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Economic study shows annexing Avimor will saddle City of Eagle with a deficit. Developer says differently.

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Eagle City Council now has one more piece of the puzzle it needs before it will consider annexing a planned community in the foothills into city limits.

Avimor, a planned community rising in the foothills along Highway 55, is envisioned to have up to 10,000 homes at full-build out in the coming decades. For now, it sits at the intersection of unincorporated Ada, Boise and Gem counties, but developers have been discussing annexing the entire project into Eagle city limits since 2019.

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Critics say annexing Avimor would add thousands of new residents requiring parks, library services and police patrols to the city’s plate, potentially straining the small city’s resources. But, proponents argue it would allow the city to collect taxes from growth that is set to occur anyway and have some measure of control over development occurring on the fringes of city limits that will impact Eagle regardless.

Short term gains with long term costs

Last year, Eagle commissioned a fiscal impact analysis to find out the cost of annexing the development into the city over thirty years. The report, completed by firm TischlerBise, forecasted that annexing Avimor would be a boon to the city in the short term, but leave a deficit in the outer years as the development builds out. 

Colin McAweeney, a fiscal analyst with the firm, said the study looked at two different scenarios for the next 30 years of development. The first scenario included Eagle annexing phases 4-12 of Avimor, which haven’t been constructed yet, and the second scenario studied the impact of annexing the entire community. The study found if the city took either path it would result in 20,000 new residents in 30 years, a 20% increase in jobs and either a $9 million or $13 million budget deficit.

The reason for this is because a large percentage of the city of Eagle’s budget relies on one-time fees to pay for operating costs, instead of property taxes. This means the city would get an influx of cash as homes are built and the developer pays impact fees and other costs, but the overall property tax revenue from the properties is not high enough to maintain the services required for these homes on its own.

Photo: Margaret Carmel/BoiseDev

“If the property tax was higher then we’d be able to capture more of that tax base to offset ongoing cost, but with this restriction of the budget structure you’re seeing high revenues when growth starts but you’re not getting the cumulative impact of growth in the outer years,” McAweeney told Eagle City Council. 

After 30 years, the TischlerBise analysis estimated each year the city would see a deficit of $1.8 million for operating costs. The annexation would require between 28 and 30 more city employees, the majority of which would have to be Sheriff’s deputies to keep up with current response times and patrol frequency. This analysis also estimated a need for nearly $40 million in capital projects, 70% in the Parks and Recreation Department. 

His calculation was based on an analysis of the city’s current levels of services in various departments, their costs and what it would take to maintain the same level of services to a city with the thousands of additional residents Avimor would bring. After a question from City Council President Charlie Baun, McAweeney said it did not take into account that Avimor’s HOA fees cover maintenance and other upkeep on the property, meaning the city wouldn’t need to pay for these costs. 

Not so fast, says Avimor’s economist

Avimor hired its own expert to give a different take. 

After McAweeney addressed City Council, consulting economist and former Boise City Council Member David Eberle said after he crunched the numbers on the TischlerBise study and came to a far rosier conclusion for annexation. He said the report generally came to the right general conclusion but miscalculated the amount of the deficit the city would face if it annexed the development.

[Avimor is growing, far from other SW Idaho cities. Who pays for emergency services – and how will it change?]

Instead of a multi-million dollar deficit, Eberle said his calculations showed that the city would come out largely revenue neutral at the end of the project build-out. He said the city had enough resources to adequately cover the extra police officers and other city services, but the biggest hit would be the capital projects required to build out the park space necessary for all of the additional residents. 

Avimor Idaho
A row of homes overlooking a pond in Avimor. Margaret Carmel/BoiseDev

Eberle said this isn’t an Avimor specific problem, but it’s baked into the city’s financial model because the park impact fees it charges aren’t high enough to cover the cost of building new facilities. 

“You can align the capital impact fee with your costs, or in the next step of this process work with the developer to correct this deficiency with some of the developer amenities that we’re willing to provide,” Eberle said. “You can correct this problem and you can correct this problem well before 28 years and you will never see (the deficit TischlerBise identified.) You have several years to correct this properly and be 100% made whole in your parks (capital improvement program) before the first houses come online.”

Annexation = Avimor stays open for public use

The other argument from the developer is the open space built into Avimor’s project.

Part of Avimor’s proposal includes a vast network of trails for pedestrians and equestrians, paved walking paths and acres of natural open space throughout the 23,000 acres of the development. The project also includes traditional park amenities, like swimming pools, tennis courts and playgrounds. 

Dan Richter, developer of Avimor, said if Eagle annexes Avimor the community will remain open for anyone in Eagle to use the facilities. But if it’s not annexed, the gates will close.

“We’ve been inclusive up to this point and invite everyone to come up and use most of our facilities,” he told council. “We’d like to continue that, and that’s why we’re here before you.”

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Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at margaret@boisedev.com or by phone at (757)705-8066.

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