is quite different.
Wilmington-New Hanover County, North Carolina
TischlerBise (then Tischler & Associates) evaluated the fiscal impact of providing public services. Impacts were evaluated for Countywide services (provided by New Hanover County), Urban services (provided by the City) and Nonurban services (County provided service costs that decrease with a loss of unincorporated County). In addition, for certain facilities and services, the impact of a higher service level was evaluated.
The analysis shows that the City of Wilmington benefits from existing economies of scale that allow the provision of urban services to contiguous geographies inside unincorporated New Hanover County. The County, which was not in the position of providing services at an urban scale, also benefited from annexation of portions of the unincorporated County. This is because certain revenue still accrue regardless of development being located in the City or unincorporated County, without the commensurate costs.