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• Whether the retaining the area within the city limits would result in an adverse impact to the city, including adverse fiscal impacts; • Whether disannexation would present an opportunity for incorporation of the area into a new municipality or for an existing municipality to annex the area; • Whether the area is populated with residential development; and • Whether the area is proposed for long-term development. See Exhibit B, pp. 15-16 for the full text of the policy.2 Each of these criteria also contains a requirement relating to the provision of city services. In this instance, the Council may consider the property for disannexation because (a) the area proposed to be disannexed comprises more that an individual parcel (although the fact that it is only four parcels makes this point arguable given the language of the policy); (2) the area is not populated with residential development (criteria #6); and (3) disannexation of the area will not create any keyholes or islands. Nexus does not argue that the city has failed to provide services to the area; rather it argues that by disannexing the area, the city will be absolved from providing services, and that will be a benefit to the city. In reality, the area will continue to receive both fire and EMS services under existing agreements between the city and Lamar County, and in any event, given the nature of solar farms, the Paris Fire Department would be dispatched to any fire calls at the Project because it is the regional provider of hazmat services in this part of the state. The primary issue with disannexation of the proposed area as far as the city is concerned is that of lost potential property tax revenue. Nexus has estimated taxes on the parcels for the next 30 years in an amount between $307,267.00 (using the 400 foot setback) and $768,167.00 (using the 50 foot setback) based on the 2023-2024 tax rate and taking into account depreciation of the assets. In discussions and meetings with staff, Nexus has proposed entering into an agreement3 with the City whereby the city would disannex the property, and Nexus would pay an agreed upon sum in three installments beginning 30 days after disannexation and ending 30 days after beginning of operations, anticipated to be in December of 2025. In addition to, or in lieu of a portion of the agreed upon taxes, Nexus is also open to developing the portion of the proposed extension of the Trail de Paris that runs through the property. Terms of any such agreement would be negotiable and determined and approved by Council after discussions in executive session. In any event, it must be remembered that regardless of any up front payment of "taxes," once disannexed, given current annexation law, it would be nearly impossible to reannex the property, and the city would be giving up all future property taxes forever. This is not insignificant given that Nexus has estimated the 2026 taxable value of the parcels (after installation of the Project) at $15,800,000.00 and depreciating to $3,713,000.00 by year ten. On the other hand, should Council decide against disannexation, staff can investigate the possibility of a waiver of the 400 foot setback requirement and/or other requirements of the solar 2 The policy for disannexation is simply the inverse of the policy for annexation. Other than the prohibitions against keyholes and islands, the policy on disannexation is sparse. Likewise, state law regarding disannexation is simply that the procedures used in disannexing property must not conflict with the procedures for annexing property. 3 The agreement could take the form of a development agreement, a disannexation agreement, or a Chapter 380 agreement. The type of agreement would be determined in the negotiation process.