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HomeMy WebLinkAbout2002-07-02 - AGENDA REPORTS - ANNEX POLICIES (2)CITY OF SANTA CLARITA u.ryy u� a �T;�►;�u7�iui TO: o Ferry & Councilmembers FROM: 62 An kamp, In er ity Manager DATE: July 2, 2002 SUBJECT: ANNEXATION POLICIES RECOMMENDED ACTION City Council receive report and provide staff with direction on the type of annexation policy, if any, the City should draft for Council approval. Since incorporation, the City has successfully processed 21 annexations, consisting of 10 residential, 8 commercial, and 3 other areas consisting of mixed uses and open space. A full listing of completed annexations is incorporated as Attachment A. Although no set policy is in place, the City's practice regarding annexations has been to approve petitions for annexation, regardless of fiscal implications to the City's general fund. The City prepares a Fiscal Impact Analysis on all annexation requests; however, results of these findings have not been significant in the decision-making process. Briefly, the Fiscal Impact Analysis assumes certain revenues generated for the City in terms of property tax, retail revenues, commercial, and industrial revenues, etc. The Analysis assumes certain expenditures for miles of roadways, acreage of parks, number and densities of housing units, and other factors. Expenditure factors are divided into the entire Operations & Maintenance budget for the City. Anticipated revenues are added to maintenance costs to provide a benchmark for the total fiscal impact of the proposed annexation. Generally, annexations consisting of strictly residential units have a negative impact to the City's general fund, while annexations generating revenues through additional sales taxes have been revenue positive. Among the areas annexed by the City since 1987, few have had positive revenue impacts to the City's general fund. For example, the City negotiated a 5% share of property tax revenue generated from the 781 units in the Copperhill annexation in 1990. At that time, the average annual impact the City was calculated as -$584,042 for the first ten years. This annexation included no commercial units and zero (0) acres of parkland. (See attached Fiscal Impact Summary of Proposed Copperhill Annexation.) In 1993, the City performed a fiscal impact analysis on the Northbridge area. At a 5% negotiated share of property tax with the County, this annexation would generate over $10,321,915 in revenues over the first ten years. As predicted, in years immediately following the annexation, commercial retail activity began, causing a dramatic increase in revenues to the City. Agenda Item: REVENUE NEUTRAL ANNEXATIONS July 2, 2002 Page 2 Research of fiscal annexation policies among several cities in the greater Los Angeles area indicate that cities take other factors into account when evaluating annexation requests. The City of Palmdale adopted a policy which evaluates fiscal impacts but also considers "citywide benefits, which outweigh long-term fiscal costs." The City of Fullerton prepares a fiscal impact analysis on all annexation requests, but cost is not always the only factor. In Fullerton, annexations are decided on a case-by-case basis, and if the area is in Fullerton's sphere of influence, Fullerton feels annexation is the right thing to do. Riverside and Simi Valley evaluate annexation requests on a case-by-case basis. The City of Fontana evaluates annexation requests by their fiscal implications only and have adopted a developer fee to offset costs incurred by annexations. Based on these findings, staff seeks direction from the Council if the City should draft an annexation policy to measure all impacts of annexation requests, or a policy related to financial criteria only. A comprehensive policy would measure all criteria related to planning needs, infrastructure amenities, maintenance considerations, and potential economic development, as well as financial. ALTERNATIVE ACTIONS 1) Direct staff to develop an annexation policy, based strictly on financial feasibility of the proposed area. 2) Direct staff to develop an annexation policy, whereby areas are evaluated on a higher level of analysis, based on specific criteria related to all contributions and impacts to City services. 