Friday, November 13, 2009

Annexation - Opportunities and Challenges

Community Member Question:

Since it is plain to see how annexing to improve the area of influence would keep property taxes locally, what are the challenges that the city faces to move forward on annexing more of the county areas?

City Manager Response:

Excellent question.

Before I respond, let me say that you are completely correct - one of the reasons why annexation is important is that taxes currently being paid by the residents in the county areas are distributed to the county as a whole. These funds can be spent anywhere in the county and do not necessarily benefit the local community that generates the taxes. When annexation takes place, the county area becomes part of the city and the money currently being paid by tax payers comes back to the local jurisdiction for allocation. It is important to note that the amount of taxes paid does not change after annexation; only the agency that receives the funding changes.

A second benefit of annexation is coordination of services. By squaring off city boundaries, police and code enforcement activities may be provided more efficiently. You can imagine the confusion that takes place when the Sheriff’s Office needs to be called for service on one corner and the City Police Department needs to be called for crime occurring on the opposite corner. Squaring off borders allows for both agencies to provide more efficient services.

Finally, the county is set-up to provide rural services to the community while a city is set-up to provide urban services. It is not that one agency provides better service; it’s just that services are often provided under a different philosophy. When Fontana was primarily an agricultural community, rural services made sense. As the City grows, there is a greater need for urban services that are typically provided by a city.

Now, let’s talk about some of the challenges to annexation.

Probably the most difficult hurdle to overcome with annexation is the fear of change. Residents pick a place to live and businesses pick a location from which to work for a variety of reasons important to them. Residents and businesses choose a location in the county, not the city, in which to locate. Annexation for these folks represents the possibility of change and change may not be acceptable to them. Since residents and property owners can challenge an annexation and force the issue to a vote, it can make it difficult to complete the annexation process. Equally true is that the Mayor and City Council of Fontana listen to concerns of the residents and businesses and will typically not try to force annexation on an area where a significant number of people oppose the effort.

Another challenge is the cost of services to the area being annexed. Along with keeping the taxes local, the city assumes the responsibility to provide city services within the area being annexed. In most cases where there is a significant amount of residential property involved, the cost of providing services to the area exceeds the revenue generated by the area. This means that other areas of the city may end up subsidizing the newly annexed area, thereby putting a strain on the overall budget.

Third, when the City annexes an area, we become responsible for the ultimate construction and maintenance of the infrastructure needed to support the area. Areas that lack sidewalks, curbs, storm drains, and sewers may create the need to spend tens of millions of dollars in the future.

Finally, much of the area remaining in the County area is part of the County Speedway Redevelopment Area. As such, a number of long term commitments have been made that complicates an already difficult annexation process. To consider annexation of the west end, a number of technical and challenging issues would need to be resolved with both the County and a number of businesses in the area.