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FISCAL IMPACTS FOR AN236 ANNEXATION MARCH 2022 11209 N. Tatum Boulevard, Suite 225 * Phoenix, AZ 85028 * 602-765-2400 tel * 602-765-2407 fax 1 Introduction The following summary presents the fiscal impacts of annexation for the Agua Fria River property, which is currently owned by the City of Glendale but is located outside the city. The annexation application is for 1.1 acres, but since the two areas that make up the 1.1 acres are small slivers of land that are part of a larger site, the impacts for the entire 48-acre site are shown here. The city is anticipating annexing the 1.1 acres, and adding them to the 48-acres that are already annexed, to create a larger parcel that is being considered for sale. This combined area would likely be used as a sand and gravel quarry since it is located in the Agua Fria riverbed and in a FEMA flood zone. This analysis assumes that the 48-acre site would be sold to a private entity and developed as a quarry. The larger site is located south of Glendale Avenue at approximately the 119th Avenue alignment, in the Agua Fria riverbed. There is no building construction anticipated, since the land would be used for mining. This analysis also assumes no taxable personal property on the site. The point of this exercise is simply to frame what this property could bring to the city in terms of the number and quality of jobs, and the fiscal impacts, assuming it is annexed and sold. Note that the larger 48-acre site, most of which is already within the City of Glendale, is not currently generating any tax revenue since it is municipally owned. Project Assumptions The table below presents the impacts of 48-acres of quarry development in terms of jobs and wage levels, annual fiscal impacts (revenues less expenditures for city operating funds), one-time fees (zero in this case) and overall ranking. The impacts assume no new lane miles would be added to the city for on-going maintenance. IMPACTS OF POTENTIAL USES OF PROPERTY AS PRIVATELY-OWNED QUARRY • Capital investment is represented by a combination of building costs and FF&E, both of which would be zero for this site. • Jobs and average wages are important not only in terms of the number of jobs created, but also the quality of jobs as represented by average wages. To the extent that workers live in Glendale, higher wages translate into more taxable spending and higher value housing. Gravel quarries have very low employment density, typically less than 0.1 persons per acre. For this analysis, employment on the 48-acres is estimated at 3 jobs with an average wage of $74,300.1 1 Bureau of Labor Statistics, Quarterly Census of Employment and Wages, Maricopa County, 2020 (data for NAICS 21231) Acres Building Construction (millions) FF&E (millions) Jobs Average Wage One-Time Fees* Annual Revenues less Expenditures Overall Ranking Sand & Gravel Mining 48 $0.0 na 3 $74,300 $0 $300 Low 2 Fiscal Results • One-time fees are related to construction and are generally proportional to the construction cost. Since no buildings would be constructed on this site, one-time fees are assumed to be zero. • The annual fiscal impacts represent the net value to the city of the sale and development of this property in terms of revenues less expenditures. These annual fiscal impacts are intended to be order of magnitude only. There are a variety of factors imbedded in the assumptions that will affect the magnitude of fiscal impacts for individual uses, including the land value, amount of new street lane miles added, and type of development. The potential quarry use that is anticipated for the Agua Fria River property could result in an estimated net impact to the city of $300 per year, assuming the property is sold to a private party. This net impact is based on estimated annual revenues of $400 and estimated annual expenditures of $100. Summary Given the significant limitations on the types of possible uses for this property, the fiscal impacts to the city would be negligible. The two small annexation areas totaling 1.1 acres are part of larger parcels that are already in the city, and are also owned by the city. This annexation action would essentially facilitate the future sale of the entire 48-acre site.