annexation fiscal plan: area 5 city of vincennes, indiana · contiguity . ic 36-4-3-1.5 defines an...

ANNEXATION FISCAL PLAN: Area 5

City of Vincennes, Indiana

March 9, 2015

Annexation Fiscal Plan: Area 5 City of Vincennes, Indiana

TABLE OF CONTENTS

Page PURPOSE OF THE REPORT ii INTRODUCTION 1 SECTION ONE: BASIC DATA OF THE AREA TO BE ANNEXED

A. Location ........................................................................................................ 1 B. Size .............................................................................................................. 1 C. Population and Density ................................................................................. 1 D. Buildings ....................................................................................................... 2 E. Land Use and Assessment ........................................................................... 2 F. Zoning .......................................................................................................... 2 G. Topography .................................................................................................. 2 H. Tax Rate ....................................................................................................... 3 I. Council District ............................................................................................. 3

SECTION TWO: LEGAL REQUIREMENTS

A. Introduction .................................................................................................. 3 B. Contiguity ..................................................................................................... 3 C. Conclusion ................................................................................................... 4

SECTION THREE: MUNICIPAL SERVICES

A. Non-Capital Services .................................................................................... 4 B. Police Protection .......................................................................................... 4 C. Fire Protection .............................................................................................. 6 D. Street and Sanitation .................................................................................... 6 E. Animal Shelter .............................................................................................. 7 F. Inspector’s Office .......................................................................................... 8 G. Cemetery ...................................................................................................... 8 H. Sewer, Water, and Stormwater Services ...................................................... 8 I. Other Administrative Services ...................................................................... 8 J. Capital Improvement Services ...................................................................... 8 K. Sewer Capital Improvements ........................................................................ 9 L. Water Capital Improvements ........................................................................ 9 M. Stormwater Capital Improvements ................................................................ 10

SECTION FOUR: ESTIMATED PRO FORMA REVENUES

A. Revenues ..................................................................................................... 10 SECTION FIVE: REVENUE AND EXPENDITURES

A. One Year Summary of Expenditures and Revenues .................................... 22 SECTION SIX: APPENDIX A: PROPOSED TIMELINE OF LEGAL STEPS

A. Timeline ........................................................................................................ 24

SECTION SEVEN: APPENDIX B: PROPOSED AREA A. FIGURE 1: Area 5 ........................................................................................ 25

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Purpose of the Report Crowe Horwath LLP (“Crowe”) has been engaged by the City of Vincennes, Indiana (“City”) to prepare an Annexation Fiscal Plan (“Fiscal Plan” or “Report”) as required by Indiana Code (IC) 36-4-3 (“Annexation Statute”), specifically, IC 36-4-3-13(d) (“Fiscal Plan Requirement”). This Report addresses, at a minimum, the following five (5) items as mandated by the Fiscal Plan Requirement:

(1) The cost estimates of planned services to be furnished to the territory to be annexed including itemized estimated costs for each municipal department or agency;

(2) The method(s) of financing the planned services including specific and detailed expenses of how the services will be funded including any taxes, grants, and other funding sources to be used;

(3) The plan for the organization and extension of services including specific services that will be provided and anticipated dates the services will begin;

(4) That planned services of a noncapital nature, including police protection, fire protection, street and road maintenance, and other noncapital services normally provided within the corporate boundaries of the City, will be provided to the annexed territory within one (1) year after the effective date of annexation and that they will be provided in a manner equivalent in standard and scope to those noncapital services provided to areas within the corporate boundaries regardless of similar topography, patterns of land use, and population density;

(5) That services of a capital improvement nature, including street construction, street lighting, sewer facilities, water facilities, and stormwater drainage facilities, will be provided to the annexed territory within three (3) years after the effective date of annexation and that they will be provided in a manner equivalent in standard and scope to those noncapital services provided to areas within the corporate boundaries regardless of similar topography, patterns of land use, and population density, and in a manner consistent with federal, state, and local laws, procedures, and planning criteria.

This Report is based on estimates, assumptions and other data developed by Crowe from data provided by the City, Knox County Auditor’s Office, Knox County Assessor’s Office, the Department of Local Government Finance, United States Census Bureau, and other sources deemed to be reliable. In the course of preparing this Report, we have not conducted an audit, review or compilation of any financial or supplemental data or any of the assumptions identified and/or used in the Report. We have made certain projections of tax rates, tax levies, expenditure levels, and service levels which may vary from actual results because events and circumstances frequently do not occur as expected and such variances may be material. We have no responsibility to update this Report for events or circumstances occurring after the date of this Report. If you have questions regarding this Report, please contact Herschel Frierson at (317) 269-2377 or [email protected] or Steve Chapla at (317) 208-1914 or [email protected].

