Agenda - 02-19-2013 - 7b - Laserfiche WebLink

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31 Town service costs are anticipated to decrease for solid waste services, traffic signs and pavement markings, and fire due to one --time costs incurred in the first-year following annexation, which no longer will be applicable in subsequent years. Costs for street maintenance, street lighting, police, and stop- nwater drainage are anticipated to be similar to those experienced in Year one. Year Two and Three Revenue Year Two and Three Revenues are summarized in Table 3. ■ With the exception of sales tax, revenues are not estimated to increase in Years Two and Three, based on historical trends in collection of property tax and population based revenues, which have remained relatively flat over the past several years. A 2.5% increase is applied to sales tax revenue, based on historical data. Policy Implications The recent changes in the state's annexation laws have implications for our joint planning efforts in the extraterritorial jurisdiction and for the future growth and development of the Town. Orange County and the Towns of Chapel Hill and Carrboro have a long standing plan for orderly growth of urban areas while preserving rural areas of the County. This plan has been successful in minimizing sprawl within orange County, allowing municipalities to provide urban level services and preserving the benefits of nearby rural areas and farms. The Town has traditionally provided services to neighborhoods in the urban services boundary and extraterritorial jurisdiction, such as Area 5, as part of the normal progression to annexation into the municipal jurisdiction. however, the recent changes to annexation laws have altered this natural progression, as evidenced by the fact that no municipalities in the state have pursued annexation of unincorporated areas since the legislative reforms. Additionally, parsing out services on a menu selection or pay as you go basis dilutes the benefits of full annexation and places the burden of supporting necessary infrastructure and organizational function systems on the Town residents alone while others receive the services, particularly when the service fee or district taxes pay only for the specific and direct service rendered. Municipalities like Chapel hill, then, face a conundrum ---- -- continue providing services to neighborhoods in the urban services boundary and extraterritorial jurisdictions without the likely possibility of eventual annexation of these areas into the municipal jurisdiction, or initiate costly and time - consuming efforts to annex areas that are likely to be voted down by residents. This is a serious issue that merits further consideration by Council, particularly as the Town strives to prioritize services and make do with limited financial resources. RECOMMENDATIONS Based on the financial analysis, it appears that annexation would be beneficial to the Town's long -term financial and development interests. with that said, the legal constraints imposed by current annexation laws, contextual factors related to the neighborhoods in question, and potential resource demands on staff required to initiate annexation make the pursuit of annexation of this area challenging and impracticable. Thus, based on the information provided, I recommend that the Council: