Annexation Frayda Bluestein Annexation is a Hot Topic Why? 1 - PDF document

5/3/2016 Annexation Frayda Bluestein Annexation is a Hot Topic Why? 1

5/3/2016 Annexation Process Before 2011 • Four statutory methods: – Voluntary contiguous (100% petition required) – Voluntary satellite (100% petition required) – Involuntary by cities under 5,000 (urbanization standards/service requirements) – Involuntary by cities 5,000 or more (urbanization standards/service requirements) • Legislative annexation/deannexation by local act (no standards or requirements apply) Voluntary Annexation (by Petition) • Contiguous: Petition signed by 100% of property owners. • Board has discretion to approve or deny. • No standards for character of the property other than contiguity. • Services must be provided to the same extent and under same policies as in the existing corporate limits. 2

5/3/2016 Satellite Annexation (by Petition) • Satellite: Petition signed by 100% of property owners. • Board has discretion to approve or deny. • Limits on size and distance from annexing city and another city. • Can’t annex part of a subdivision. • Services must be provided to the same extent and under same policies as in the existing corporate limits. Annexation by Petition New Provisions • City must annex if petition from owners of 75% of property in high poverty area – High poverty: 51% of households have incomes 200% or less than the current federal poverty threshold – Area must have 1/8 contiguity; may not exceed 10% of existing population – Must provide water and sewer to annexed area – Obligation may be relieved if cost of providing services exceeds capacity as defined in the statute • City may annex upon petition of 2/3 of residents in high poverty (“distressed”) area 3

5/3/2016 Challenging Voluntary Annexations • The courts have allowed challenges only by persons owning land in the annexation area or cities attempting to annex some or all of the same territory. • They have denied standing to city residents, neighbors of the annexation area, or cities not attempting to annex the same territory. Clerk’s Role in Annexation • Verify sufficiency of petition; property description; signatures • Schedule public hearing • League of Municipalities Resource: Mechanics of Annexation 4

5/3/2016 Involuntary Annexation (City Initiated) • Contiguous; 1/8 requirement • Not in another city • Meets urbanization standards or is a donut hole • Must extend water and sewer (if water and sewer is provided in the city) • Approved by voters in the area to be annexed Current Law: Requires Voter Approval • Annexation does not become effective unless approved by a majority of voters in the area to be annexed. • Referendum must occur at a general municipal election (odd-numbered years) • Municipality bears cost of election • If rejected, no annexation for for 3 years S.L. 2012-11 (HB 925) 5

5/3/2016 Water and Sewer • If the city provides or contracts to provide services, must allow property owners to request service to their property • Must provide notice of right to request service • Must extend to all properties who request it at no cost other than user fee • Must complete construction within 3.5 years of annexation effective date • Property owners who choose to receive services later may be charged based on graduated schedule set out in statute Urbanization Standards • Population density • Density and Subdivision • Use and Subdivision Test • Nonresidential Urban Uses • Necessary Land Connections (formerly “subdivision (d)” areas) • Donut holes 6

5/3/2016 Population Density Standard There must be a resident population of at least 2.3 people per acre Density and Subdivision Standard • Density Test – A resident population of at least 1 person per acre • Subdivision Test – 60% of total acreage in lots or tracts of 3 acres or less; and – 65% of lots and tracts are 1 acre or less in size 7

5/3/2016 Use and Subdivision Standard Use Test Subdivision Test 60% of the lots and tracts 60% of the must be in an urban use residential and • Residential nonurban • Commercial acreage must be • Institutional in lots and tracts of 3 acres or less • Industrial • Governmental Nonresidential Urban Uses Standard • Every lot or tract must be in one or another of the following uses: – Commercial – Industrial – Governmental – Institutional 8

5/3/2016 Subsection (d) Areas • Cities can include nonurban subareas if they qualify under G.S. 160A-48(d). • At least 60% of the external boundary of the subarea is coincident with a combination of city boundary and boundary of the remaining annexation area. • These areas cannot exceed 25 percent of the total annexation area. Exemption for Farms • Land used for farm purposes (broadly defined) may not be annexed without the owner’s written consent – S.L. 2011-363 (HB 168) – Eliminates prior provisions regarding annexation of present use value property. – If consent is obtained, property is considered to be in the city for all purposes. 9

5/3/2016 Plans for Provision of “Major” Municipal Services • Police • Fire • Solid waste collection • Street maintenance • Water • Sewer Exceptions to Service Requirements • If a city is not providing a service, it need not provide it to the annexation area • If there is an existing, comparable service provider in the area, the city need not duplicate that service • If topography makes sewers very expensive, the city may maintain septic tanks instead 10

5/3/2016 Existing Fire Service • The city must attempt to contract with a rural fire department for five years. The rural department’s service satisfies the city’s service requirement. • The city must pay a proportionate share of the fire department’s debt. Solid Waste Collectors • The city is required to protect existing private solid waste collectors by either: • Contracting with the collector for two years, or • Paying the collector 15 months worth of revenues 11

5/3/2016 Fighting for Priority • Priority goes to the unit that starts first: Voluntary: Valid petition Involuntary: Adoption of valid resolution of intent Annexation Agreements Cities may agree to establish “spheres of influence” in which each city may annex 12

5/3/2016 Possible Effects on Recent Changes • Fewer involuntary annexations • Higher rates and increased fees for nonresident customers • Change in approach to ETJ • Splintered service delivery in unincorporated areas • Decrease in tax revenue to maintain city services used by city and county residents Possible opportunities • Increased cooperation through interlocal agreements and consolidation • Increased use of voluntary annexation as a condition of receiving services 13

5/3/2016 Legislative Annexation/Deannexation • Legislature always has authority to modify city and county boundaries. • Statutory requirements do not apply to legislative actions. • Cities have no authority to deannex. This can only be done by the legislature. Resources on Annexation • Annexation Law in North Carolina; David M. Lawrence – NOTE: This publication predates the changes in the involuntary annexation procedures but is still current for most aspects of the annexation process. 14

5/3/2016 Coates’ Canons Local Government Law Blog – Annexation Posts • Annexation Reform: Referendum Replaces Petition to Deny • Annexation Reform (Summary of 2011 Changes) • Water and Sewer Connections “At No Cost” • Deannexation • Special Status of Bona Fide Farms 15