LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  February 19, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 307
          Committee on Intergovernmental Relations                              By: Madla
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB307 ( Relating 
to annexation service plan requirements for certain municipalities.) 
this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB307-As Introduced
         
No fiscal implication to the State is anticipated.
         

         
 
          
FISCAL ANALYSIS

This bill would apply to municipalities with 
a population over one million and affect the service plan requirements 
for annexations.  This bill would require that such municipalities 
increase the number of emergency medical personnel, police officers, 
and firefighters to maintain the same per capita ratio of personnel 
to population that existed before the annexation.

METHODOLOGY

The 
Cities of Houston and Dallas are the only municipalities that 
would currently be affected by this bill.  Both were contacted 
to estimate the fiscal implications of this bill on local governments.

The 
City of Dallas does not anticipate any annexations for at least 
the next five years.

Currently, the City of Houston does 
not base staffing levels for law enforcement or emergency medical 
personnel on population.  Other factors such as number of crimes, 
calls-for-service, response times, and shift relief are used 
to determine desired department sizes. After some annexations, 
these factors dictate that the City of Houston hire additional 
personnel in these areas; in other cases, existing staffing 
levels are deemed adequate.

In 1996 the City of Houston annexed 
three separate areas of approximately 1,400 to 2,000 residents. 
 Resources were determined adequate by the police and fire departments 
to serve these new areas, without the addition of new personnel. 
 Another 1996 annexation added 45,000 residents to the City 
of Houston.  In this case, it was determined that staffing levels 
be raised by 159 fire fighters and 83 police officers.  It is 
estimated that an additional firefighter or police officer costs 
approximately $50,000 each per year, including salaries and 
benefits.  The Houston population in 1996 was 1,654,620 before 
annexations.  The ratio of residents to police officers was 
1:316; the ratio of residents to fire fighters was 1:536 (emergency 
medical personnel are housed within fire departments in Houston).

FIVE 
YEAR IMPACT

The fiscal implications of this bill over the 
next five years will depend on the number of annexations enacted 
by the City of Houston during the period and the specific characteristics 
of each area annexed.  In annexations involving compact areas 
close to existing fire, police and emergency services which 
the city determines capable of being served by existing resources, 
this bill would require Houston to hire additional staff to 
maintain the existing ratios.  This would cost the city an estimated 
$251,000 more per year in staffing costs per 1,000 residents 
annexed, plus the cost of  new equipment and facilities to accommodate 
the additional personnel.  However, since the city adds police 
officers in increments of five and firefighters in companies 
of 16, even the smallest annexation would result in new costs 
of $1.05 million per year, plus equipment and facilities.

Larger 
annexations in less compact areas would not be affected as significantly 
by this bill, as the city already adds staff in such situations. 
 After a 1996 annexation of 45,782 new residents, the city added 
83 police officers and 159 fire fighters (although not all new 
staff has yet finished training in the academy).  The fire fighter 
to resident ratio was actually improved, from 1:536 to 1:524. 
 However, the increase in police officers was not enough to 
maintain the previous ratio of 1:316, falling to 1:320.  In 
a case such as this, this bill would required the City of Houston 
to hire an 70 police officers than anticipated at an additional 
cost of $3.5 million per year.

No fiscal impact to the City 
of Dallas is anticipated.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,TL