Opinion ID: 2495667
Heading Depth: 1
Heading Rank: 13

Heading: Present financial condition of the municipality

Text: ¶ 36. When considering the financial condition of Horn Lake, the chancellor found that: despite its ratings and fund balances, [Horn Lake] is experiencing economic problems. Memos from the Mayor of Horn Lake in July 2006, implemented both a hiring freeze as well as a freeze on all existing salaries. A position of patrolman for the municipality has remained vacant for over a year because qualified applicants could not be found. The Mayor likewise implemented an emergency expenditure policy wherein no one was to request expenditures that were not of an emergency condition except for those expenses for which the municipality may have already received outside funds to finance those expenditures. In December, 2006, the Mayor submitted a grant application with the following economic statement with respect to the municipality: Over the last years, our city has been struggling to continue to provide and meet daily demands. In fact, for the third time in recent months, our new mayor and board of aldermen have had to take out a loan to meet state requirements and to make payroll demands due to a development company defaulting on their taxes for the third year in a row. These taxes are over $600,000 and have put the city in a financial bind having to pay the bond from city funds which has depleted much of our city's necessary operational funding revenue. Perhaps most telling, the grant writer for the municipality submitted correspondence in December of 2007, some five months prior to the petition for annexation, stating as follows: The influx in growth due to the recent annexation ... has continued to strain our budget just keeping up with the daily requirements. The above referenced correspondence on behalf of the municipality is construed by this Court to be statements of economic need and indicators of economic stress. They do not reflect a city ready and able to take on over as much as nine square miles of new territory after having taken over eight square miles less than seven short years ago. Considering the evidence before the Court with respect to this indicia and being cognizant that the municipality has the burden of proving the reasonableness of this indicia, the Court cannot say under the totality of the circumstances that Horn Lake has met its burden. Accordingly, the Court finds this indicia weighs against annexation. (Emphasis in original.) ¶ 37. The trial court's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.