Annexation survey results presented to Palmer City Council

PALMER — The Palmer City Council heard a presentation of scenarios for annexation that were commissioned as a study by Agnew Beck consultants in Anchorage to provide more information to the council and residents in the city of Palmer. Agnew Beck also assisted in preparing information on the most recent efforts for annexation in Palmer in 2006 and divided the areas bordering Palmer’s city limits into seven study areas, roughly equivalent to the same area studied 14 years ago.

“This work is a study right so it’s a part of the city of Palmer’s effort to think analytically and strategically about the benefits and the potential issues that come with annexation, so there is no decision that’s been made related to annexation,” said Shanna Zuspan.

Zuspan, Jonathan King and Heather Stewart presented to the council via Zoom during a committee on the whole. Zuspan noted that the process of gathering information from residents about their knowledge of annexation began over one year ago, and reiterated that no action was to be taken at the meeting on Tuesday, nor would any action be immediately taken upon the presentation of findings. Agnew Beck consultants had solicited survey responses from residents and businesses owners, both those that live inside city limits and those who live outside city limits, and presented the data they had collected. A larger portion of city residents felt favorably about annexation and a larger portion of residents living outside city limits felt unfavorably, with breakdowns provided by each district. Of the areas considered for annexation labeled ‘A’ through ‘G’, the highest portion of residents in section A and G were in favor of annexation at 43 percent or three of the seven respondents in each area.

“How do communities maximize local control and allow for the most number of individuals to really participate effectively in their local government and so when you have communities with large pockets of population adjacent to city boundaries, many of those individuals can’t run for city council, can’t be a appointed to commissions and so there’s often a rationale to consider annexation to really expand that local governance and provide more real opportunities for people to participate,” said Zuspan.

King presented the findings of the survey thus far, which garnered varied results from residents in different areas. The largest portion of respondents was 44 percent who did not support annexation under any circumstances. A total of 14 percent felt that they would offer support if it was fiscally feasible and another 13 percent responded that they would support even if not fiscally feasible in the short term, citing long-term benefits. There were 13 percent of respondents who felt they needed more information, 12 percent who felt they could support if their concerns were addressed and three percent who had no opinion whatsoever.

“We created a model that then looks at how your revs would change and how your expenses would change under diff annexation scenarios,” said King. “About 80 percent of your tax revenue comes from your sales taxes and this is a heat map that shows where commercial activity is concentrated within the aggregate study area within the city of Palmer and what do we see? We see that most of the commercial activity in the area takes place inside the current city boundaries. In fact about 85 percent of identifiable commercial activity actually takes place inside of your current boundaries. So what does that mean, what that means is your current city boundaries are very efficient with respect to harvesting the local sales tax resource.”

King presented two likely scenarios for moving forward with annexation in the future with the information that had been gathered. King said that there were opportunities for a smaller portion of areas to be annexed, likely one or a combination of multiple areas along the northern border of the city and a second scenario with additional areas to be annexed. Area ‘G’ along the Glenn Highway would not be able to be annexed without area ‘E’ which immediately borders the city limits.

“What we’ve heard repeatedly is that annexation is a money grab, and what this actually shows is there’s not a lot of sales tax revenue to really grab outside of the, city there’s no and we have seen municipalities that have targeted areas for revenue purposes, but there’s no data to suggest that that’s a viable option here or that you’re doing that in any way. So just note that that commercial activity is very much concentrated inside the city,” said King.

King noted that while assessed property value is higher per resident inside the city than outside of city limits by over $10,000 per resident on average, supporting the annexation of multiple areas could result in increased costs of service. The data presented by Agnew Beck showed areas ‘D,’ E,’ and ‘F’ as the least fiscally feasible areas for possible annexation.

“That mix of how you generate your revenue does affect the end result, particularly in light of the fact that there are not big potential sources of sales tax revenue through commercial activity outside city limits,” said King. “We believe that you have maxed out certain capital facilities that you have in particular out at the airport is where your public works equipment is located. That facility cannot accommodate any additional equipment and you would need new equipment in order to service some of these areas.”