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Introduction

The City of Vincennes (“City”) is considering annexation of certain properties (“Area”) currently located outside of but contiguous to the City’s corporate boundaries. The City believes that it is in the best interests of owners of land in the Area to be annexed into the City’s corporate boundaries. In addition to required findings as stated in the Purpose of the Report, the Fiscal Plan provides basic data regarding the Area. The Fiscal Plan is intended to provide City officials and those persons residing within the Area information that will allow for informed decision making regarding the proposed annexation. There are several legal requirements that must be met in order to adopt an annexation ordinance. The introduction and first reading of an annexation ordinance and adoption of a resolution adopting the Fiscal Plan by the City Council sets the motion for the potential annexation of the Area. The estimated timeline of action items required to adopt and effectuate an annexation can be found in Appendix A.

Section I: – Basic Data of the Area to be Annexed Location The Area consists of the area south east and contiguous to the current corporate boundary of the City and is currently located in Vincennes Township. There are 99 parcels in the Area.

Size The Area consists of 137 acres which is equivalent to approximately 0.21 square miles. Per the 2010 U. S. Census Bureau, the current land area of the existing City boundaries is 7.41 square miles thus the proposed Area would increase the corporate boundaries by approximately 3%. Population and Density Per the City, the population of the Area is 143 and the population density (population divided by number of acres) is 1.04 persons per acre.

Township Parcel Count

Vincennes 99

Population of Area 143.00 Divided by: Number of Acres 137.00 Estimated Number of Persons per Acre 1.04

Population Density

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SECTION I: – BASIC DATA OF THE AREA TO BE ANNEXED (Continued)

Per the 2010 U. S. Census Bureau, the City’s existing population is 18,423; therefore, assuming annexation of the Area, the City’s population will increase by approximately 1%. Buildings The Area includes buildings classified for assessment purposes as agricultural, commercial, exempt, industrial, and residential. Land Use and Assessment The current categories of property and respective net assessed values by parcel of the Area is provided in the table below. As shown, the Area is predominantly single family residential.

Zoning Zoning jurisdiction currently is exercised by the Knox County Area Plan Commission, which will continue to exercise such jurisdiction after the effective date of the annexation. The parcels within the Area will retain their current zoning classifications per IC 36-4-3-4.1. Topography The Area is generally flat to rolling elevations.

Property Classification

Parcel Count

Pay 2015 Net Assessed Valuation

Agricultural 4 372,660$ Commercial 1 73,000 Exempt 9 - Residential 85 6,476,219 Total 99 6,921,879$

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SECTION I: – BASIC DATA OF THE AREA TO BE ANNEXED (Continued)

Tax Rate The Area is located in Vincennes Township Taxing District. The respective total Pay 2015 tax rate is found in the following table:

Council District The Area will initially be assigned to City Council District 4, subject to any later reapportionment, as required by statute.

Section II: Legal Requirements

Introduction When pursuing an annexation, a municipality must ensure that the proposed annexation is in accordance with State of Indiana (“State”) law. The Annexation Statutes, specifically IC 36-4-3-1.5 provides cities with the ability to annex areas that are at least one-eighth (1/8) contiguous (12.5%) to the municipality and meet the requirements required by statute. These requirements are summarized as follows:

1. Development and adoption of a written annexation fiscal plan, as described subsequently in the Report;

2. Provide written notice of the hearing by certified mail to each owner of real property whose real property is located within the Area, at least sixty (60) days prior to the date of the public hearing after the annexation ordinance is introduced;

3. Hold a public hearing concerning the proposed annexation; and 4. Adopt an ordinance in regard to the Area.

These requirements as listed above may be subject to, but not limited to, additional requirements as specified in the State statute. The remainder of this section will explain in further detail requirements which may apply as required by State statute. Contiguity IC 36-4-3-1.5 defines an area as contiguous if at least one-eighth (1/8) or twelve and one-half percent (12.5%) of the aggregate external boundaries of the territory to be annexed coincides with the boundaries of the annexing municipality. IC 36-4-3-13 provides that under certain conditions, a proposed annexation may be ordered by a court at a remonstrance hearing under certain conditions, including that the territory is at least one-fourth (1/4) or 25% contiguous with the boundary

Taxing DistrictCurrent

Total Tax Rate

Vincennes Township 2.0034$

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SECTION II: – LEGAL REQUIREMENTS (Continued)

of the annexing municipality. The Area is at least 12.5% contiguous to the City, which is greater than the one-eighth (1/8) contiguity requirement. The Area is 20.7% contiguous with the City. Conclusion The Area may be annexed into the City because it satisfies the primary requirement that has been established by the State legislature; the Area is more than one-eighth (1/8) or twelve and one-half percent (12.5%) contiguous, and the City has or will comply with all remaining statutory requirements.

