By Joseph S. Pete, Daily Journal of Johnson County staff writer
Greenwood's planned annexation of 3.7 square miles to the city's southwest would be an immediate financial boon for the city, unlike most annexations, a city official said.
The city immediately would see a boost in tax revenue without having to pay to bring municipal services to the already developed area east of State Road 135 and south to Whiteland Road. Greenwood planning director Ed Ferguson said it would be unlike most annexations, where cities initially lose money.
The city won't have major upfront costs because the land already is largely developed, and no significant roadwork is required in the area, Ferguson said.
Greenwood's total tax revenue would increase by nearly $250,000 after the involuntary annexation, the city estimates. The land also is ripe for development, which would boost tax revenues further, Ferguson said.
Whether Greenwood can annex the full 3.7 square miles of land it wants will be settled in court. Bargersville already approved an annexation of about 1.3 square miles east of State Road 135 that Greenwood wants and where both municipalities have spent money on sewer utilities.
Bargersville estimates it would have to spend $93,000 up front to provide services to the 1,800 acres it plans to annex. The town's fiscal plan has no estimate of how much revenue the annexation area would bring in, but it's expected to boost the town's tax base as it develops.
Residents in the now unincorporated area Greenwood wants to annex will continue to pay full taxes to the county, but they also would pay a city or town tax to cover costs for municipal services.
Greenwood's annexation targets the proposed Lone Pine Farms subdivision, which is stalled because of the low demand for new housing but which the city agreed to provide services to. The city's annexation is involuntary, while Bargersville's annexation area has the signed written consent of 90 percent of the property owners, mostly developers.
The Greenwood City Council is considering the annexation just two weeks after approving a study of whether the city should merge with the entire unincorporated Center Grove area.
"The numbers show a positive cash flow over the next four years, and those numbers predict little to no growth over the next four years," Ferguson said. "Without knowing when the housing economy is going to leap off and rebound again, we didn't feel safe to make any immediate projections in the next two or three years."
Property taxes are paid a year in arrears, so the city could bring in more money than anticipated when the economy picks back up, he said.
The city looked at what the immediate impact would be, such as the eight miles of roads that it would have to maintain that are now maintained by county government, Ferguson said. Once annexed, those roads would require maintenance and sweeping from the city, he said.
Greenwood won't have to worry about new streets in the immediate future, though much of the land is agricultural and a short commute from Indianapolis, Ferguson said.
"We've heard rumors of one new apartment complex going up, but no new housing developments are planned in the area," he said.
The annexation area includes an estimated 970 residents, which includes apartment dwellers and retirees in an assisted living community.
Property owners would pay the city more than 30 cents extra in property taxes per $100 in assessed valuation, which is a reduced rate since area residents already pay taxes to the White River Township Fire Protection District, Ferguson said.
Residents of the annexation area wouldn't have to pay Greenwood for redundant fire protection but would pay for police protection, street maintenance, leaf and limb pickup and other city services.
If it annexes the entire area, the city would see its revenue increase by $249,000 a year over the next five years if no further development occurs. That projection includes property taxes and increased shares of state revenues, such as gas and cigarette taxes.
Since the area already is largely developed, Greenwood would only spend an estimated $217,000 a year to offer city services, such as police patrols through the existing subdivisions, Ferguson said.
The Greenwood City Council will have two additional hearings on the annexation before it comes up for final approval.