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CITY OF EVERETT FISCAL ANNEXATION ANALYSIS <br /> estimating that the following costs are eligible for sales tax credit: (1) direct operating impacts from <br /> annexation, (2) allocation of a portion of fixed costs (such as Fire Chief's salary), (3) annexation- <br /> related equipment costs, and (4) annexation-related additional facility costs. Capital infrastructure <br /> costs (road construction, surface water management, etc.) are assumed to not be eligible. <br /> As the Exhibit 14 demonstrates, Everett would likely not need the full amount of sales tax credit <br /> available in all years. It is best to think of the potential availability of additional state sales tax credit as <br /> an added level of insurance to mitigate potential financial risks associated with annexation. As <br /> mentioned in the prior section, Detailed Feasibility Analysis: Scenarios 3& 4, facilities for police are <br /> currently at or exceeding capacity and would require additional investment, and there may be <br /> additional significant transition costs that are not modeled in this analysis. The City may want to use <br /> the sales tax credit capacity to mitigate these annexation costs. <br /> EL Final Report:October 2006 Page 26 <br />