Annexation: Good for everyone?

A typical city annexation could bring nearly $2 million in new tax revenues to Asheville every year.

But how does that amount compare to the cost of providing water, sewer, police, garbage and fire-protection services to newly annexed residents?

No one’s entirely sure.

Looking for ways to increase city revenues, Asheville City Council members wanted to know the answers to such questions. They hired a consultant and directed staff to research past annexations. On March 31, they heard their first report — only to come away with more questions.

A big issue for Council members was whether residents in past annexations got the city services they were promised. Vice Mayor Ed Hay noted that North Carolina state Rep. Wilma Sherrill (R-Buncombe County) has alleged that many annexed residents aren’t getting what they deserve.

But most are getting what the city promised, responded Planning Director Julia Cogburn. (When it comes to sewers, however, she seemed less certain.)

Of Asheville’s nearly 25 involuntary annexations since the city was incorporated in 1797, the city broke its promise of services in only one case, according to Cogburn. When the Bingham Road/Boone Street area was annexed in the 1980s, the city agreed to put in a sewer line. However, the city later decided that the cost would be prohibitive, Cogburn reported.

City Manager Jim Westbrook noted that he had asked the Metropolitan Sewerage District for a list of city residents who lack sewer service. That research took a lot of digging: MSD is in the process of computerizing its data and doesn’t currently have an accurate map of existing sewer lines, according to Westbrook.

But the city manager said he did learn that about 700 city households don’t have sewer service. Westbrook said he doesn’t know how many of them were annexed residents, or why sewer service wasn’t provided in some cases.

When sewer service was not promised, residents may have had the option of sharing in the cost of a line-extension but opted not to pay, Cogburn speculated. “Sewer was not always part of the [annexation] deal.”

Annexation policies have varied from Council to Council over the years, as have Regional Water Authority and MSD policies, Cogburn continued. For example, MSD — which took over city sewer lines in 1989 — does not pay for sewer-line extensions, so the city or property owners must bear that cost in an annexation, Westbrook added.

Sewer-line extensions have been a hot issue in recent years. According to MSD General Manager Bill Mull, the independent sewerage agency inherited a nearly $200 million repair job when it took ownership of Asheville’s aging sewer lines. Mull said the MSD board has opted to fix existing lines before taking on any new projects. The city and the Asheville Area Chamber of Commerce have asked the MSD board to reconsider that policy.

Regardless of past policies, Council member O.T. Tomes said he just wants to make sure current residents get city services. He mentioned that several Shiloh-area residents have called him and complained that they still don’t have sewer service. “I’d like to see some of the inequities — from whatever short-sighted policies they were created — corrected,” Tomes urged.

Other Council members agreed — but they insisted that, to the best of their knowledge, the city has kept its annexation promises.

That claim elicited a few skeptical grumbles from county residents who attended the session — as well as comments from consultant Richard Flowe.

Flowe noted that affected residents often appeal annexations. To fend off those appeals, he urged, “Clearly communicate with the public about the [city] services promised and proposed.”

He also encouraged Council members to use the annexation policy they plan to adopt in the coming year as a way to make sure services for current residents are improved.

Next, city Administrative Assistant Bob Wurst (the former Budget and Audit Director) argued that the city needs a larger share of the area’s sales taxes and gas taxes. He claimed, “If we don’t grow and other cities do, we lose.”

Wurst is the one who estimated the nearly $2 million gross benefit to the city in a typical annexation. But he noted that the new revenue would be offset by the cost of providing services.

“What is an average cost?” asked Council member Barbara Field.

No one had a clear answer, because the costs vary.

Flowe cautioned that initial expenses — such as upgrading streets to city standards, and laying water and sewer lines — could be high. But over time, he argued, those costs go down. Some costs can be trimmed with a bit of planning, such as redesigning garbage routes to avoid hiring additional staff, Flowe suggested.

Council members didn’t appear entirely content with that reply, but they said little — until Field posed a highly hypothetical question.

“Can a city annex an entire county?” she asked.

“Oh, God, Barbara!” Council member Chuck Cloninger exclaimed.

She explained that many county residents have asked her whether Asheville is trying to annex the whole county. She noted that, some years ago, there had been talk of merging city and county services.

Annexing the county or merging all services “would take state legislative action,” according to Ellis Hankins, director of the North Carolina League of Municipalities.

Besides, the idea is unlikely because, as a whole, the county wouldn’t meet the population density and other criteria set by state law, Flowe remarked.

As the presentation came to a close, Hankins reminded Council members (although he didn’t need to), “Politically, annexation isn’t easy.”

County resident Ernie Thurston, who used to live in the city, urged Council members to do a more extensive cost-analysis of annexation.

Another county resident who attended the session, Bill Smith, remarked afterward, “Just because you add more people, that doesn’t necessarily mean the cost of services go down. Bigger is not necessarily better.”