Section III: Municipal Services This section of the Fiscal Plan describes the estimated costs and methods of financing the planned services to be provided to the Area, as well as how the City plans to extend the services which are non-capital and capital in nature. This section demonstrates how the City will satisfy the requirements of State law in the provision of planned services and financing of the same. Non-Capital Services As required, the Area will receive planned services of a non-capital nature in a manner equivalent in standard and scope to those non-capital services provided to taxpayers within the City’s current corporate boundaries. All planned services of a non-capital nature will be provided to the Area within one year after the effective date of the annexation. The anticipated effective date is the second January 1 after the date the ordinance is adopted. The description of the services, the estimated annual cost to the Area, and the fund or funds that will be used to pay for services are described in the following sections. Each of the funds identified are subject to annual appropriation by the City Council. Police Protection Vincennes Police Department (VPD) will extend services to the Area in the same standard and scope as provided to other areas in the City. VPD will provide protection and law enforcement services in the Area. Police protection services provided by VPD include: • Normal patrols and responses; • Handling of complaints, generating incident and accident reports; and • Special units, such as traffic enforcement, criminal investigations, etc.

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SECTION III: - MUNICIPAL SERVICES (Continued)

A. Summary of Costs All officers are assigned from one central station. The estimated 2015 operating budget provided by the City for VPD is $2,629,853 which equates to $7,205 per day. The VPD currently employs 37 officers for a per officer cost of $71,077. Based on the Bureau of Justice Statistics (BJS) Office, the recommend number of officers per 1,000 population is 2.3 officers. For purposes of the Fiscal Plan, Crowe has assumed that VPD will follow BJS guidelines for the Area based on the estimated 2015 cost per officer.

B. Method of Financing

There are no new costs associated with police protection. C. Plan for Organization and Extension of Services

Police protection services will begin one (1) year of the effective date of the annexation. Response to calls, traffic-related activities, investigation, pro-active patrol and all other services will be provided in the same standard and scope provided to other areas within the corporate boundaries.

Area Population 143 Divided By: Per 1,000 Population 1,000 Service Population 0.14 Multiplied By: BJS Recommendation 2.30 New Officers Needed - Multiplied By:Estimated Cost per Officer 71,077$ Estimated New Cost -$

Estimated Cost for New Officers

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Fire Protection The current Area is currently and will continued being served by the Vincennes Township Fire Protection District (“District”), however IC 36-4-3-7 (e) provides if the fire protection district from the City annexes is indebted or has outstanding unpaid bonds or other obligations at the time the annexation is effective, the City is liable for and shall pay that indebtedness in the same ratio as the assessed valuation of the property in the annexed territory bears to the assessed valuation of all property in the fire protection district. The District currently has outstanding debt of $695,265 comprising from the 2010 and 2013 Equipment Loans. The annual debt service payments for Pay 2015 is $184,308 of which approximately $3,373 will be the responsibility of the City.

Street and Sanitation A. Summary of Costs

Aside from paving, routine maintenance is performed by the Streets and Sanitation Department. The Streets and Sanitation Department currently expend $8,666 for each mile in the City including the costs for solid waste (trash) and recycling. The Area will add 0.80 additional road miles at a total estimated cost of $6,933.

B. Method of Financing

The total estimated costs associated with Street and Sanitation Services will be funded by a combination of general fund, motor vehicle highway fund, and/or local road and streets fund revenues.

Vincennes Township Fire District

NAV of Annexed Parcels -

Vincennes Township

Pay 2015 NAV of Total Fire

District

Debt Ratio

Area 5 6,921,879$ 378,622,008 1.83 %

2015 Debt Service PaymentTimes: Area 5 Portion 1.83 %Estimated City costs 3,373$

Debt 184,308

Cost per Mile 8,666$ Multiplied by: Area Miles 0.80 Estimated New Cost 6,933$

Street and Road Costs

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C. Plan for Organization and Extension of Services Street and Sanitation and all other related services will be provided in the same standard and scope provided to other areas within the corporate boundaries and will begin one (1) year after the effective date of the annexation.

Animal Shelter The Vincennes Animal Shelter (“Shelter”) is responsible for the welfare and control of animals within the City. The Shelter serves stray, homeless or surrendered animals and attempts to find new homes for these animals. Per the City, the Shelter receives approximately 100 calls from areas outside the City limits each year. In addition, forty percent (40%) of the animals that are picked up by the Shelter’s staff are kept at the shelter for vaccinations and care.

A. Summary of Costs

The total estimated costs associated with the Shelter of $315. B. Method of Financing

The total estimated costs will be funded by the City’s General Fund, which is primarily funded from property taxes. C. Plan for Organization and Extension of Services

Animal Shelter Services and all other related services will be provided in the same standard and scope provided to other areas within the corporate boundaries and will begin one (1) year after the effective date of the annexation.

