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