annexation in home-rule cities: step-by-step...overview of topics • if you see a code reference in...

ANNEXATION IN HOME-RULE CITIES:STEP-BY-STEP

Texas Municipal League

Municipal Annexation Conference

May 13, 2016

YOUR NAVIGATORS FOR TODAY:

• Chance Sparks, AICP, CNU-A

• Director of Planning, City of Buda

• Texas Chapter of American Planning Association TML

Affiliate & Legislative Liaison

• George Hyde

• Partner, Denton Navarro Rocha Bernal Hyde & Zech

• City Attorney for several Texas cities

• Kim Mickelson, AICP

• Of Counsel, Olson & Olson

• City Attorney for several Texas cities

• Texas Chapter of American Planning Association

Director

“Without exception, affected property owners who spoke at the hearings expressed their hatred of annexation’s effects. They especially hate paying city taxes and permit fees, complying with city codes and ordinances, and being denied elements of a lifestyle that attracted them to their properties in the first place. Burning brush and shooting varmints seem to be paramount among the latter.

--Weatherford Star-Telegram, June 19, 2007

OVERVIEW OF TOPICS

• If you see a code reference in this presentation (§43.052(c)), it is

Local Government Code unless otherwise stated

• Before You Contemplate an Annexation – things you need to take

care of

• Due Process – why procedural accuracy matters

• Involuntary Annexation

• The Annexation Plan – Three Years of Precision Marching!

• Annexations Exempt – Dodging Bullets, but Mind Your P’s & Q’s

• Voluntary Annexation

• Disannexation

• Consideration of other city policies to make your life easier

• Utility extension policies

YEARS OF PRECISION MARCHING!

• It might look impossible, but it’s

not!

• Annexations inconsistent with

procedures are voidable!

• Disclaimer: Our advice is only

as good as what YOUR city

attorney will defend!

PLAN AHEAD – BEFORE YOU CONTEMPLATE AN ANNEXATION

CONSIDER A POLICY

• Why are you annexing? Legally it doesn’t matter, but from a policy perspective you need to have a clear

purpose/reason… ANALYZE! Consider adoption of an annexation policy.

• Tell the story of why you annex, what you consider/evaluate

• Not a legal requirement, but a really good idea

• Creates institutional knowledge that carries across administrations

• Sets the stage for analysis that helps to determine if annexation is

the right choice for the City in addition to the affected

property owners

• Gives elected officials something to lean back on

• Remember: You can have substantial changes in elected bodies in

the three years

• Best Example: City of San Antonio

WHAT TO CONSIDER IN YOUR ANNEXATION POLICY

• Overview

• Purpose & Intent

• Background, Histories & Strategies

• Policy Introduction

• Policy Statements

• Evaluation of Areas Based on Existing or Planned

Level of Development

• Evaluation of Areas Based on Service Delivery

Needs

• Evaluation of Areas Based on Need to Protect

Public Health, Safety, and Welfare

• Evaluation of Areas Based on Intergovernmental

Relations

• Evaluation of Areas Based on Fiscal

Considerations

• Considerations for the Issuance of Non‐Annexation

Agreements

• Annexation Program

• Preparation

• Location Selection Criteria

• Municipal Services to be Provided

• Fiscal Impact Analysis

• External Communication

• Annexation Plan (structure as addendum)

• General Provisions

• Full Purpose Annexation

• Exemptions from Annexation Plan

• Limited Purpose Annexation

BOUNDARY AGREEMENTS

• One of your goals in annexation should be

“rational administrative boundaries”

• Using Interlocal Agreements to establish

future boundaries (city limits and/or ETJ)

between cities Considerations when

creating:

• Property lines

• Watershed boundaries

• Water & sewer infrastructure planning

• Census boundaries

• School districts

• Roadways not always best – can lead to

issues with driveway permits, police

jurisdiction, development exactions, etc.

