Opinion ID: 1727552
Heading Depth: 3
Heading Rank: 4

Heading: Batesville's Financial Ability to Make Improvements and Furnish Municipal Services

Text: ¶ 22. The Chancellor concluded, Based upon the testimony of the witnesses, and examination of the budgets and other financial data presented, there is little doubt that the municipality is financially able to make the improvements and furnish municipal services outlined in their plan for the proposed annexation area. ¶ 23. The COA contends that implementation of the sewer and water improvement plans would not provide all of the outlined services within a reasonable 5 year period. See City of Columbus, 644 So.2d at 1182; City of Jackson, 551 So.2d at 861. Instead, each of these proposals is divided into two phases, the second phase of which is contingent on those secondary services being necessary and economically feasible. Neither do the plans provide for any specific source of funding for the second phase. ¶ 24. The COA additionally alleges that Batesville did not provide accurate cost estimates to its accountant, and, as a result, he was unable to testify at trial about the financial feasibility of those phase two costs. Batesville's retained accountant, who testified about Batesville's ability to finance the expansion, was not adequately informed of the costs of the sewage system or the planned hospital commitments. Lastly, Batesville is not planning on purchasing any new equipment or providing any new personnel for its government, court, police department, or public health and sanitation department. Nor does it intend to make any street improvements, or build recreational facilities. In sum, the COA believes that Batesville is financially capable of supporting this annexation only because it will not be improving or extending its services. ¶ 25. Batesville replies that it has adequate bonding capacity and grants available that, along with tax collections and other revenues, make this annexation economically feasible. Batesville wishes to extend a full range of municipal services to the proposed annexation area, but makes reference in its brief to those services being provided where necessary and economically feasible. Batesville's financial advisor testified that Batesville had adequate bonding capacity to finance an expansion. Batesville also emphasizes that it has already incurred considerable expenses in providing services to the proposed annexation area, including a new sewer treatment facility and water, sewer, and natural gas services to the Sherwood Forest Subdivision (not included in the area in dispute on this appeal), and the purchase and improvement of the Humanity Water Association System, which does supply water to the residents of the disputed areas. The financial advisor further testified that Batesville had a good credit history and has always met its financial obligations. ¶ 26. After a reviewing the record in this case and briefs and hearing oral argument, we are left with real doubts that Batesville will extend all of its municipal services to the residents of the proposed annexation area within a reasonable time. As stated earlier, Batesville has shown that the residents of the proposed annexation area are primarily in need of an adequate central sewer system to eliminate any potential health hazard, yet Batesville has failed to commit to providing such a service within a reasonable time if it is not economically feasible. Given the expense that Batesville will incur in providing municipal services to the undisputed annexation area, and according to the proposed plans for implementation of a new sewer system, there is the distinct possibility that residents in the more remote areas will not receive such services within the first five years. While we find Batesville's desire to extend the full range of municipal services as outlined in the adopted ordinance laudable, we would afford more credibility to its promises if services are extended to the areas approved here for annexation. At this time, however, this Court cannot say with certainty that the residents of the proposed annexation area, especially those in the E½-Corridor 6 South Area, which is more remote from the current city systems, would, within a reasonable amount of time, see benefits from the payment of city taxes.