Annexation Policy

In October 2002, the City Commission adopted an annexation incentive policy, which instructed staff to focus on more aggressive and creative annexation and economic development strategies.  The City recognized that its economic well-being is related to and in many respects dependent upon, sustained growth of its population and tax revenue base through annexation of contiguous territories.

The annexation agreement allows the City to reimburse the developer for the actual costs incurred in connection with the construction of qualified “municipal facilities” (streets, gutters, and other public infrastructure) within the property annexed, in an amount not to exceed the total cost of facilities or the total sum of all ad valorem real property taxes collected by the City from the annexed property, whichever is less, over a six year period.

The incentive agreement requires the Director of Finance to collect and deposit all tax revenues in a separate dedicated account from which the developer will be reimbursed for the cost of the public facilities to be assumed and maintained by the City upon completion of the development. In essence, the tax revenues generated by the annexation of property are utilized to offset the cost of the public facilities that the City itself could otherwise invest in and construct. Reimbursements to the developer cease at the conclusion of the six-year period and thereafter, the City receives all tax revenues from the annexed property. Persons interested in annexation into the City of Paducah should contact the Department of Planning at 270-444-8690 or by .