3) Other action as directed by Council. FISCAL IMPACT There is no fiscal impact associated with this report. However, the primary purpose of an annexation policy is to lessen burdens on the City's general fund, associated with annexations. ATTACHMENTS Attachment A — City of Santa Clarita Completed Annexations Attachment B — Annexation Survey of Cities in Greater Los Angeles Attachment C — Sample Criteria to Evaluate Annexation Impacts Attachment D — Fiscal Impact Analysis of Copperhill (1992) and Northbridge (1993) KRP:TSB:hds Tmy%july2s6 dssin.doc EXHIBIT " k B wlu i k ■ ) \ 2 / \ '8 . 2 § . . { )§ (L /} x.— ^ § §w _ = k § n \ \ ■ E w z LU z w CL w» 3 a / }/ Q § $ E \ \� \� 4- 2 cm x§ 'a E_ ) §g #@ o (n °\ ®\ m E� Q () kE kE E) k §m 2\ 0 x §k im m . >, ) g § 2¥ ;% ;t @% @tw . u w LO In a) \\ \\ /\ \\ � � � � � � }.ke /)_ \ (§ o] \) = f/)\ f/j k \} k 7U) ))\ 2 )/}$ \ )\ \\\\ \/k }ƒ) )) U) LU §a f� § $ �cm ■a c B \� W ( p2IL wp w2 § li E L6_« § I kLU IL\ i - 2 \ \ .. 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(V w O . O O. cz +a r a) GL O k ga�yy) A R O R O m CZ >1 Si r7 L�i� �'+ Sr .� • •� y cli aZ. P4z 4z �. ca m m • z z . z . z cz o -pq � �. cz co A cz U cd Cd o 0 a P, m a r� A a w 0 w 0 w 0 w 0 w 0 w 0 > >1 >1 >1 >1 U U U U U U O v 4, O O O W W m �•' CCi FOi v] ''� i0i U U yV] N :�i w d U ,s�j RS C0.7 O �•- W .N iti G'. V i> 0 y W •H '� ..r .� (� +a N U >N by N cd cz u o b0 . � q cd 0 7y ; 0 c� ii •ti N •� ii '.0.1 'y i'i bA V � N U mcz t !� .M bn (2) cd m •d CE Cd U 3 CJ a O ED A'El m •°° 3 ccz o U W ao ccre Cd `' (ZIt ^C °?W ^C Cd O o a ^C CO U a 'y cd bA N cC tq z O cz Cc) cd O O O R w p H GL R S� o ��°' z z z O O y .N Fla GQ y FQ PLI O O C C C O CJ U U U U U i EXHIBIT "C" *SAMPLE ANNEXATION REPORT *This analysis is in no way intended to be an exhaustive listing of all factors to be considered City of Santa of proposed annexations. This report is to be used Annexation Analysis for discussion purposes only. All numbers listed are Expenditures Category General Government Police Services Fire Services Parks & Recreation Services Planning & Building Services Field Services Library Services Factor Description and Method 800% $ Citywide overhead of Direct Service Costs $125.00 $ Cost per single-family dwelling $300.00 $ Cost per multi -family dwelling $0.99 $ Cost per improved commercial sq. ft. $1.49 $ Cost per improved industrial sq. ft. $5.00 $ Cost per resident $25.00 $ Recreation cost per resident $36.00 $ Per acre Park maintenance $14.00 $ Per acre Open Space maintenance $29.00 $ Per mile trail maintenance $1.53 $ Graffiti abatement - per resident $3.78 $ Code Enforcement - per resident $5.00 $ Building Inspection - per developed sq. ft. $9.10 $ Animal Control costs per resident $2,664.00 $ Road maintenance cost per mile $225.00 $ Street sweeping cost per mile $4,535.00 $ O&M cost per signalized intersection $3,873.00 $ Sidewalk maintenance per mile $1,500 $ Tree Maintenance/replacement $1.19 $ Library costs per resident Transportation & Engineering Services $5,639 $ Cost to add road per mile $12,000 $ Traffic study on proposed area $9,871 $ Installation of signalized intersection *SAMPLE ANNEXATION REPORT *This analysis is in no way intended to be an exhaustive listing of all factors to be considered City of Santa of proposed annexations. This report is to be used Annexation Analysis for discussion purposes only. All numbers listed are Financial Annuai Revenues Annual Expenditures Revenues Category Local Taxes Fines and Penalties Property Taxes State Subventions Commercial Revenues Retail revenues Franchise Revenues Water Services Trash Collection Cable Services Additional Criteria Factor Description & Method $111.11 $ Sales tax per household $57.85 $ Franchise fees pre dwelling unit Infrastructure Criteria related to bring the infrastructure of the proposed annexation up to City standards. Maintenance Specific costs related to providing City services to area. $2.25 $ City code and parking fines per resident $0.00 $ Per $1,000 of Assessed Valuation $39.00 $ Motor Vehicle license fees per vehicle $6.13 $ State Gas Tax reimbursement per resident (per section 2105 - 2107) $0.19 $ per sq. ft. of commercial $0.54 $ per sq. ft. of retail $1.19 $ per unit $0.75 $ per unit $0.56 $ per unit $ Road improvements $ Sidewalk improvement - per sq. mi. $ Annual Slurry/Overlay costs $ Park equipment $ Tree trimming $ Construction costs (more...) $ Parks maintenance - per acre $ Streets maintenance - per sq. mile $ Arborist