Pharos-Tribune

July 22, 2013

Vote to come on annex fiscal plan

Projected taxes down, but cost of services similar.

by Mitchell Kirk Pharos-Tribune
Pharos-Tribune

---- — Logansport City Council is preparing to adopt a fiscal plan for the recently-reduced annexations it recently approved, and while the amount of land and projected tax revenue have decreased, the projected costs to maintain the new parts of town have remained about the same.

After determining the permanence of an agricultural tax exemption might cause future problems and that the extension itself would not be as inclusive as first predicted, a consultant assisting the city with its annexation initiative recommended decreasing the two proposed annexation areas south of the city.

In a narrow vote earlier this month, Logansport City Council voted in favor of annexation and amended the corresponding legislation to reflect the decreases.

At the same meeting, the council tabled a measure that would adopt a fiscal plan for the newly-decreased annexation areas outlining the cost of city services and projected tax revenue.

Mike Shaver, president of Wabash Scientific Inc. and the consultant assisting the city with the annexation initiative, met with the council’s finance committee recently to go over the numbers.

At the meeting, Shaver reminded council members of the reasoning behind his recommendation to reduce, saying that he felt an amendment passed by the Indiana General Assembly in April allowing for a permanent tax exemption for annexed properties would be too much of a burden to bear compared to the 10-year exemption outlined in the statute’s original language.

Shaver also said after concluding there were industrial activities were taking place on some agriculturally-zoned properties in the proposed annexation areas, it wouldn’t be appropriate to offer those areas the agricultural exemption.

“Nobody did anything wrong,” Shaver said. “It was an anomaly caused by the way the legislation was written.”

The southeast annexation area started out with 1,714 acres and 152 parcels and was reduced to 1,375 acres and 86 parcels. The southwest annexation area went from 1,548 acres and 354 parcels down to 1,246 acres and 244 parcels.

Areas fronted by the Hoosier Heartland Highway remain in the new plans, as city officials have said the positive economic impact the highway is expected to create is a reason behind wanting to include these areas in the city.

Because the land has been reduced, so too have the taxes annexation was originally projected to bring in.

In the report based off of the original plans, projected property tax collections for the annexation areas for 2013 totaled at $426,092. The reduction cut the projection down to $146,714.

Shaver said he met with all city department heads to determine how their projected costs of services would change after the reduction.

The original plan estimated the total annual cost of city services to the proposed annexation areas to be between $217,000 and $272,000. Despite the loss of more than half of its projected tax revenue, the projected cost of city services after reduction is comparable to the original plan, even surpassing the estimated high cost, at $209,000 to $291,000.

The council will vote whether to adopt the fiscal plan Aug. 6.

Mitchell Kirk is a staff reporter at the Pharos-Tribune. He can be reached at 574-732-5130 or mitchell.kirk@pharostribune.com.