Annexation Could Unlock Millions: City Mulls Expanding Borders

NORTHERN CALIFORNIA, CA — The most commonly and passionately asked question that Ukiah Valley residents had for officials with the city of Ukiah at Thursday night's annexation information workshop was, "Why annexation?"

City officials said at the meeting that the move would help Ukiah tap into a major source of state funding for water infrastructure improvements in the greater Ukiah area. Annexation would also shift some tax revenue from the county to the city, which would help pay for municipal services.

The proposed Ukiah annexation was first presented by city staff last year. If ultimately approved by the Local Agency Formation Commission, which oversees boundaries in the county, the proposal would pull areas north and south of Ukiah into the city limits.

Shannon Riley, deputy city manager, explained that another purpose of proposing annexation is planning ahead to help ensure the maintenance and improvement of infrastructure and services, including police service and water and road infrastructure.

"Annexation is not being proposed because we're in some kind of crisis today," Riley said at the meeting. "It's being proposed because good government plans ahead, it aligns responsibility and representation and services before problems arise rather than after. The city of Ukiah has always taken a proactive approach to recognizing issues and potential issues, not just in Ukiah, but in our entire valley."

Riley explained in an interview with The Mendocino Voice that, besides the eventual shift of some revenue of sales and property taxes from the county to the city in the areas that could be annexed, which would help pay for services, annexation is also meant to help secure substantial water infrastructure funding from the state.

Echoing what Ukiah City Councilmember Doug Crane explained at the meeting, Riley said later that the state has funding incentives for water districts that consolidate. The Safe and Affordable Drinking Water Fund was established by SB 200 in 2019 to help water systems provide an adequate and affordable supply of safe drinking water in both the near and long term. The fund's expenditure plan prioritizes funding for districts collaborating to share infrastructure and resources.

Creating a more sustainable unified infrastructure system for the entire Ukiah Valley Water Authority is a goal behind Ukiah's annexation proposal, according to Riley.

The Ukiah Valley Water Authority, a newly consolidated water management organization, was formed in 2024 partly for the purpose of securing similar state funding. It unifies the formerly independent water agencies of the city of Ukiah and Millview, Redwood Valley, Calpella and Willow to "improve the coordination of water resources, reduce costs through shared infrastructure and maintain local control over water services in our region," according to city documents.

One of the public questions at the meeting was whether water rates would go up with annexation. Riley said that water rates and annexation are "basically unrelated." She also said that rates are based on each district's unique conditions including infrastructure and debt.

Phil Williams, special counsel to the city of Ukiah for water matters, said at the meeting that water rates for the districts are approved by individual district boards based on comprehensive rate assessments for each district and their unique conditions and needs. The rate assessments happen every three to five years and map out scheduled annual rate adjustments.

Riley said the state funds, if received, would pay for infrastructure upgrades that would help increase water availability for the entire valley, the cost of which she said might otherwise be payed for by rate increases. That means the funding could help stabilize water rates throughout the valley.

Grants for water infrastructure come along regularly, but not for dollar amounts close to the nearly $100 million the water authority could get from the regional coordination facilitated by annexation, according to Riley.

She also said the grant money won't be available forever. Right now, the water authority is potentially eligible for about $16 million in planning grants and $75 million for improvements to be implemented.

"That's money that doesn't have to be charged to the ratepayers," Riley said. "If we don't get that money, eventually those repairs are going to need to be made and will have to be paid by the ratepayers, so that could lead to really significant rate increases."

By Savana Robinson, Bay City News
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