Rational Municipal Annexations and Reorganizations

Watchdog Indiana Home Page Municipal Annexation Reform

Overview

The illogical and predatory involuntary 2013 municipal annexations proposed in the southeast quadrant of Boone County dramatically emphasize the need for rational municipal reorganizations and annexations.

Please refer to the following map. The current twisted boundaries and excessively large territory of the City of Lebanon and the towns of Whitestown and Zionsville are readily apparent. Whitestown and Zionsville probably have fewer residents per acre than any other municipality in Indiana.

Early in 2013, Boone County was in the midst of an annexation war. Whitestown was attempting three annexations that total 5,528 acres. Zionsville was trying to annex 3,958 acres desired by Whitestown, and Lebanon was trying to grab 1,350 acres away from one of Whitestownís annexations. Most of the territory within all these proposed annexations was farm land. None of the proposed annexations met even one of the following three criteria: (1) a resident population density of at least three persons per acre; (2) sixty percent of the territory is subdivided; and (3) the territory is zoned for commercial, business, or industrial uses.

A closer look at Lebanonís recent annexation history shows how Indiana Code changes are needed to help make the Boone County annexation mess more logical and less predatory.

Territory #1 on the map above is the 3,849 acres within Lebanonís municipal boundaries just a few years ago. Territory #2 is the 3,675 acres involuntarily annexed by Lebanon in 2009 along the I-65 Corridor. According to Lebanonís I-65 Corridor Annexation fiscal plan, by 2019 developers will build 3,486 homes with an average $145,000 sales price and 40 commercial developments with an average $18 million net assessed value. Today there are supposed to be 1,387 new homes and 15 new commercial developments within the I-65 Corridor Annexation territory. However, zero new homes and commercial developments have been built. Meanwhile, the portion of the annual Lebanon resident property tax bill that goes to the City of Lebanon has increased 29% since the I-65 Corridor Annexation, and the cost per kilowatt hour for electric service has increased 20% - at a time when the cost of living increased only 7%.

Earlier in 2013 Lebanon was pursuing another involuntary annexation of a whopping 8,270 acres within Territory #3 and Territory #4 on the map above. This 8,270-acre annexation would have increased its total land area by 110%. Lebanon scaled back its land grab desires to the 1,350 acres in Territory #4, but the extent to which this smaller involuntary annexation remains illogical and predatory is clearly shown online at Lebanon Worth Annexation. Mainly because of the results of a successful remonstrance petition effort, Lebanon abandoned its unwise annexation attempt of the 1,350 acres in Territory #4.

 

Indiana Code Changes Needed

Please see the "Municipal Annexation Reform" web page at http://www.finplaneducation.net/municipal_annexation_reform.htm

 

Progress Made: Rational Municipal Annexations

Senate Bill 285 passed during the 2013 General Assembly session. SB 285 contains the Taxpayer Friendly annexation provisions listed next, which were effective upon passage. Complete SB 285 information can be obtained online at http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2013&session=1&request=getBill&docno=285.

(1) SB 285 provides that if a municipality annexes contiguous territory that is zoned agricultural, it may not collect property taxes for municipal purposes so long as the property retains that zoning classification. SB 285 also provides that the property owner must agree to any zoning change from agricultural to another zoning classification. Furthermore, any annexed territory that is zoned agricultural may not be considered a part of the municipality for purposes of annexing additional territory through an involuntary annexation. Since a municipality cannot collect property taxes for municipal purposes from territory that is zoned agricultural and whose annexation effective date is after April 26, 2013, forced farmland annexations will not lower existing municipal property tax rates Ė thereby removing one supposed justification for municipal annexations.

(2) (NOTE: "Annexation of rural areas" will be considered by the 2013 Interim Study Committee on Economic Development.) SB 285 authorizes the establishment of the interim study committee on annexation to study (a) the annexation process; (b) the impact of annexation on property owners and political subdivisions, including the shift in assessed value between political subdivisions; and (c) limiting the assessed value that a municipality may annex in a year or other period. Concerned Hoosiers can stay abreast of the annexation study committee schedule so as to provide pertinent testimony showing how the Indiana Code can be improved to make municipal annexations more rational and less predatory.

(3) SB 285 provides that if a person waives the person's right to remonstrate against an annexation as part of a contract with a municipality for providing sewer service to the person's property, the release is not binding on a successor in title to the property unless, for sewer contracts executed after June 30, 2013, the successor in title (a) has actual notice of the waiver or (b) has constructive notice of the waiver because the contract (or a signed memorandum of the contract stating the waiver) has been recorded in the chain of title of the property. Persons purchasing property will know definitively whether the prior property owner waived the right to remonstrate; otherwise, the property purchaser will have the right to remonstrate.

