Proposed Ukiah Annexation Could Cost Mendocino County as Much as $27 Million Over 16 Years
Estimated cost excludes impact of reallocated property taxes
Mendocino County officials say a proposed annexation of county land and businesses into the city of Ukiah could reduce county revenue by as much as $27 million over time, though the estimate is preliminary and does not yet include the impact of the shift in property taxes.
Chief Executive Officer Darcy Antle told the Board of Supervisors this week that the county’s analysis is still in early stages, as officials have not received parcel-level data needed to evaluate changes to property tax revenue.
“We need a clear map or APNs before we can really understand the property tax impact,” Antle said.
Early estimates instead focus on sales tax losses. Antle said 15 of the county’s top 25 sales tax generators are located within the proposed annexation area, representing about $3 million in annual revenue that would gradually shift to the city over a 15-year period under an existing tax-sharing agreement.
At current inflation rates, that could total roughly $27 million over 16 years, she said, though the losses would phase in gradually, beginning with smaller reductions in the early years.
Assistant CEO Sarah Pierce said the county is also evaluating other fiscal effects, including changes to road maintenance responsibilities, public safety service demands and permitting activity.
She noted that while annexation could reduce the county’s obligation to maintain certain roads, it may also lower state gas tax allocations tied to road mileage under Senate Bill 1, offsetting some of those savings.
Staff is also reviewing potential impacts on business licensing revenue, which Pierce said are expected to be minimal.
Supervisor Mo Mulheren, who represents the city of Ukiah on the board, emphasized that the estimates remain subject to change and should be considered alongside potential cost reductions.
Antle said the county is taking the proposal seriously but will need more detailed information before completing a full fiscal analysis, particularly regarding property taxes.