APPENDIX  E

ESTIMATED COSTS AND REVENUES
FOR ANNEXATION AREA 1
NOTTING HILL AREA

Summary

A summary of cost and revenue estimates for Area 1 is as follows:

Detailed cost and revenue estimates are provided on the attached Tables 1 and 2.  There are no intangibles tax revenues included in the revenue estimates.

Comparison of Costs and Revenues for Annexation 1

Year One Costs

·        The costs for Year One are summarized in Table 1.

·        The costs are calculated for the 2001-02 fiscal year.  The annexation is proposed to be effective on June 30, 2001.

·        Town refuse collection will be provided with current positions and equipment.

·        North Carolina G.S. 160A-49.3 requires the Town to contract with or pay qualifying private sanitation firms for two years for their revenue lost due to annexation.  To qualify, a sanitation firm must make a request to the Town and meet other conditions of the statute.  In accordance with G.S. 160A-49.3(b), the Town will make a good faith effort to notify each private sanitation firm providing services in the annexation area.  In the case of Area 1, contract payments will not be required.

·        The annexation area has access to major water and sewer lines. 

·        The Town's police services will be provided with current positions and equipment.

·        The Town's fire services will be provided with current positions and equipment.  There is a marginal cost increase for anticipated emergency response trips to the annexation area and for providing fire related activities such as public fire education, inspections, and expected routine calls for assistance. 

·        The annexation area is currently serviced by the Orange New Hope Volunteer Fire Department.  It is anticipated that the Orange New Hope Volunteer Fire Department will request a ‘First Responder’ agreement with the Town in accordance with G.S. 160A-49.1. 

·        The annexation area has fire hydrants and water supply for fire protection consistent with the rest of the Town.  One additional fire hydrant is recommended.

·        The annexation area can be adequately served by modifying the existing D and C/D routes without additional expense.

·        Transportation Services costs include a prorata share of projected costs of operating demand responsive services (EZ Rider Service and Evening and Sunday Shared Ride Service).

Year One Revenues

·        Year One Revenues are summarized in Table 2.

·        The total 2001-02 real property tax valuation of real estate in the annexation area is $16,797,851 according to Orange County tax records.  The estimated personal property tax valuation in the annexation area is $3,618,000, as of January 1, 2001.

The tax rate for real and personal property is estimated to be $0.51 per $100 for the Town's General Fund. The estimated total General Fund Tax Revenue is $102,038 (98% collection rate).

·        Estimates of franchise tax, sales tax, Powell Bill revenues, vehicle license fees, and beer and wine tax are as follows:

o Franchise Tax              $18,056

o Sales Tax                    $56,209

o Powell Bill Revenue            $11,877

o Vehicle License Fees     $  6,030

o Beer and Wine Tax      $  1,897

·        The total estimated revenue for Annexation Area 1 is $196,107.

Year Two Costs

·        Year Two costs are summarized in Table 1.

·        Town service costs are similar to those experienced in Year One.

Year Two Revenues

·        Year Two Revenues are summarized in Table 2.

·        The estimated real property tax valuation for the 2002-2003 fiscal year (values to be determined as of January 1, 2002) is expected to increase by an estimated $10,000,000.

·        Year Two Revenues are expected to increase significantly due to additional real and personal property tax valuation and increases in state-shared taxes resulting from greater population.  Revenue increases for Year Two are based upon the addition of 192 residences and 422 persons.