Farmington's Community Development Department will conduct a cost-benefit analysis study of the land from Farmington's western border to McGee Park at County Road 5500, said Mary Holton, department director. The land is currently unincorporated San Juan County.
Many businesses in the area enjoy city services, Holton said.
The annexation study along Highway 64 will be the first of three phases looking at land to the east of Farmington, said City Manager Rob Mayes.
Other areas of interest include land along New Mexico State Road 516 and the Crouch Mesa area, he said.
Councilman Jason Sandel said that there is some public interest in annexation in areas adjacent to Farmington, such as Flora Vista. Sandel also said that the primary development company in Crouch Mesa has said it has "big plans for a large development if (the city) can extent infrastructure."
"There is significant opportunity if we attack this from an economic development and a development standpoint," Sandel said.
The biggest challenge in annexing the area is maintenance of water quality standards, Mayes said.
"(Land along the Highway 64 corridor) looked like the area of most benefit," he said. "That's why council was interested in a phased analysis. We've hit a plateau in our ability to do a due diligence study behind the scenes."
City Council voted unanimously to approve the study. Councilman Dan Darnell, who was absent from Tuesday's work session, did not vote.
Funding for the study is within the Community Development Department's budget, Holton said.
But one city councilwoman doesn't think annexation is such a good idea.
"I see this as an area that has more liability," said Councilwoman Mary Fischer. "I was involved in one previous annexation, and I wish we had never done that one because of the liability. My interest in (this one) is lukewarm at best. I don't particularly like the idea of annexation, but I won't oppose the study of it."
Although city council, with the exception of Fischer, seemed to take an enthusiastic approach to the annexation study, San Juan County CEO Kim Carpenter is viewing the situation with some skepticism.
"We're going to have to take a look and see what the improvements are," he said in a Tuesday phone interview. "Will it be another strip annexation, or an annexation that will benefit residents? What services can the county reduce? Are they going to add water? What about the businesses? Sales taxes will increase. There's just a lot of questions."
Although some businesses along the Highway 64 corridor use Farmington services, San Juan County paid for half of the sewer infrastructure out to McGee Park, according to information provided by Carpenter.
The best case scenario will be if the city of Farmington looks at the annexation study from a comprehensive standpoint, Carpenter said.
"We know that our environmental (gross receipts tax) will be affected, and our fire excise tax," he said.
For Fischer, annexation during the recession is simply a bad idea.
"It almost looks to me like we're cherry-picking," she said in a phone interview after Tuesday's work session. "I believe that the people are served by county services. Generally, I'll support annexation if the businesses, residents and county come forward and ask for it. I really question (the city's) motivation."
Although annexation would provide the city with a larger tax base, the expenses associated in bringing water, sewer, fire, police and other services into the new area could be offset those benefits, she said.
The city already suffers from an understaffed police department, and the annexation will put additional strain on the fire department and code compliance division, Fischer said.
"(Annexation) is another one of these tools in our toolbox, but it doesn't address the basic problem of spending," she said.
A better solution to the city's budget woes would be to cut raises to upper management and look at staffing redundancies, Fischer said.
"Our first obligation is to our citizens," she said. "This money doesn't belong to us. It belongs to the public."