Annual Cost per Call 30$ Multiplied by: Annual Calls 100 Estimated New Cost 3,000 Multiplied by: Area 4 % to Total % 4.49%Estimated Allocated Cost to Area 4 135$

Animal Shelter Response Calls

Number of Animals Detained 100 Multiplied by: % Retained at Shelter 40%Number of Animals in Shelter's Care 40 Multiplied by: Cost per Animal 100$ Estimated New Cost 4,000 Multiplied by: Area 4 % to Total % 4.49%Estimated Allocated Cost to Area 4 180$

Animal Shelter Response Calls

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Inspector’s Office The City Inspector’s Office enforces the Vincennes City Code of Ordinances. The Inspector’s Office receives reports of violations via email or letter. The Inspector’s Office oversees complaints regarding tall grass, weeds, trash, junk etc. Based on meetings with the City, there are no additional expenses associated with serving the Area. Cemetery There are no cemeteries in the Area that will be operated or maintained by the City. Any cemeteries in the Area will continue to be maintained by current operations. Sewer, Water, and Stormwater Services There are no new operating expenses in regards to utility services to the Area. The various utility departments do not anticipate hiring additional staff nor requiring other additional resources (or costs) to provide services to the Area. Other Administrative Services Other administrative services include the offices which provides constituent services which support other departmental operations of the City, including the Mayor’s Office, Clerk Treasurer’s Office, the City Council, Parks and Recreation, and the City Engineer. Services provided by the above offices/departments are accessed through interaction with officers, members, and staff, and in some cases (Parks and Recreation) may require the payment of fees. The offices/departments do not anticipate hiring additional staff nor requiring other additional resources to provide services to the Area. Capital Improvement Services The Area will be provided services of a capital improvement nature in the same manner as those being provided to the City’s current corporate boundaries and in a manner consistent with federal, state, and local laws, procedures, and planning criteria. All planned services of a capital nature will be provided to the Area within three (3) years after the effective date of the annexation. The description of such capital services, the estimated annual cost (totals rounded to the nearest dollar) to the Area, and the fund or funds that will be used to pay for services are described below. Each of the funds identified are subject to annual appropriation by the City Council, with the exception of any bond proceeds (which are appropriated at the time the bonds are authorized) if bonds are issued. Any bond issue must be authorized by a bond ordinance or resolution adopted by the City Council.

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The services of a capital improvement nature identified by the City include both sewer and water utility improvements. There are no anticipated capital costs associated with providing police and fire protection, street and sanitation services, animal shelter services, inspector’s Office services, cemetery services or other administrative services to the City. All costs, including vehicle costs, were included in the estimated expense found under the Non-Capital Services section above and viewed as part of normal ongoing operations. In addition, the City has determined there will be no new capital costs relating to stormwater improvements. Sewer Capital Improvements A. Summary of Costs

The City currently does not serve any customers within the Area. The proposed annexation of the Area will require capital improvements of approximately $1.6 Million that will enable the Sewage Works to serve the anticipated no new customers due to the annexation of the Area. B. Method of Financing

The City would anticipate issuing a $1,845,000 proposed Sewage Works Revenue Bond to fund the $1.6 Million capital costs. The estimated par amount of $1,845,000 assumes a $1.6 million project fund, twenty (20) year level amortization schedule, flat 4.5% interest rate, a debt service reserve funded at the maximum annual debt service payment and costs of issuance. The estimated maximum annual debt service payment is approximately $142,000. C. Plan for Organization and Extension of Services

Sewer capital improvements will be provided to the Area within three (3) years after the effective date of the annexation. Water Capital Improvements A. Summary of Costs

The City currently serves seventy-two (72) Residential customers within the Area. The proposed annexation of the Area will not require any capital improvements. B. Method of Financing

No capital needs are needed in the Area. C. Plan for Organization and Extension of Services

If any Water capital improvements are needed, they will be provided to the Area within three (3) years after the effective date of the annexation.

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Stormwater Capital Improvements There are no new capital expenses that are stormwater in nature that are applicable to serving the Area.

Section IV: Estimated Pro Forma Revenues The purpose of this section is to compare the estimate pro forma revenues that may be generated as a result of the proposed annexation of the Area. Revenues Revenues which may be collected as a result of the proposed annexation are dependent upon one or more of several variables such as, the source of the revenue (e.g., State or local grant distributions), the total amount of revenue to be distributed, statutory distribution formulas, and local ordinances. Several funds of the City may be affected by an annexation and funding for services and capital improvements, where required, may be derived from several sources. The primary source of revenues will come from the General Fund, which includes:

• Ad Valorem property taxes, Financial Institutions Tax, and Auto and Aircraft Excise, Wheel Tax, and Surtax Excise;

• County Option Income Tax Revenue; • County Economic Development Income Tax Revenue; • License and Permit Revenue; • Inter-governmental revenue; • Charges for services; • Fine and Forfeitures; and • Other Miscellaneous Revenue.

