Havre Daily News
In April, Havre City Council member Terry Schend asked city officials to look into the possibility of annexing land into the city. At the time, Schend said he was interested in studying all land outside of the city limits that receives city services like sewer and water, but is not within the city.
City officials have done some work to research annexation agreements with property owners in those areas, but have not yet set out to define the area that could become part of Havre. Also, little has been done to compare the costs of providing services to those areas with the revenues that would be gleaned from property taxes.
Havre Mayor Bob Rice said at Monday's City Council meeting that he is setting up a meeting between City Council members and City Attorney Jim Kaze about annexation.
Schend said today he is particularly interested in land west of Havre, including the parcel that may become home to a Wal-Mart supercenter.
There is other development in the works, as Bill and Judi Dritshulas are planning to build a 150-suite hotel complex that will include other commercial space. Also, a new Farm Credit Service building is being constructed near the Holiday Village Shopping Center.
Schend said the city has to see if annexation is fiscally feasible, and should take the long view when looking at the issue.
"Granted there is going to be additional costs, but there's also going to be increased revenues," Schend said. "Over the long term, does the tax base increase make up for the costs? We have to look at the long term."
Hill County Commissioner Mike Anderson said he doesn't take issue with the city annexing land in the county, as long as it doesn't just take those that produce the most tax revenue.
"I don't mind them annexing anything, but I don't want them to cherry pick out the good properties and have their lines going all over the place to exclude the bad stuff," Anderson said. If the city took profitable properties and left the county with those that have more costly infrastructure to maintain, that would leave the county without the tax money to maintain that infrastructure, he added.
If the city annexes the land, it will receive more money each year in the form of real property taxes and personal property taxes. According to the Hill County office of the Montana Department of Revenue, city property owners pay more in taxes each year than county property owners.
The following estimates use 2004 mill levy rates - this year's rates haven't been set - and 2005 property values, to show how much individual properties would pay to the city if annexed. The Kmart property and business equipment is worth an estimated $12,675 per year for the city at its current value.
Havre Ford's property and business equipment would be worth $1,352 a year in taxes to the city. The Super 8 would pay the city $3,084. The properties and equipment of Torgerson's Land LLC, formerly Meissner's, would be worth $4,721 in city taxes.
The USDA building would generate more than $1,400 in city property taxes. Government entities are exempt from personal property taxes on equipment.
Holiday Village would pay $9,289 in taxes on real property.
By annexing the properties, the city also would become liable for costs that are now paid for by Hill County. The city would be responsible for additional water and sewer infrastructure, police and fire protection, road maintenance and garbage pickup.
The area contains four rural special improvement districts, set up to maintain water and sewer lines and sewer lift stations, Hill County Clerk and Recorder Diane Mellem said. If the City Council decided to annex land, it could include all or parts of those districts.
According to Mellem, Hill County paid $22,113 to maintain the infrastructure within the four RSIDs during the fiscal year that ended June 30. In 2003-04, the cost was $13,758. In 2001-02, the county paid $11,234 to maintain the infrastructure.
In 2002-03, county taxpayers footed a $154,012 bill for maintenance in the districts. The bill was larger that year because the county had to rebuild one of the lift stations near Kmart.
Mellem said the county pays for the maintenance of the infrastructure, while the city meters water and sewer use. By annexing the land, the city would take on the additional maintenance, but it would not receive additional water and sewer revenues.
Mellem and other county officials noted that it is difficult to come up with the exact costs the city would incur because the city has not yet defined what area it is considering for annexation. For example, depending on where the lines are drawn, the city could end up with portions of the RSIDs instead of all of them, meaning they would have to be broken up and their costs split.
Hill County Undersheriff Don Brostrom said the number of calls to law enforcement coming from any area is relative to the population and businesses it contains, so annexing the area west of town would increase the workload of the Havre Police Department. He stressed that he could not give specific data because he cannot break down calls by area.
"The bottom line is it's going to be more work for them," he said. "Those are calls they're not currently handling."
The department may need additional staff to handle the calls, Brostrom added.
Havre Police Chief Mike Barthel said that if the city annexed the land, he would have to study how much the department's call load increased over a year's time before making a decision on whether to hire an additional officer. The department is now short by one officer, but Barthel said he has a part-time officer who helps make up the difference.
"I don't believe, at this time, that we would need additional staff, but it's something I would have to study," Barthel said. "I would definitely re-evaluate after a year's time."
Havre public works director Dave Peterson said the city may need to purchase an extra garbage truck, at a cost of about $200,000, to handle the increased volume of pickups if the area west of town were annexed.
"My best guess is that we'd probably have to add another garbage truck somewhere in the system," Peterson said. "It's tough to say until you get out and find out how much garbage is being generated."
The truck would be paid for out of the reserve garbage fund, and rates may have to be raised to pay for new equipment, he said.
"I would say you'd probably have to do something to adjust the rates," Peterson said.
Hill County road supervisor Jerry Otto said the costs of maintaining roads in the area would be minimal. The city and the county already work together to manage some of each other's streets in the winter, he added.
"It wouldn't be a big cost to them," Otto said. "We work together as it is."