 

Progress Made: Rational Municipal Reorganizations

Senate Bill 343 passed during the 2013 General Assembly session. The Taxpayer Friendly local government reorganization provisions contained in SB 343, which are effective after December 31, 2013, are summarized next (complete SB 343 information can be found online at http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2013&session=1&request=getBill&docno=343).

A. Reorganization Plan. The legislative bodies of the reorganizing political subdivisions (rather than a reorganization committee) must prepare a reorganization plan which must be adopted by the legislative bodies before the proposed reorganization is placed on the ballot.

B. Changes to Current Levels of Services. A plan of reorganization may establish within a reorganized political subdivision territories or districts: (i) in which specified services provided by the reorganized political subdivision will be provided at different levels, quantities, or amounts and (ii) in which the fees, charges, or taxes imposed by the reorganized political subdivision will vary depending on the level, quantity, or amount of the services.

C. Parks and Recreation, and Zoning and Planning. If authorized by the reorganization plan, a reorganized political subdivision created from two or more townships and at least one municipality may exercise park and recreation powers, establish a park and recreation board, and exercise planning and zoning power. A reorganized political subdivision must, by resolution or in the reorganization plan, determine the number of members to be appointed to the reorganized political subdivision's park and recreation board, advisory plan commission, and board of zoning appeals.

D. Fiscal Impact Analysis. A reorganization plan must have a fiscal impact analysis that includes at a minimum the estimated effect on the taxpayers of each political subdivision, a description and the method(s) of financing planned services, a description and the method(s) of financing capital improvements, and any estimated effects on nonparticipating political subdivisions in the county and its taxpayers. The fiscal impact analysis must be submitted to the Department of Local Government Finance (DLGF) at least six months before the election in which the proposed reorganization public question will be on the ballot.

E. Department of Local Government Finance. Not later than 30 days before the election on the public question, the DLGF must review the fiscal impact analysis, make any appropriate comments concerning the fiscal impact analysis to the legislative bodies of the reorganizing political subdivisions, and post the comments on the DLGF Internet web site.

F. Description for Ballot. The county election board must submit the public question language that will be placed on the ballot to the DLGF to evaluate whether the description of the reorganized political subdivision is accurate and not biased and approve or make binding recommendations.

G. County-Municipality Approval Threshold. For a reorganization between a county and a municipality to be approved, the number of voters voting to approve the reorganization must equal or exceed the approval thresholds set in the reorganization plan for the municipality, for the area of the county outside the municipality and countywide. The approval threshold for the municipality and area of the county outside the municipality must be greater than 50% but not more than 55%. (Under current law the approval percentage for the countywide vote must be greater than 50%.)

H. Municipality-Township Tally. In the case of a proposed reorganization between a municipality and a township, the voters residing within the municipality must be included only in the tally of votes for the municipality and the voters who reside within the township but do not reside within the municipality must be included only in the tally of votes for the township. This means that a densely populated municipal area cannot force a merger onto a less populated rural area without the consent of rural voters.

I. Municipality-Township Approval Threshold. For a reorganization between a municipality and a township to be approved, the number of voters voting to approve the reorganization must equal or exceed the approval thresholds set in the reorganization plan for the municipality, for the area of the township outside the municipality, and for the combined area of the township and the municipality. The approval threshold for the municipality and the area of the township outside the municipality must be greater than 50% but not more than 55%. The approval percentage for the combined area of the municipality and the township must be greater than 50%.

J. Rescinding a Plan of Reorganization. The legislative body of a reorganizing political subdivision would be allowed not later than July 15 to adopt a resolution rescinding a previously adopted plan of reorganization.

K. Petition. A petition filed by voters to initiate a reorganization or conduct a public question on a plan of reorganization that was not adopted by the political subdivisions must contain each petitioner's signature, printed name, and residence mailing address.

L. Nonreorganizing Political Subdivisions. If a political subdivision is located in whole or in part within one or more other political subdivisions that reorganize and the first political subdivision does not participate in or does not approve the reorganization, (i) the reorganization does not affect the rights, powers, and duties of the first political subdivision and (ii) the reorganized political subdivision may not exercise within the first political subdivision any right, power, or duty unless that right, power, or duty was exercised within the first political subdivision before the reorganization by at least one of the reorganizing political subdivisions.

Watchdog Indiana Home Page Municipal Annexation Reform