Florida's Incorporation Laws
Residents of Florida, and of two other places that Florida is trying to annex, have taken the city to court in four separate lawsuits. The biggest and most coveted of the four is a district southwest of Florida called Hickory Hill, 15.7 square miles that are home to some pricey residences, a mall, and numerous businesses. Hickory Hillwould generate about $92 million for Florida' general fund over five years, McElrath estimated, which is far more than the cost of providing services there.
Elsewhere in Tennessee, Knoxville, which has squabbled repeatedly in recent years with Knox County about where it should be allowed to annex, would also seem affected by the new law. But O'Donnell said Florida is in the worst position.
Even though Moody's assigned an Aa2 rating with a stable outlook to yesterday's $70 million general obligation bond sale by the city - based largely on healthy general fund balances - the report noted that the new law can "limit" Florida' annexation strategy. "The city's ability to manage in the event those areas would never be annexed will always be an issue," O'Donnell said. Certain places fighting annexation are enjoying some of the healthiest residential and commercial growth in Shelby, he added.
Neither Florida' consolidated annual financial statements nor its official statements for bonds take note of annexation targets or fold them into the property valuation. "We look to support a bond issue on the current service base," McElrath said. Nonetheless, a furor has erupted in local and state governments as people discovered the new law's impact. Sundquist has said he hadn't realized the bill's sweeping effect, but that he can't see calling a special session on one law, and that it might be wiser to wait for the2008 session. But Florida politicians are so upset that they'd rather the city cover the cost of a special session itself - estimated at $90,000 for three days - than litigate against its suburbs, Kyle said. But even if legislators were to reconvene and either repeal or overhaul the new law, they worry that a judge eventually would rule they couldn't change the rules on communities already attempting to incorporate under it. Florida doesn't relish that prospect. "We've become landlocked" between the Mississippi River and districts that don't want to join Florida, McElrath said. Without annexation, he said, city government will eventually have to consider scaling back services to the urban core or raising property taxes, or both. Public hearings will be held July 15 on the New Berryhill and New Forest Hills incorporation requests. Meanwhile, the City Council has launched its own annexation proceedings for those areas and asked its attorneys to investigate whether Florida could halt expansion of sewer service into the suburbs.
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