Motor Vehicle Highway Funds and Local Road and Street Funds consist primarily of revenues derived from State motor fuel taxes. Property taxes are the main source of revenue to be received from the Area. Increases in property tax revenue are primarily determined by one of two methods, depending upon the type of property tax levied. In both cases, the basic determinant of the property tax revenue increase is the incremental increase in assessed value from the proposed annexation Area. The two methods are explained below. Method One – Maximum Permissible Levy Increase IC 6-1.1-18.5 provides that the maximum permissible ad valorem property tax levy (the “Maximum Permissible Levy”), which applies to certain property tax levies in the aggregate and not by individual fund, may be increased by the percentage increase in the City’s assessed valuation due to the proposed annexation.

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SECTION IV: - ESTIMATED PRO FORMA REVENUES (Continued)

The City is permitted to increase its Maximum Permissible Levy, after application of the Assessed Value Growth Quotient (AVGQ) formula, by the percent which is calculated by taking the assessed value of the Area and dividing it by the assessed value of the City in its current corporate boundaries. (The AVGQ formula is based on the average change in Indiana non-farm personal income for each of the six years preceding the year in which a budget is adopted.) For Pay 2015, the assessed value of all real property in the City is $410,948,528. The assessed value of the real property for the Area is $6,921,879. Therefore, the adjustment to the Maximum Permissible Levy for the payable year after the effective date of the annexation will be approximately as follows:

(1) NAV provided by the Knox County Auditor (2) 2015 Values per the 2015 Fund Report

The estimated new revenue that may be raised from the Maximum Permissible Levy will equal the estimated Maximum Permissible Levy for Pay 2015 times the estimated AVGQ for Pay 2016. For purposes of the Report, Crowe has assumed that the Pay 2016 AVGQ will be equal to the Pay 2015 AVGQ of 2.7%. The Indiana Department of Local Government Finance (DLGF) has certified the Pay 2015 Maximum Permissible Levy for the City to be $7,764,202 (excluding Financial Institutions Tax). The DLGF also has approved the City’s budget, property tax levies and property tax rates, and has determined that the City is $119 below its Maximum Permissible Levy. Assuming an AVGQ of 1.027 for Pay 2015, the estimated new revenue from annexing the Area, beginning following the effective date of the annexation, would be as follows:

The actual amount of new revenue raised from the adjustment of the Maximum Permissible Levy due to annexation of the Area may be different from that proposed by the City for the Pay 2016 annual budget and is subject to both City Council and DLGF approval. Estimated Circuit Breaker Adjustment to Maximum Permissible Levy Although aggregate levy and rate controls are applied at the fund level, legislation passed by the Indiana General Assembly has modified an existing property tax control at the individual property taxpayer level (the “Circuit Breaker Tax Credit”). This control provides

2015 NAV of Annexation Parcels (1) 6,921,879 Divided by: Assessed Value of the City (2) 410,948,528$ Increase in NAV 1.68%

Calculation of Percent Increase Due to Annexation (Total)

2015 Factored Adjusted Levy 7,764,202$ Times: Pay 2015 AVGQ 1.027 Fiscal Year 2015 Base Maximum Levy 7,973,835 Times: Annexation Factor 1.68%Estimated Net New Revenue 133,961$

New Maximum Levy Due to Annexation 8,107,796$

Maximum Permissible Levy Adjustment

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that, for taxes due in 2010 and thereafter, the circuit breaker tax credit is granted for a property tax liability in excess of one percent (1%) for homestead-eligible property, two percent (2%) for other residential real property (generally, apartments and rental homes), long-term care facilities, and agricultural land, and three percent (3%) for all other real and personal property. Taxes credited to each taxpayer shall result in a revenue reduction to each affected taxing unit, and the revenue lost may not be made up by a unit through the levying of additional property taxes or borrowing funds. Therefore, potential growth in assessed value otherwise captured by the annexation of the Area may have a limited indirect effect on the capability of levy-controlled funds to raise required property tax revenues to the extent that growth in property assessed values are limited, resulting in individual property tax rates which exceed the property tax caps. The 2014 Circuit Breaker loss to the City was $2,381,326 and $45,080 for Vincennes Township. As stated above, the resulting loss of property tax revenue is determined at the individual taxpayer level based on aggregate property tax rates in effect in the year in which taxes are payable for the taxing district in which the Area is located. For purposes of revenue estimations, Crowe has assumed that the increase in property tax collections would be reduced by approximately 25%, which represents the City’s average circuit breaker loss compared to the City’s certified levy for the last six (6) years. Given the increase in assessed valuation, the City may actually see a reduction in tax rates and thus reduction in circuit breaker assuming all other overlapping units are held constant. Method Two – Rate Controlled Levies Property tax levies subject to rate controls require that the property tax rates applied per $100 of assessed value be established and maintained at a fixed amount, subject to statutory adjustments for events not related to real growth in property values such as reassessment or re-establishment of the rate by the City under the maximum rate provided in law. Therefore, increases in revenue usually will come from increases in assessed valuation of the City. The revenue formula is described below.

