LAPEL — There was a lot of confusion at the last meeting of the Lapel Town council July 3, after no one brought a copy of the fiscal impact of the town's proposed annexation.
Concerned citizens came to the meeting with questions about possible tax increases, but those questions went unanswered.
None of the council members or Lapel's clerk/treasurer brought the plan to the meeting. Copies of the plan were available at the town's main office.
The Herald Bulletin obtained a copy of the fiscal plan in order to provide some clarity on the changes coming if the annexation goes through.
The proposed annexation area is 5,725 acres and stretches from the town's current borders south to County Road 700 South near Interstate 69. There are 120 residential structures and six commercial structures in the proposed area.
Despite the added area, the town doesn't anticipate needing to add extra officers to its police force once the annexation goes into effect.
"The town will provide police service to the annexation area through the extension of existing patrol areas with existing personnel," the plan read.
The town currently employs four full-time officers and one part-time officer.
The big question at the meeting was about taxes and whether or not those in the annexation area would see an increase in their taxes as a result of being incorporated into Lapel.
Currently, those living in Stony Creek Township have a tax rate of $2.75 per $100 of assessed value. Green Township citizens are paying $2.30 per $100 for 2014. The added property tax rate for living in Lapel is currently $0.54. So the new citizens of Lapel would be looking at an additional $0.54 per $100 of assessed property value if the annexation goes through.
Muddying the waters on taxes though is the state's property tax caps. That amendment, passed in 2010, limits the amount taxpayers can pay on property tax to 1 percent of a property owner's gross assessed value. In other words, for a property valued at $100,000, the most the owner could pay is $1,000.
The town currently doesn't know how many of the homeowners in the annexation area have hit the property tax cap. If they have, the new Lapel tax wouldn't have any impact on them.
Council member Tim Munro said at the July 3 meeting said he believes most homeowners wouldn't see an increase at all.
According to the fiscal plan, Lapel could see an increase of between $72,000 and $105,000 in property tax income. If all parcels in the area are already paying the maximum allowable under the tax cap law, the increase would be $72,000. The $105,000 increase would be if no property owners have hit the maximum yet.
The plan said the town intends to pay for municipal service extensions through the additional revenue it receives from the annexation.
"The town will seek to assure that all proposed development offers a balance between the cost of services demanded and the revenues produced," the plan said.
In addition to added costs stemming from extending services such as water and gas, maintaining 10 miles of new roads would be another added expense for the town.
Based on expenses from 2012 and 2013, the plan estimates maintaining the new roads will cost Lapel $21,924 per year in addition to the $29,961 the town already spends per year on its current roads.
The town will hold additional public hearings on Aug. 7 and Sept. 11.