Opinion ID: 1817476
Heading Depth: 1
Heading Rank: 13

Heading: Financial Ability to Make Improvements and Furnish Services

Text: ¶ 42. When analyzing a municipality's financial ability to make improvements and furnish services to a proposed annexation area, courts have considered several factors, including: (1) present financial condition of the municipality; (2) sales tax revenue history; (3) recent equipment purchases; (4) the financial plan and department reports proposed for implementing and fiscally carrying out the annexation; (5) fund balances; (6) the City's bonding capacity; and (7) expected amount of revenue to be received from taxes in the annexed area. City of Winona, 879 So.2d at 980-81 (citations omitted). ¶ 43. After evaluating Pearl's financial stability, the special chancellor determined: Pearl is in stable and excellent financial condition as reflected by the testimony of experts Ron Morgan, Demery Grubbs and Michael Slaughter. Moody's Investment Service (Exhibit P-18) reflects the same, and sales tax revenue is healthy (Exhibit P-79, Table 4). An extensive and detailed plan has been developed by Pearl to deal with the proposed annexation, which clearly shows Pearl's ability to financially handle the transaction. Pearl's fund balances continue to grow and increase, and its projections reflect the same (Exhibit P-79). Pearl's bonding capacity is strong, and the proposed annexation area would also produce revenue to Pearl. The evidence clearly indicates, speculation to the contrary, that Pearl has the financial ability to make the promised improvements and provide all services to the proposed annexation area. ¶ 44. The exhibits mentioned by the special chancellor clearly and concisely illustrate Pearl's financial stability. Pearl's fire chief, Lewis Waggoner, and its chief budget officer, Ronnie Morgan, testified to the continual upgrades in equipment for the fire department. Further, at the time of trial, Pearl was at 52% general operating bonded indebtedness. Specifically addressing Pearl's financial stability, Demery Grubbs, an expert in the field of municipal finance, testified that The services identified and the facilities identified in [Pearl's Services and Facilities Plan] and the revenue that have been projected within this plan to pay for those services and facilities are well within the means and the financial ability of Pearl to provide those services, while Mike Slaughter, an expert in the field of urban and regional planning and the associated field of civil engineering, testified that, contrary to the objectors' assertions, this annexation is not a tax-grab to try to shore up any deficiencies in the City of Pearl because the City of Pearl can continue to provide the services to its current businesses and residents without this annexation. The testimony and exhibits provide evidentiary support for the special chancellor's finding that Pearl has the financial ability to make improvements and furnish services to the PAA as promised.