Tax Revenue Formula (Rate Controlled Funds)

AV/100 * T = TR WHERE: AV = Assessed Valuation T = Tax Rate TR = Tax Revenue The City currently levies a tax rate for its Cumulative Capital Development Fund.

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(1) NAV provided by the Knox County Auditor County Option Income Tax Knox County has imposed a County Option Income Tax (COIT) at a rate of 0.60% on the adjusted gross income of resident tax payers. Income taxes are distributed to eligible local units based on the proportion of certain property tax levies for the unit government as it bears to the total of all of the same levies for all eligible units in the County. For FY 2015, the City’s distributive share is $1,441,407 or approximately 34% of the total distributive shares of $4,272,058. To estimate the change in proportion of all taxing units receiving COIT distributive shares, the estimated increase in the City’s Maximum Permissible Levy due to annexation has been adjusted to Pay 2015 levels and the remaining County adjusted abstract levies held constant (other than the City). Moreover, the total amount certified as distributive shares is held constant. Based on these adjusted levies, the City’s expected increase in COIT revenue due to the annexation would be approximately $13,478.

2015 NAV of Annexation Parcels (1) 6,921,879$ Divide by: One-Hundred Dollars 100.00 2015 NAV (in hundreds) 69,219 Times: Tax Rate 0.0486

Estimated Tax Revenue 3,364$

Tax Revenue Formula - Rate Controlled Cumulative Capital Development Fund

FY 2015 EstimatedAllocation Annexation Adjusted AllocationAmount Adjustment Amount* Difference

City of Vincennes 9,198,850.27$ 130,439$ (1) 9,329,289$ 130,439$

Total Eligible Units Within County (2) 27,263,660.97 130,439 27,394,100 130,439

Percent City Distribution 33.74% 34.06% 0.32%

Distributive Shares 4,272,058 4,272,058 -

City of Vincennes Distributive Share 1,441,407 1,454,885 13,478$

Total for Eligible Units other than City of Vincennes (2) 2,830,651 2,817,173 (13,478)$

(1) Net increase in maximum levy due to annexation adjustment deflated by AVGQ of 1.027.(2) All other units combined* Estimated adjusted allocation amount will be for 2016 distributions.

Estimate of City's Additional County Option Income Tax Revenue

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County Economic Development Income Tax Knox County has imposed a County Economic Development Income Tax (CEDIT) at a rate of 0.40% on the adjusted gross income of resident tax payers. A CEDIT rate is imposed on the same income tax base as COIT; however, the revenues are distributed only to cities, towns, and the county unit, not to other taxing units such as schools, townships and libraries. For FY 2015, the City’s distributive share is $1,218,024 or approximately 41% of the total distributive shares of $2,989,814. The City’s expected increase in CEDIT revenue due to the annexation would be approximately $11,360.

FY 2015 EstimatedDistribution Annexation DistributionNumerator Adjustment Numerator* Difference

City of Vincennes 8,234,993$ 130,439$ (1) 8,365,432$ 130,439$

Total Eligible Units Within County (2) 20,213,971 130,439 20,344,410 130,439

Percent City Distribution 40.74% 41.12% 0.3800%

Distributive Shares 2,989,814$ 2,989,814$ -

City of Vincennes Distributive Share 1,218,024 1,229,384 11,360$

Total for Eligible Units other than City of Vincennes (2) 1,771,790 1,760,430 (11,360)$

(1) Net increase in maximum levy due to annexation adjustment deflated by AVGQ of 1.027.(2) All other units combined* Estimated adjusted allocation amount will be for 2016 distributions.

Estimate of City's Additional County Economic Development Income Tax Revenue

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Motor Vehicle Highway and Local Road and Street Funds State road distributions, Motor Vehicle Highway (MVH) distributions and Local Road and Street (LRS) distributions, are primarily generated from State gasoline taxes. These taxes are distributed to the State Highway Fund, counties and cities and towns based on a complex formula. The main distribution factor for cities and towns is population based. Based on this comparative analysis, the estimate of additional MVH funds due to annexation is approximately $4,443.

LRS Distributions are based on a formula that distributes the amount of State funds granted to Knox County using both population and street miles. Twenty percent (20%) of the total LRS funds are distributed on the basis of the City of Vincennes’s population to the total population of Knox County (after the next published decennial census) and eighty percent (80%) is distributed on the basis of the total amount of street miles in the City to the total number of street miles in the County. Based in the 2010 decennial census, the City’s proportion of its population (18,423) to that of the all of Knox County (38,440) was 47.927%.