NON-ANNEXATION DEVELOPMENT AGREEMENTS

• §43.035 requires offering of a non-annexation development agreement for

agricultural/timber tax exempt properties

• Appraisal District coordination

• Suggest doing them independently of an active annexation process

• Allows you to make argument that you are trying to protect them

• Removes the pressure of the annexation timeline

• Manage staff resources

• Helps you with contiguity requirements; Can help with dimensional requirements since

treated as contiguous

• Document offers, property owners declining, property owners not responding

NON-ANNEXATION DEVELOPMENT AGREEMENTS – COMMON COMPONENTS

• Remember Legislative Intent… and the State you

are in… be reasonable

• Guarantee to continue as ETJ as long as terms of

agreement are met, up to 45 years

• Owner promises to stick with agriculture, wildlife,

timber & related incidentals

• Owner promises not to file a development document

• Violation automatically triggers a petition for

voluntary annexation; no vesting

• City can enforce all city regulations & planning

authority that don’t interfere (suggest cross-

referencing your agricultural zoning if you have it)

• Record in county records to run with land

LEGAL DESCRIPTIONS & LOCATION QUALIFICATION

• Importance of an accurate legal description

• Is it in your ETJ?

• Is it in a neighboring city’s ETJ? Is it a petition, or is it involuntary?

• ETJ verification or property ownership §43.051

• Play nice with neighbors if it is in another city’s ETJ §42.022(c) & §42.023

DONUTS & CHICKEN STRIPS

• 1,000 foot dimension standard

• Exemptions under 43.054(b)

• Strip annexations §43.0545

• Dangers of donut creation §43.057

• Is it in the public interest?

STRIP EXAMPLE

• < 1,000’ wide

• Touches on 2 sides

• Or touches another

jurisdiction

• < 1,000’ wide

• Touches on 1 side

• > 1,000’ wide

• Touches on 1 side

DONUT EXAMPLE

PLAYING WELL WITH OTHERS

• Water/sewer districts… beware of

financial penalties §43.071 and §43.072

• ESDs… §775.022 (health safety code)

• If you have these in your ETJ, consider

negotiating strategic partnership

agreements now.

• Can arrange for limited purpose

annexation to collect sales tax (address

free-rider)

• Can negotiate any number of factors…

application of building codes/permitting,

etc.

CONSIDER LEGAL IMPLICATIONS EARLY

• Voting rights act… preclearance not necessarily required, but VRA compliance still

is. §43.906(b)

• Donuts are particularly dangerous

• Take service plans seriously (see other session)

• Not just a bureaucratic exercise

• Do you REALLY have capacity?

• Do you REALLY have the ability to provide good

services?

• If your plans are all 100% identical, tread with

caution

KNOW YOUR LIMITS

• Just because you can, doesn’t make

it a good idea

• Can annex 10% of your land area

each year

• Can carry over to following years,

but can’t exceed 30% of your land

area in any given year

• §43.055

TRANSPARENCY REQUIREMENTS

• Posting on website – content, format, etc.

• Publishing in newspaper – content, format, etc.

• Letters to Service Providers, school district,

etc. – content, format, etc.

• To certify or not to certify

• Letters to property owners

• Public Hearings

• Things that aren’t required, but are a really,

really good idea:

• FAQs in plain English

WEBSITE

• Make all aspects easy to find

• Annexation Policy if you have

one

• Annexation Plan posting

• Posting of Hearing Notices

• Posting of Service Inventories &

Draft Service Plans

• FAQs

NEWSPAPER NOTICE

• Adequate description that average Joe can understand

• Addresses if possible

• Solid boundary description in plain English

• Best: publish a map! ($$$)

• Date/Time/Location of hearings

• Directions for how to make comments

• Contact information

• Website link for more info

LETTER TO PROPERTY OWNER

• Owner contact based on appraisal district information


• Addresses


• Best: provide a map!





• Include FAQs if you can

FREQUENTLY ASKED QUESTIONS

• How will police offer more services & safety when we already get Sheriff ’s patrols?

• Station proximity; personnel per city population compared to county; special/unique

programs

• How will implementing zoning allow City to protect & defend property values?

• Can protect against undesirable uses coming in and reducing property values

• Why would the city want to annex property that will provide such little value?

• Growth management and importance of projects being built to city standards

• If I already pay for & receive city services, what benefit is there to me?

• Rate differentials, auto/home insurance differences, land use protection


• Is the city annexing for the purpose of charging property taxes to landowners?

• Don’t say yes… you don’t see a bit of tax money until the year following the year you

annexed… if you annexed February 28, 2016, you won’t see any tax until the property tax

bill due in January 2018.

• I have horses and other livestock… Can we keep our animals?

• Nonconforming uses & Ag-Exempt Non-Annexation Agreements

• I have a well & septic system… do I have to switch?

• No. Only required for new projects or when existing has failed and is within ___ feet of a

line


• Are Landowner comments being ignored?

• Opportunity to explain how public hearings work – one-way communication

• Is the city planning to expand or widen roads in this area?

