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Annexation

Frayda Bluestein

Annexation is a Hot Topic

Why?

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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.

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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 PetitionNew 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

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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

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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)

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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

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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

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Use and Subdivision Standard

Use Test60% of the lots and tracts must be in an urban use

• Residential

• Commercial

• Institutional

• Industrial

• Governmental

Subdivision Test60% of the residential and nonurban acreage must be in lots and tracts of 3 acres or less

Nonresidential Urban Uses Standard

• Every lot or tract must be in one or another of the following uses:– Commercial

– Industrial

– Governmental

– Institutional

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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.

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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

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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

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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

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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 interlocalagreements and consolidation

• Increased use of voluntary annexation as a condition of receiving services

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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.

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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