A required fiscal report on annexing 93 acres of Firecracker Hill into Nashville explained some costs and benefits but also generated more questions.
One question was when the council will actually annex the property: as soon as possible, or with an effective date that would allow the project to be completed by 2019 instead.
The owners of the Big Woods Brewing Co. family of companies plan to build a distillery/brewery on a small portion of the land and leave the rest “park-like.” They had talked about possibly having part of the development open this year.
The development is expected to increase the town’s assessed value by 2.7 percent, meaning the town will see additional property tax revenue because of it. The extra money “may assist in stabilizing property tax rates for town residents,” the report says.
However, there may be a period of time in which the town is providing services, but the taxes the property is generating won’t cover them. That’s because taxes are paid on the previous year’s property value assessment.
After the development is built, its estimated net assessed value will rise by about $3 million or $4 million, accounting firm Umbaugh projected. But right now, the estimated assessed value is $405,300.
There might be ways the town could recoup that potential levy growth if the development isn’t done by Jan. 1, 2018, the Umbaugh accountants said.
One solution might be doing a new assessment on the property even before it is done so the town could at least capture some of the increased value in taxes before the deadline to calculate them. But nobody present at the meeting knew if that was actually an option.
Another solution might be to make the annexation date legally effective after an assessment is taken, giving the development another year to come together. The town could still make water and sewer service available so construction could proceed. But it would then be able to capture the full value of the improved land for the following tax year.
The town also might be able to apply for an appeal to capture the growth if it isn’t completely done by Jan. 1, the accountants said.
The town council asked for additional information by Thursday, April 6 to help answer some of these questions.
Increasing the size of a sewer line adjacent to the property is expected to cost $167,000, to be paid by the developer, the report says. The cost of water hook-ups is expected to be covered by tap fees.
The town is required to provide police and fire protection, emergency medical coverage, street maintenance, storm drainage and “governmental administrative services” within one year after annexation, though the fiscal report said some services could be provided sooner.