City of Vincennes Total Current Population 18,423 Times: 2015 Budget Revenue Estimate 31.07$ Distribution prior to Annexation 572,403

Additional Population - Annexation Area 143

City of Vincennes Population After Annexation 18,566 Times: 2015 Budget Revenue Estimate 31.07$ Distribution after Annexation 576,846

Net Estimated Additional Distribution 4,443$

Estimate of City's Additional Motor Vehicle Highway Fund Revenue

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Based on a 2014 total distribution of approximately $385,656, the estimated additional LRS funds due to annexation is an estimated $2,634.

Total FY 2014 Distribution - County Units 385,656$ FY 2014 City Distributive Share 69,670

Population - 20% Current City of Vincennes Total Population 18,423 Add: Additional Population - Annexation Area 143 City of Vincennes Total New Population 18,566 Divided by: Knox County Total Population 38,440 Current Ratio of City to County Population 48.299 %Weighting at .2 9.660 %Times: FY 2015 Distributive Shares = New Distribution 37,253$

Street Miles - 80%City of Vincennes Current Street Miles 112.06 Add: Additional Street Miles - Annexation 0.80 Vincennes Total Street Miles after Annexation 112.86 Knox County Unit Street Miles After Annexation 880.56 Total City and County Street Miles After Annexation 993.42 Ratio of Vincennes to Total County Unit Street Miles After Annexation 11.361 %Weighting at .8 9.089 %Times: FY 2015 Distributive Shares = New Distribution 35,051$

Distribution after Annexation 72,304$ Distribution prior to Annexation 69,670

Net Estimated Additional Distribution 2,634$

Estimate of City's Additional Local Road and Street Fund Revenue

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Additional Motor Vehicle Highway Special 1 and 2

Total FY 2014 Distribution - County Units 76,553$ FY 2014 City Distributive Share 13,830

Population - 20% times Total FY 2014 DistributionCurrent City of Vincennes Total Population 18,423 Add: Additional Population - Annexation Area 143 City of Vincennes Total New Population 18,566 Divided by: Knox County Total Population 38,440 Equals: Ratio of City to County Population after Annexation 48.299 %Weighting at .2 9.660 %Times: FY 2014 Distributive Shares = New Distribution 7,395$

Street Miles - 80% times Total FY 2014 DistributionCity of Vincennes Current Street Miles 112.06 Additional Street Miles - Annexation 0.80 Vincennes Total Street Miles after Annexation 112.86 Knox County Unit Street Miles After Annexation 880.56 Total City and County Street Miles After Annexation 993.42 Ratio of Vincennes to Total County Unit Street Miles After Annexation 11.361 %Weighting at .8 9.089 %Times: FY 2014 Distributive Shares = New Distribution 6,958$

Total New Distribution 14,353$ Less: Current Distribution 13,830 Net Estimated Additional Distribution 523$

Estimate of City's Additional MVH Special 1 Revenue




Net Estimated Additional Distribution 183$

Estimate of City's Additional MVH Special 2 Revenue

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Alcoholic Beverage Tax Alcoholic beverage tax is an Indiana excise tax that is imposed on every gallon of alcoholic beverage sold. The amount set aside for cities and towns is distributed on a per capita basis.

Additional Cigarette Tax – General Fund and Cumulative Capital Improvement Fund (CCIF) The amount distributed to cities and towns is dedicated partly (3/14ths) to the municipalities’ general fund and partly (11/14ths) to their Cumulative Capital Improvement Funds (CCIF). Pursuant to IC 6-7-31.1(b) the amount deposited in the CCIF may be transferred to the General Fund any time after receipt. The amount receipted to such units is based on a factor provided by the State multiplied by population.





Estimate of City's Alcoholic Beverage Tax Distributions





Estimate of City's Additional Cigarette Tax Distributions - General Fund

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Sewer Utility Revenues The City currently does not serve any customers within the Area. The City anticipates it will serve seventy-two (72) new customers due to the annexation of the Area. The City anticipates an increase in annual revenues of approximately $21,470.





Estimate of City's Additional Cigarette Tax Distributions - CCIF Fund

Residential CommercialPre-Annexation (1)Number of Customers - Annexation Area - - Multiplied by: Average Monthly Bill 37.30$ 46.63$ Estimated Monthly Revenue - - Times: Annualize 12 12Estimated Annual Revenue - -

Post-Annexation (2)Number of Customers - Annexation Area 72 - Multiplied by: Average Monthly Bill 24.85$ 31.06$ Estimated Monthly Revenue 1,789.20 - Times: Annualize 12 12 Estimated Annual Revenue 21,470 -

Net Revenue to the City of Vincennes 21,470$ -$

(1) Customers are currently charged outside City rates.(2) Customers will be charged inside City rates post annexation.

Note: Average bills provided by Utility. Per Utility, increase residential billby 25% to arrive at estimated commercial bill.

