Council discusses possible annexation of Federal Cartridge/CCI Spear properties; revenue impacts mixed

Councilor Klein opened a discussion about annexing two CCI Spear properties (Federal Cartridge Company facilities) on Snake River Avenue and Southport Avenue, asking why a major local business that borders the city does not pay city property taxes. Klein summarized figures prepared for the council: under the 2024 city levy rate, adding the Snake River Avenue property to the city's tax rolls could add approximately $340,000 in nonexempt property taxes and the Southport Avenue property about $221,000, though those increases are subject to statutory caps.

At the same time, staff numbers presented to the council indicated significant decreases to the city's enterprise funds if the properties were annexed. Water and wastewater revenues would fall because properties inside city limits pay lower utility fees: Snake River Avenue annual water/wastewater revenue would fall by approximately $600,000 at current consumption levels and Southport Avenue by about $65,000. The packet also noted a possible $200,000 reduction to the general fund because Federal Cartridge currently holds a separate fire prevention and protection services agreement that city properties do not need if inside city limits.

Councilors discussed those trade-offs. Council President Klieberg and others noted the effect is primarily on enterprise funds rather than general fund revenues, and Councilor Schroeder said annexation would likely be more appropriate if property owners expressed interest. Councilor Forsman urged caution, saying the net fiscal impacts were unclear and more homework was needed. The mayor reminded the council the nonexempt property tax increase is subject to a cap and that annexation may not yield the full estimated tax benefit.

Next steps: councilors indicated interest in further analysis and in possibly opening discussions with the property owners if the city wishes to explore voluntary annexation; no motion to annex was made.