One Small Example Of How Tucson Taxpayers Are Forced To Shoulder The City's Growth-At-All-Costs Annexation Policy. By David Devine RECENTLY THAT JOURNALISTIC sinkhole of local sleaze, The Skinny, pointed out the City of Tucson has no way of showing if annexed areas produce a profit for the taxpayers. So we decided to help out by looking at one large annexation from the 1980s. Rita Ranch, on the city's far southeast side, was promoted as a self-sustained community which would develop quickly when it was annexed in late 1984. At the time, the City Council was told by its staff that full development of the project was expected within five years. The project was to include the construction of between 10,000 and 15,000 residential units, development of commercial and industrial facilities, and a population of between 25,000 and 40,000. According to The Arizona Daily Star at the time: "Although almost no one lives there now, a population of up to 40,000 and substantial industrial development are expected within a few years." Because of its certainty that Rita Ranch would develop quickly, the Tucson City Council approved an annexation agreement for the area. This agreement obligated the city to "promptly commence the design, construction and completion of public improvements to parks, libraries, police stations and fire stations...Completion and availability for public use of such improvements shall, in all events, occur not later than December 31, 1990." In addition, the city also agreed to pay for the extension of Valencia Road on the north side of the development. While the developers of Rita Ranch did invest millions of dollars in infrastructure improvements in the project, economic factors resulted in almost no construction occurring for several years. In fact, by 1990 the U.S. Census Bureau reported only 348 people living there. Construction has picked up substantially in the last three years, but even today there are only about 3,500 people living at Rita Ranch. Obviously, the predictions made in 1984 about Rita Ranch were way off. Who could have anticipated what happened? Besides, what difference does it make? To the taxpayers of Tucson, it makes a multi-million dollar difference. At the time of the annexation, it was estimated the area would produce a $6- or $7-million profit for the city over five years. Instead, the development has cost taxpayers millions. To quantify this loss, we can compare the revenues and expenditures for publicly financed capital projects in the development. The city spent $1.5 million on the Valencia Road extension and another $250,000 on developing Rita Ranch Park. In the next few years, another $900,000 will be spent improving the park and $1.5 million on a new fire station. City taxpayers will have spent more than $4 million in capital improvements at Rita Ranch by the end of the 1998. Most of these projects are paid for by bonds financed by the city's secondary property tax. But the city's share of the average property tax bill is so small that a single family home does not produce much revenue. For most homes at Rita Ranch, the city will receive less than $100 a year in secondary property tax receipts. Plus, since there's no commercial development at Rita Ranch and only a few industrial uses, secondary property tax revenues from non-residential sources is minimal. What's the bottom line on how much secondary property tax revenue has been generated by the development since 1985? Based on the rate of development and the price of homes in the area, only about $500,000 has been paid. Before 1992, when construction picked up, almost no taxes had been paid, since hardly anyone lived at Rita Ranch. Thus, during the first five years Rita Ranch was inside the city limits, taxpayers subsidized capital improvements in the development at a cost of $1.75 million. With the two new capital projects now being planned, this subsidy will increase over the next few years to almost $3.5 million. While each annexation has to be looked at separately for profit or loss to the taxpayers, the risk in annexing large tracts of vacant land is obvious from the Rita Ranch example. If the area doesn't develop as anticipated and the city is committed to installing capital improvements in the area, the taxpayers will end up subsidizing the annexation. The city staff philosophy that all annexations they recommend will pay for themselves within five years is a myth. One reason City Manager Mike Brown and his staff won't want to look at the true price of annexation is it will show some are profitable and others are not. That would mean some annexations shouldn't be pursued--not an idea currently in favor at City Hall. Admitting that some annexations don't pay for themselves would mean the city might have to stop subsidizing new development. And that's not something the current city administration seems interested in doing. Instead, they want to keep using taxpayer money to support growth on the edges of the city. Sort of a reverse community-investment strategy, but business as usual for Tucson.

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