Sewer Utility Revenue Analysis

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Water Utility Revenues The City currently provides water services to the Area and serves 72 customers. The estimated decrease in revenues of approximately $5,763 is due to a change in customer classification. Currently, Area customers are charged outside City customer rates at an average monthly bill of $20.01 for residential customers and $25.01 per month for commercial customers. After the proposed annexation, the estimate average month bill for Area residential and commercial customers is $13.34 and $16.69, respectively.

Residential CommercialPre-Annexation (1)Number of Customers - Annexation Area 72 - Multiplied by: Average Monthly Bill 20.01$ 25.01$ Estimated Monthly Revenue 1,440.72 - Times: Annualize 12 12 Estimated Annual Revenue 17,289 -

Post-Annexation (2)Number of Customers - Annexation Area 72 - Multiplied by: Average Monthly Bill 13.34$ 16.68$ Estimated Monthly Revenue 960.48 - Times: Annualize 12 12 Estimated Annual Revenue 11,526 -

Net Revenue to the City of Vincennes (5,763)$ -$

(1) Customers are currently charged outside City rates.(2) Customers will be charged inside City rates post annexation.

Note: Average bills provided by Utility. Per Utility, increase residential billby 25% to arrive at estimated commercial bill.

Water Utility Revenue Analysis

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Stormwater Revenues The City currently does not serve any customers within the Area. Post-annexation, the City will acquire 72 customers. All customers will be required to pay a monthly stormwater fee. The monthly fee per equivalent residential unit (ERU) is $3.00 per month. Per representatives of the Vincennes Municipal Stormwater Utility, the average ERU per commercial customer is 4.5 ERUs. The table below provides the estimated new revenue to be acquired from the Area.

Residential Commercial

Number of Customers 72 - Times: Monthly ERU 1.00 4.50 Estimated ERUs 72.00 - Times: Monthly Fee per ERU 3.00$ 3.00$ Estimated Monthly Revenue 216.00 - Times: Annualize 12 12 Estimated Annual Revenue 2,592 -

Total Annual Revenue 2,592$

Stormwater Utilty Revenue

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SECTION V: - REVENUES AND EXPENDITURES The purpose of this section is to summarize the revenues and expenditures detailed in the Report. A. One Year Summary of Expenditures and Revenues Expenditures that were reported in the section on Municipal Services are summarized in the table below. Capital costs are one-time capital equipment expenditures, while annual operating costs are continuing expenses.

Estimated RevenuesProperty Taxes 133,961$ Less: Circuit Breaker Reduction (33,624) Cumulative Capital Development Fund 3,364 County Option Income Tax 13,478 County Economic Development Income Tax 11,360 Motor Vehicle Highway Funds 5,149 Local Road and Street Funds 2,634 Alcohol Beverage Tax 296 Cigarette Tax (General Fund) 100 Cigarette Tax (CCI Fund) 369 Total Revenues 137,087

Estimated ExpendituresPolice Protection Services - Portion of Fire District Debt 3,373 Street and Sanitation 6,933 Animal Control 315 Total Expenditures 10,621

Net Revenues Over Expenditures 126,466$

Note: Circuit Breaker is based on average loss - may be materially different.

One Year Summary of New Expenditures and Revenues

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SECTION V: - REVENUES AND EXPENDITURES (Continued)

RevenuesSewer 21,470$ Water (5,763) Stormwater 2,592 Total Revenues 18,299

ExpendituresBond Issue - Sewer: Estimated Maximum Annual Debt Service 142,000 Total Expenditures 142,000

Net Revenues Over Expenditures (123,701)$

(1) Assumed cash funded over three years

One Year Summary of New Expenditures and Revenues - Utilities

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SECTION VI: - APPENDIX A: PROPOSED TIMELINE OF LEGAL STEPS

Appendix A – Proposed Timeline of Legal Steps

Date Activity

1/29/15

Working group meeting

3/9/15 Introduction and first reading of Annexation Ordinances and adoption of Resolutions adopting fiscal plans

3/10/15 Send notice of Annexation Ordinances public hearing to newspaper

3/13/15 Notice of public hearing on Annexation Ordinances sent by certified mail and Notice of public hearing on Annexation Ordinances published in newspaper

5/12/15 Sixty-day waiting period expires

5/18/15 Special meeting and public hearing on Annexation Ordinances

6/17/15 Thirty-day waiting period expires

6/22/15 Adoption of Annexation Ordinances

6/23/15 Notice of Adoption of Annexation Ordinances sent to newspaper; Notice (I.C. 36-4-3-7(d)(2)) sent to Fire District

6/26/15 Notice of Adoption of Annexation Ordinances published in newspaper

9/24/15 Ninety-day waiting period expires

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SECTION VII: - PROPOSED AREA

Appendix B – Proposed Area

A. Figure 1: Area 5

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annexation fiscal plan: area 5 city of vincennes, indiana · contiguity . ic 36-4-3-1.5 defines an...

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