0. North Richmond Annexation Fiscal Impact Analysis
City of Richmond
North Richmond Annexation Fiscal Impact Analysis
July 11, 2017
James Edison and
Carlos Villarreal
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1. Presentation Outline Background Land Use Scenarios Revenues Costs
Preliminary Results
Changes in Service Providers
Cost Changes to Residents

2. 1. Background
Currently governed by Contra Costa County Board of Supervisors
Almost entirely surrounded by the municipal boundaries of the City of Richmond
900 acres
Approximately 3,717 residents
Mostly single family residences (~765) but also multi- family and commercial and retail space
Don’t know if this is needed for this crowd but I added it just in case. This provides some of the assumptions used.

3. Interest in Annexation
Improve government efficiency in the delivery of municipal services
Improve representation for residents
Improving coordination of land use planning, services and infrastructure
Improve government efficiency in the delivery of municipal services to North Richmond, especially with respect to public safety and public works;
Improve representation for residents of North Richmond by allowing voters to participate in the election of the Richmond Mayor and Richmond City Council members that can provide a politically accountable government closer in proximity, and thereby, more familiar with issues affecting North Richmond;
Improving coordination of land use planning, services and infrastructure between North Richmond and the City of Richmond.

5. Service Plan and Fiscal Impact Analysis
Estimates the net fiscal impact (the difference between the increase in revenues and expenditures) on the City of Richmond from the increased service demands
Describes services to be provided by the City of Richmond to the annexed area
Estimate costs associated with providing these services
Estimate revenues
Describe impacts of these costs and revenues on other affected agencies

6. Process: Phase 1
Complete a service plan and fiscal analysis (this analysis)
Inform the Richmond City Council and residents of North Richmond whether or not to proceed with the annexation process
Phase 1
Complete a service plan and fiscal analysis that will serve to inform the Richmond City Council and residents of North Richmond regarding whether or not to proceed with the annexation process
Phase 2
If the decision is made to proceed with the annexation process, and if authorized by the Richmond City Council, will consist of additional work necessary to prepare a service plan and fiscal analysis that will satisfy requirements of the Government Code, and with Contra Costa LAFCO policies and procedures (Attachment B), to support the annexation proposal. It is contemplated that the deliverable work product for Phase 2 shall be sufficient to be used by LAFCO in evaluating the proposed annexation in order to render a decision to approve, modify, or deny the application.

7. Process: Phase 2
An annexation application is submitted to Local Agency Formation Commission (LAFCO)
LAFCO will hold a public hearing to consider the annexation application
LAFCO may approve (with or without conditions), modify or deny the application
If LAFCO approves the annexation, and if there are any objections to the annexation, then LAFCO holds a second hearing called a “protest hearing.” 
The fate of the annexation is determined as follows:
If protests are filed by fewer than 25% of either landowners or registered voters within the annexation area – LAFCO orders (confirms) the annexation
If protests are filed by at least 25% but less than 50% of either landowners or registered votes within the annexation area, the question of annexation goes to an election where only registered voters can vote – the vote is subject to a simple majority
If protests are filed by 50% or more of the registered voters residing within the annexation, then the annexation is terminated  

8. Fiscal Impact Analysis
Revenue Factors
Total Revenue
LAND USE
NET IMPACT
Cost Factors
Total Cost

9. 2. Development Scenarios
At annexation
1993 North Richmond Shoreline Specific Plan
Approved development
Development pending approval
2011 North Richmond Specific Plan
Break Even

10. Development Scenarios

11. 3. Revenues
Property tax
Property transfer tax (Documentary transfer tax)
Sales tax
Utility user tax
Miscellaneous (e.g., licenses, permits,, service charges, etc.)

12. Approach: Property Tax
INPUTS
SCENARIO
RESULTS
Assessed Value
Property Turnover Rate
Tax Revenue
Tax Rates
Value per Square Foot

13. Assumptions: Property Tax
Sales Values
Residential Per Unit
Multifamily per Sq. Ft: $240
Single Family per Sq. Ft: $250
Non-Residential per Sq. Ft.
Commercial: $250
Industrial: $175
Tax Rates
City receives 10.5% of 1% base property tax
Average share received Richmond TRAs
City must negotiate share with County
City receives $7 per $1,000 of assessed value for property transfer tax (percent of sales value)

14. Sales Tax Revenue
Commercial taxable retail sales per square foot = $250
Assumes current sales tax revenue is de minimis
Specific plan sales tax revenue estimated at $18,750 per year

15. Other Revenues Use per capita approach:
(Current city revenue / Current city population) x service population
Types of revenues:
Franchise Fees
Licenses & permits
Charges for services
Revenue from other agencies
Utility User Tax
Fines

16. 4. Costs Case Studies: Police
Water Resource Recovery (Storm Drain Operations)
Department of Infrastructure maintenance & Operations (DIMO)
Engineering & Capital Improvement Projects
Per Capita Approach:
General Government
Library
Fire
Planning & Building Services
Community Services
Non-departmental

17. 5. Preliminary Results

18. Capital Needs

19. 6. Changes in Service Providers

20. 7. Changes in Costs to Residents

21. New Taxes/Fees Utility User Tax (UUT)
If PGE is $100 per month then your bill would increase by $10 per month (10% UUT) for a total monthly bill of $110
If your Comcast cable bill is $200 per month then your bill would increase by $19 per month (9.5% UUT) for a total monthly bill of $219
Property taxes
Add $140 per $100,000 of assessed valuation to a homeowner’s annual property tax bill.
If a home has an assessed value of $300,000, then the property taxes will increase by $420
Republic Services Residential Rates
North Richmond – 35 Gallon - $94.68 (3 month rates)
Richmond - 35 Gallon - $ (3 month rates)

22. Changes in Costs to Businesses and Landlords

23. New Programs and Policies
Rent control
Eviction protections apply to all rental units
Rents for rent-controlled units must reset to the “base rent”, or the rent paid on July 21, 2015 (or the first date that rent was paid after this date)
Landlords may apply one Annual General Adjustment (equivalent to up to a maximum of  3.0%) rent increase with 30-days’ notice

24. Preliminary Results

25. Community Meetings & Next Steps
North Richmond Municipal Advisory Council (NR MAC) Meeting Tuesday, June 13th Shields Reid Neighborhood Council Tuesday, June 27th Richmond City Council Meeting Tuesday, July 11th Special Community Meeting Spanish Translation Thursday, July 13th 6:00 PM – 8:00 PM Community Heritage Senior Apartments, 1st floor 1555 Fred Jackson Way, N. Richmond
North Richmond Network Meeting
Thursday, July 20th
3:00 PM -5:00 PM
Verde Elementary School
2000 Giaramita Street, N. Richmond
North Richmond Municipal Advisory Council (NR MAC) Meeting
Tuesday, August 1st
5:00 PM – 7:00 PM
515 Silver Avenue, N. Richmond
Richmond City Council Meeting
Tuesday, September 26th
6:30 PM (Start Time)
City Council Chambers
440 Civic Center Plaza, Richmond

26. Thank You
Q&A