• Will the city allow landowner participation in future development plans?

• Comprehensive plans, zoning case processes, ability to serve on boards/commissions

• How will the City pay for infrastructure?

• Public infrastructure usually drive by private investment (developer pays)

LETTER TO SERVICE PROVIDERS & ENTITIES

• You should have good contacts for all of your service providers & other entities


• Addresses


• Best: provide a map!





• Special content & timing requirements (especially school district fiscal; railroad must be certified)

PUBLIC HEARINGS

• State laws don’t specify who should hold the hearings, but

should be someone that is part of decision process

• Just a hearing before the City Manager might technically

comply, but is not intent

• Use of a Commission or City Council committee might be okay

if they are part of the process (recommending body?)

• Hearing before City Council is the best

• Think about your agenda posting: do you want discussion,

or just one-way receipt of comments?

• Give lots of directions in your notice so people know what to

expect – this is likely their first interaction with a

governmental board or elected body

• Affect of Protest

PUBLIC HEARING 2-STEP DANCE

• Two public hearings that take place 20-40 days prior to 1st

reading of the ordinance

• You can do more

• Don’t forget your website!

• Notice in newspaper 10-20 days prior to each hearing

• Just publish notice of all hearings for multiple weeks to comply

• Property owner & service provider notice

• 30+ days prior to public hearings

• Include all planned public hearings in notice

• Special content for school district, with special timing

THE ANNEXATION PLAN

ANNEXATION PLAN

• Your City is REQUIRED to have an Annexation Plan, even if you only plan to annex

properties that are exempt from the 3-Year Plan-Based Annexation Process

§43.052(c)

• Municipality shall prepare an annexation plan that specifically identifies

annexations that may occur beginning on the 3rd anniversary of the date the

annexation plan is adopted §43.052(c)

• Can be amended, but 3 year rule applies to each property – advice is to maintain each

date series as a separate document for ease of use/reference

• Be smart & consistent with dates – make it easy on yourself

• Mindful of special districts (see other session)

• Have a conversation with your county early

ANNEXATION PLAN

• Be careful removing from plan. If the plan is amended

to remove an area during the first 18 months after an

area is included in a 3-year annexation plan, then the

municipality may not amend the plan to again include

the area for 1 year after the date of the amendment.

But if the amendment to remove the area occurs

during or after the 18 months following the month an

area is included in the 3-year annexation plan, then

the municipality must wait 2 years before again

amending the plan to include the area §43.052(e)

• Don’t blow it at the end… if you make it all the way

through and then don’t annex, you can’t annex it for 5

years!

ANNEXATION PLAN WALK-THROUGH

• Content

• Relationship to an Annexation Policy

• Best practices

• Ease of document use

• Clarity of process

• Checklists for each area

• Your Plan should help tell the story of the

annexation

• Why

• Address likely concerns up-front

NO THANKS… NOT INTERESTED IN AN ANNEXATION PLAN

• The City of ___________________ has no

plan to annex any lands within the next

three years unless such is exempted

from LGC § 43.052(h)

• If you are going to annex an area under

your annexation plan that DOES NOT

meet an exemption or IS NOT

voluntary, be mindful of staff capacity

ANNEXATION THROUGH ANNEXATION PLAN

• The importance of additions & deletions… especially deletions.

• Don’t bother until you’ve checked on 43.035 Non-Annexation Development Agreement requirements

• Day 1: Area placed in annexation plan

• Day 90: Notice provided to landowners; request of inventory from service providers §43.052(f) §43.053(c)

• Day 180: Last day for provider to furnish inventory unless extension agreed to §43.053(c)

• Day 240: City must compile & publish inventory of services; begin preparing service plan §43.053(g)

§43.056(j)

• Day 330: Give notice & conduct two public hearings by this day (no more than 90 days after inventory

published) §43.0561 §43.905

• Publication/notice requirements

• Timing requirements

INVENTORY

• §43.053

• Type of service, method of delivery, other specifics

• For utilities, roads & drainage:

• Engineer’s report on physical condition

• Summary of capital, operational & maintenance

expenditures for that infrastructure

• For police, fire, EMS:

• Average dispatch & delivery time

• Equipment schedule, including vehicles

• Staffing schedule, including certification & training

levels

• Summary of operating & capital expenditures

ANNEXATION THROUGH ANNEXATION PLAN

• Day 360: Hold negotiations with property owners and special districts for provision of

services after or in lieu of annexation §43.0562

• County coordination! Do you get along?

