North Richmond residents can expect bills to rise with annexation

Richmond council proceeds tentatively on North Richmond annexation

North Richmond residents can expect their bills to go up if the city of Richmond is successful in annexing the unincorporated area of Contra Costa County, according to a financial analysis presented to Richmond City Council on Tuesday.

For years, Richmond Mayor Tom Butt and other elected officials have proposed bringing North Richmond under the city’s jurisdiction, saying in part that annexation would better address public safety by having the Richmond Police Department monitoring the area rather than the Contra Costa County Office of the Sheriff.  Annexation, the mayor added, would correct an injustice that dates back before WWII, when Richmond neglected to incorporate North Richmond “because it was largely poor and black.”

But the mayor has acknowledged that annexation is a complex process that is expected to be costly to the city, and to also increase costs for North Richmond’s roughly 3,700 residents. On Tuesday, analysts with Willdan Financial Services presented its findings on those cost impacts to council.

Council did not vote Tuesday on whether to move forward with the annexation process, deciding to discuss the matter further at its Oct. 17 meeting.

The cost

The city of Richmond, which has struggled in recent years to balance budget deficits, would need to pay an extra $2.2 million annually after incorporating North Richmond, as the cost to provide services to the community would surpass the revenue generated by North Richmond. That doesn’t account for one-time and ongoing capital needs, analysts say.

North Richmond residents will also pay more. Richmond residents pay higher property taxes, so someone who owns a North Richmond home valued at $100,000 would need to pay an extra $140 annually in property taxes, according to the financial analysis.

North Richmond residents don’t currently pay utility user taxes, which they would be required to pay in Richmond. Also, Richmond’s sales tax is 1 percent higher than the county’s. And in Richmond, garbage collections for three months is $10 higher than in North Richmond.

Additionally, business license fees are two times higher in Richmond (per employee it’s about four times higher than county).

North Richmond would also support Richmond’s rent control program at $98 per unit. And there is also Richmond’s rental inspection fee that the county doesn’t require. Finally, there would be cost impacts for impact, building, development and traffic fees, which vary.

Community reaction

In public hearings about annexation, North Richmond residents have expressed concerns about the increased costs, including the impact on seniors and residents on fixed incomes, according to analysts. Others have expressed concern over the possibility for gentrification.

While some residents see patrols by the Richmond Police Department as beneficial, others said they were happy with the Contra Costa County Office of the Sheriff.

Some residents have also objected to Butt’s belief that North Richmond land could be used for cannabis grow operations.

“If this were purely a business decision….I think we would have to say no, it’s a bad deal,” Butt said, citing the costs. “It’s unclear that we can quantify any advantages to it.”

However, Butt says there is an intangible benefit in that annexation would correct an injustice against North Richmond residents years ago, when the city didn’t want the low-income area under its jurisdiction.

“Recognizing that isolating people in a small area because of their economic position and race is just not what we do in America,” the mayor said.

The process

If council ultimately decides to move forward with annexation, the process will be lengthy and difficult.

Richmond would submit an application to the Local Agency Formation Commission (Lafco), which would review the application and set a hearing.

Lafco has the ability to either approve the city’s application, modify it or deny it. If approved, possible objections by residents would lead to a protest hearing.

If less than 25-percent of registered voters or landowners disagree with annexation, Lafco would still confirm annexation. If between 25 percent and 50 percent of landowners or registered voters are opposed, then there will be an election. If over 50-percent of landowners and registered voters oppose, then annexation is terminated.