services $ Trail maintenance (more...) C' *SAMPLE ANNEXATION REPORT *This analysis is in no way intended to be an exhaustive listing of all factors to be considered City of Santa of proposed annexations. This report is to be used Annexation Analysis for discussion purposes only. All numbers listed are Economic Development Existing Industries Evaluation of potential economic Proposed industries benefits associated with proposed $ Amount of potential revenues annexation. (more...) Political Criteria Y/N Strategical Annexation Criteria based upon those factors Y/N Government significance other than financial. These factors Y/N Requested by Citizens indicate annexation alignment with public policy. (more...) Planning Criteria Criteria based upon long-range future planning of the proposed area and its relation with City goals. FIN/Council/0702ssnsmp1rp t.xls Proposed land compatibility Housing information "affordable units" "Senior" units Single-family Multi -family Historical Significance (more...) ..aaa pNYiN VLN611A j ' I N T E R O F F I C E `. M E MO E A N D U M TO: Esther Aguilar, Annexation Consultant FROM: Kwan Beilin, Administrative Assistant DATE: March 26, 1992 SUBJECT: Fiscal Impact Study of Proposed Copperhill Annexation I have completed the fiscal impact study for the proposed Copperhill Annexation No. 1990-06. The results of the study indicate a negative fiscal impact to the City. The extent of the impact depends upon the scenario used. Per the request of Don Williams, I have created three different scenarios using 4%,`5%, and 6% for the City's share of the General Property Tax levy. Below is a summary of the net fiscal impact to the City: Net Fiscal. Net Fiscal Net Fiscal Impact @ Impact @ Impact @ 4% share of 5% share of 6% share of Year PropertyTax. Property Tax Property Tax 1993 $ (69,462)$ (49,454), $ (29,445) 1994 (71,158) (51,547) (31,935) 1995 (72,822) (53,599) (34,376) 1996 (74,453) (55,612) (36,771) 1997 (76,053) (57,586) (39,120) 1998 (77,623) (59,523) (41,423) 1999 (79,162) (61,422) (43,682) 2000 (80,671) (63,285) (45,898) " 2001 (82,152) (65,111) (48,071) 2002 (83,604) (66,903) (50,202) TOTAL $(767,160) $(584,042) $(400,923) .. AVG. ANNUAL.. IMPACT S (76,716) $ (58,404) S (40,092) *The results of the study are reflected in current dollars. If you have any further questions regarding the study, please let me know. Attached is a detailed copy of the fiscal impact report. cc: Ken Pulskamp Don Williams KBB/179/01 CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: Krista Kimbrough, Assistant Planner FROM: Richard Inzunza, Accountan4,e'Z DATE: June 29, 1993 SUBJECT: Fiscal Impact Analysis for the Northbridge Annexation Area I have completed the fiscal Impact study for the proposed Northbridge annexation. The results of the study indicate a negative fiscal Impact to the City until commercial retail centers open, i have created four different scenarios using 4%, 5%, 6%, and 7% for the City's share of the general property tax levy. Below Is a summary of the net fiscal Impact to the City: Net Fiscal Net Fiscal Net Fiscal Net Fiscal Impact @ Impact @ Impact @ Impact @ 4% Share of 5% Share of 6% Share of 7% Share of Year Properly Tax P.ropelly Tax Property Tax Property Tax 1994 $ (273,608) $ (246,010) $ (218,413) $ (190,816) 1995 (251,685) (220,544) (189,402) (158,261) 1996 (252,486) (217,889) (183,292) (148,695) 1997• (253,390) (215,390) (177,390) (139,390) 1998 (254,785) (213,468) (172,151) (130,834) 1999 (256,271) (211,687) (167,103) (122,520) 2000 (258,236) (210,470) (162,703) (114,936) 2001 4,132,992 4,265,490. 4,397,989 4,530,487 2002 3,672,727 3,802,637 3,932,547 4,062,457 2003 3.661.875 3.789.246 3.916.618 4.043.989 Total • 9.667,133 10,321.915 10,976,700 11,631,481 ' The results of the study are reflected In current 1993 dollars. Amounts lost by the City in the first seven years fluctuates annually due to the relationship between Inflation and new residential development. In the eighth year commercial retail activity begins, causing a dramatic Increase in revenue to the City. Revenues fall in years nine and ten as Inflation outpaces the maximum 2% annual Increase of the assessed value of property. Attached is a detailed copy of the fiscal Impact report. Please contact me at X926 if you are In need of additional information. cc: Steve Stark, Director of FinanceO Kwan Beilin, Administrative Assistant