• Day 540ish (depends on month): Before 1st day of 10th month after the month in which

the inventory was prepared, final service plan should be prepared & published

§43.056(a)

• Day 1095: 3rd anniversary of the date the area was placed in plan. Cannot annex before

this date. Post notices for ordinance §43.052(c)

• Day 1125: Annexation bust be completed before the 31st day after the 3rd anniversary of

the date the area was included in the annexation plan §43.052(g)

• If the annexation is not completed within that time, the municipality may not annex the

area before the 5th anniversary of the last day for completing an annexation. §43.052(g).

NEGOTIATIONS

• Commissioners Court (yes, you read

that right) selects five people in

annexation area to negotiate with city

for provision of services after

annexation

• Can create a binding agreement in

lieu of annexation

• Land use?

• Application of certain ordinances?

• Arbitration

SERVICE PLAN

• Required for annexations under a plan,

exempt annexations, EVERYTHING

• Must provide for “full municipal

services” to the annexed areas

• Means all services provided within its

full-purpose boundaries, unless land

topography, land use or population

different

• Must be available to the public before

the public hearings

• Recommendation: have it developed &

posted to your website before you send

notifications

SERVICE PLAN

• Immediate:

• Police, Fire, EMS

• Solid waste, water, wastewater

• Roads, parks, other existing facilities

• Capital Improvements for full services must be completed within 2.5 years

• Can get extension to 4.5 years if city can demonstrate it is unreasonable to provide in

that time frame

DODGED BULLETS: EXEMPTIONS TO THE ANNEXATION PLAN REQUIREMENT

• LGC § 43.052(h)

• 100 Tracts Exemption

• Any number of tracts, so long as no more than

99 contain residential dwellings

• Annexation with 50% of Owner Approval

• Petition by 50%

• 50% vote

• Special Districts

• Several other odd/rare exemptions

• Don’t get cute – Don’t manipulate

EXEMPT ANNEXATION

• There is an expedited version of this calendar, but be very, very careful

• Development Agreement under 43.035

• Day -21: Resolution setting public hearings & directing notice; Send written notice to property

owners and entity notices 30 days prior to public hearings §43.052(h)(1) §43.062

• Day 1: 10-20 days prior to 1st hearing, Publish hearing notice, post on web, send notice to school

district, send notice to railroads with ROW §43.063 §43.905

• Good time to post draft service plan to website

• Day 12: Hold 1st public hearing 20-40 days prior to the first reading of the annexation ordinance

§43.063

• Day 15: Publish notice of 2nd hearing, post on web, §43.053 §43.063(c)

• Day 26: Hold 2nd public hearing 20-40 days prior to the first reading of the annexation ordinance

§43.063

• Day 47: Adopt Annexation Ordinance (Institution of Proceedings*)

• Day 136: Ordinance requiring more than one reading must be passed by this date

BATTING CLEAN-UP

• Update Official Maps

• Comply with Voting Rights Act Requirements

• Notify required state offices (State, Comptroller,

etc.)

• Appraisal District

• Telecoms, Gas companies, other franchises

• Record with County Clerk

• Sales tax is implemented quickly following state

notices

• Property tax goes into effect January 1 of the year

following annexation

• Follow your service plan… or else…

DISANNEXATION

• 43.141 provides method for citizens to petition

annexation for failure to provide services

• Petition standards listed in code; fairly strict

• If city refuses to disannex within 60 days of

petition, petitioners can file in district court of

the county

• Refunding taxes & fees

• If disannexed, can’t touch it for 10 years

• Not in the statute: a disannexation is an efficient

way to shorten your career as a public servant or

elected official—take annexation & annexation

service plans seriously!

I’LL SEE YOU IN COURT

• Lawsuit

• Void acts – may only be brought by landowners

• Legal description doesn’t close

• Land not in eligible area

• Voidable acts – Quo Warranto. Brought by

state’s attorney. Citizen may request suit, buit

suit is at state’s discretion

• Procedural errors

• Constitutional problems

• Statute of Limitations

• Mandamus actions: 2 years

• Others by validating statutes: LGC 51.003, 3

years if act not void

LESSONS TO TAKE AWAY

• Follow procedures to the letter

• Maintain the record

• Be up-front & honest – save yourself the pain

• Monitor the cities around you… and work together!

• Be creative in considering other alternative methods to manage growth

• The TML website is super-handy

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