Mayor confident annexation numbers will hold

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TELL CITY – Tell City Mayor Barbara Ewing stands behind a financial analysis she said shows Tell City can afford to serve annexed areas without significant impacts on current residents. Her support of data prepared by accountants at H.J. Umbaugh come in the wake of comments made at a public hearing last Monday questioning the impact projected financial deficits might have on property taxes and utility rates.

The city council will take up the annexation issue at its April 7 meeting and could vote to approve an ordinance that would formally incorporate more than 1,700 acres into the city. Most of the comments made at last week’s hearing were against annexation.

Among those raising fiscal issues last week was Randy Cole, who lives in the annexation area. He passed out data taken from the city’s own fiscal plan that shows extra revenue from the annexation area will not fully cover the added costs of serving the area. Cole and other speakers’ comments were limited to three minutes.

Cole said the city’s own fiscal document raises issues, in particular shortfalls in the cost of serving areas with noncapital services such as police and fire protection, street

The city’s fiscal plan estimates the city will see an additional increase in its tax levy of $130,400 in 2015, with other new revenue of $26,700 in trash fees and $5,652 in stormwater fees. However, the city estimates its costs of serving the area at $255,580 in 2015, leaving a deficit of $92,828. Those costs include the salary and squad car of an extra patrol officer the city plans to hire, additional employees in the street and trash department and the costs of vehicles and supplies. Anticipated deficits decrease to $72,328 in 2016 and $78,328 in 2017.

As the News reported Thursday, Cole raised the issue of how the deficit will impact existing city residents. He said the result could be residents subsidizing those in the annexed areas. Cole also pointed out the small number of people living in the annexation area relative to its size.

Ewing, as she did during the hearing, pointed to the analysis of accountants with H.J. Umbaugh, which detailed the city’s anticipated new revenue and expenses. A representative spoke at Monday’s hearing and defended the city’s fiscal plan. He pointed to additional revenues the city will see from extra income taxes and road money from assuming control of roads in the annexed areas.

Ewing said Umbaugh has done work for the city for many years and said she trusted their work. She also has said the city will seek grants and low-interest loans to lessen the financial impact.