Where is the City Expanding?

The City is looking at possibly annexing areas stretching from Carousel Lane, north of Ukiah, all the way to Highway 253 to the south. Development in this area includes some commercial, industrial, and manufacturing uses (both existing and decommissioned), as well as areas containing vacant and agricultural lands.

Why does this matter?

Annexation matters because it directly changes who provides key services, how tax dollars are used, and how the community grows. Under the proposal, annexed areas would shift to city-managed services like police protection, street maintenance, and code enforcement, while continuing with existing water and sewer systems. Property tax would be redirected toward the City of Ukiah. The City also points to potential improvements in emergency preparedness, response, and recovery planning, along with taking over responsibility for roads and future infrastructure upgrades in annexed neighborhoods. Ultimately, this matters for all residents because the City is seeking to expand its boundaries in a way that would increase its tax base and revenue, shaping how resources are allocated and how the area develops moving forward.

Potential Impacts of the Proposed Ukiah Annexation

County Financial Impacts

County staff estimates the proposed annexation could redirect or reduce approximately $30.4 million in County revenue over time.

That includes:

• $27.3 million in reduced local sales tax revenue.

• $3.1 million in lost hotel (Transient Occupancy Tax) revenue.

• Additional reductions in future property tax growth.

Under the proposed Master Tax Sharing Agreement, the County's share of local sales tax generated in the annexed area would decrease by approximately 6.7% each year. After 15 years, the County would receive none of that local sales tax. The County would initially retain hotel tax revenue generated in the annexed area, but its share would decline each year until reaching 0% after five years.

Although revenue would decline, County staff concluded many major expenses would remain largely unchanged.

These include:

• Sheriff's Office operations

• County Jail

• Coroner services

• Health and Human Services

• Mutual aid responsibilities

• Countywide road maintenance

This means the County could lose revenue while continuing to provide many of the same services.

City Finances

According to the City's financial reports:

• The General Fund balance declined by approximately $572,000.

• Revenue growth has slowed due to weaker tax and intergovernmental revenues.

• The City's unrestricted net position has declined to approximately: -$40.6 million. This reflects significant long-term financial obligations that exceed unrestricted assets.

Current City funding measures are already under pressure. Expanding City boundaries could increase future service and infrastructure obligations.

• Measure P revenues struggling to keep pace with public safety costs.

• Measure Y operating with approximately a $2.25 million street maintenance deficit.

Fire Department

Before the Merger

• 3 fire engines

• 6 career firefighters

• 2 chiefs

• Approximately 50 volunteers

• Ambulance staffed by suppression-trained firefighters when available

Today

• 2 fire engines

• 4 career firefighters

• 1 chief

• Approximately 10 volunteers

• Ambulance staff are no longer required to be suppression-trained

Local officials have acknowledged that funding supporting the Ukiah Valley Fire Authority is scheduled to expire in 2030. Officials have stated that future tax measures may be necessary to maintain fire services. Residents could therefore face additional tax requests in the coming years.

Water Rate Increases

The Ukiah Valley Water Authority has approved substantial water rate increases through 2029. Millview, Willow, and Redwood Valley Water Districts all saw a 64%+ increase over 5 years, the City of Ukiah saw an 18% increase, and Calpella saw a 36%+ increase.