LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 24, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 307, Committee Report 1st House, Substituted
          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-Committee Report 1st House, Substituted
         
No fiscal implication to the State is anticipated.
         

         
 
          
FISCAL ANALYSIS

This bill would apply to municipalities with 
a population over 500,000 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 San Antonio 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. 
 No response was received by the City of San Antonio.

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.  The City of Houston estimates 
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 a municipality 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 a municipality determines capable of being served by existing 
resources, this bill would require a municipality to hire additional 
staff to maintain the existing ratios.  The City of Houston 
estimates that 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 costs.

The 
City of Houston does not expect that larger annexations in less 
compact areas would 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 require the City of Houston to hire 
an 70 police officers more than anticipated, at an estimated 
additional cost of $3.5 million per year.

          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,TL