2. Annexation Policyof
Past Office Box 1997 . Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758
REPORT TO: Honorable Mayor and City Council
FROM: PJ Sorensen, Zoning Administrator
Chris Kukulski, City Manager
SUBJECT: General Long-term Annexation Strategy
MEETING DATE: February 11, 2002 (workshop)
BACKGROUND:
The focus of this workshop is not so much the specific provisions of any single
annexation, but is rather a generalized discussion of our long-term annexation strategy. This
memorandum discusses annexation in general and anticipated steps for implementing an
annexation plan.
Fiscal Effects
Although direct fiscal effects of a given annexation can be estimated on a case -by -case
basis, it is critical that we approach the issue from a more comprehensive perspective. Without an
expansion of our city limits to match the actual growth of the city, we will encounter increasingly
difficult situations. For example, the proposed mall is immediately adjacent to the boundaries of
the developed areas around Kalispell, but is a substantial distance from the city limits. The
situation creates very real and significant problems in the provision of services (how to resolve
that particular matter is for a different meeting). The end result will be either (1) stagnation in
terms of growth for our entire area due to a lack of efficient services; or (2) the at least partial
envelopment of the city by non -urban development. Neither is desirable for Kalispell, and both
stand to cost the City in the long -run much more than relatively minor pluses or minuses for
individual annexations.
Preempt Arguments Against Annexation
Although there are many issues raised by property owners subject to annexation, two
stand out as the most frequent: taxes and horses. Taxes are always an issue. Horses become an
issue at the urban fringe when someone has kept horses or other animals on their property, and
the city code section prohibiting such animals within the city limits suddenly applies.
While we cannot eliminate the fact that a property owner pays more in taxes after
annexation, we can take steps to help mitigate the impact by limiting assessments on large
residential parcels to a level more in line with the standard range of city property sizes. In order
to do so, we can pass an ordinance amending our method of assessments.
Horses have been expressed as a primary concern of several individuals. We can amend
the animal ordinance to allow farm animals when allowed by zoning. Presently, the R-1 zone
allows agricultural uses, including animals.
Additionally, the Extension of Services Plan should be amended. Presently, it allows
properties outside the city to connect to city services with only a waiver of protest. Waivers have
not worked especially well. Property owners still raise a political fury (see, e.g., Village Greens
and Greenacres), and people have raised legal arguments, valid or not, that the waivers do not
apply to future property owners. Instead, we should require immediate annexation if a property
owner wishes to connect to city utilities. Annexation at that time services are extended is not only
the appropriate time, but it also avoids situations such as Greenacres in which we have provided
services for years and face vigorous opposition when we finally proceed with annexing the
property.
Specific Potential Areas ofAnnexation
(1) Greenacres: Greenacres has already been the subject of a recent work session by the
Council. Staff is currently refining an extension of services plan for the area. At this point, each
department has put together a preliminary draft relating to their function. A full final draft will be
presented to the Council in the relatively near fixture for your consideration.
(2) Stillwater Estates: Stillwater Estates Phases I and II are located adjacent to and to the
north of Section 36 (the section owned by the State subject to a recent PUD agreement). Despite
its proximity to city services, the most recent phase of the subdivision was approved by the
County without the requirement of utilizing city sewer. The final plat includes a waiver of the
right to protest annexation, and we are contemplating initiating the annexation of both phases.
(3) Ever rgreen: The Evergreen area is clearly the largest developed area adjacent to, but
outside of, the city limits. It is also by far the most complex in term of both politics and legal
standards. At this stage, we have identified an area along Highway 2 out to approximately the
Stillwater River as a potential area of annexation (a map will be provided at the meeting). Within
that area, there are a sufficient number of waivers/consents to annexation to support an
annexation action by the City. There are, however, issues related to the Evergreen sewer
agreement which likely will generate a legal challenge, although that would not necessarily
prevent such an annexation from occurring. Nevertheless, we anticipate seriously pursuing this
annexation shortly.
The larger question of the Evergreen area as a whole is even more complex, due in large
part to the sewer agreement. It is our intention to continue to actively examine the issue in the
long-term, and proceed with annexations in the area as deemed appropriate.
(4) Village Greens: All of the platted residential lots within Village Greens have been
annexed. Unplatted areas planned for residential development have not yet been annexed. Also,
the bulk of the golf course as well as the clubhouse buildings remain outside the city limits. In the
long-term, such an arrangement is troublesome because of the confusion it generates, particularly
for emergency personnel.
Eventually, the residential areas will annex as they are platted, and the clubhouse will
likely be annexed due to its sewer connection, leaving the golf course itself as a potentially
difficult annexation. This situation brings up a point of general importance: we should consider
creating incentives for the annexation of adjacent, undeveloped land, as well as for larger parcels
such as the golf course. For example, a favorable tax structure for such property combined with
other incentives, such as reduced processing fees, would encourage developers to bring property
into the city prior to development. The benefits to the city would include (a) gaining control over
the approval process and eliminating issues similar to the Stillwater Estates septic approval; and
(b) extending the city limits to facilitate other developments, e.g. the annexation of Section 36 as
undeveloped property could allow the annexation of Stillwater Estates as contiguous land. As
applied to Village Greens, the annexation process for the unplatted residential areas could be
accelerated and an annexation of the golf course could be simplified.
(5) Wholly surrounded parcels: There are several areas which are wholly surrounded by
the city, including North Haven Heights and the area lying generally between Rawson Field and
South Meadows. Wholly surrounded parcels are relatively simple to annex unless the property is
used for various industrial or agricultural purposes, or for specific types of uses such as golf clubs,
airports, and cemeteries. Bringing these areas into the city makes sense in that they are already
entirely surrounded by the city.
(6) Implied consents: There are approximately 50 properties (excluding those properties
contained in other annexation groupings) located outside the city limits which are connected to
city water and/or sewer. The City has adopted a rule allowing it to imply consent to annexation if
no express consent has been given. We should initiate the process to annex those properties.
General Process
The first step should be laying the groundwork for preempting arguments against
annexation (i.e. taxation of large residential parcels and horses) and establishing incentives for
annexation prior to development. Also, the Extension of Services Plan should be amended.
The second step should be the initiation of annexation proceedings for Greenacres,
Stillwater Estates, and Evergreen (along Hwy 2 to the Stillwater). Staff has accomplished varying
degrees of preparation for each, and the annexations could begin as deemed appropriate. The first
step would not necessarily need to be completed prior to these annexations.
After completing the annexation for specifically identified larger areas, the third step
should involve the annexation of wholly surrounded areas and individual parcels connected to city
utilities. This step would likely be accomplished by processing several such areas/parcels
simultaneously and approving the multiple annexations at the same series of council meetings.
Finally, continued examination of the Evergreen area with an eye toward potential future
annexations is appropriate. Depending upon the results, we may or may not seriously pursue
additional annexations in the short and/or long-term.
RECOMMENDATION: The Council should direct staff to pursue annexations according to
the general strategy outlined in this memorandum.
ALTERNATIVES: As suggested by the Council.
Respectfully submitted,
MFF
PJ Sorensen
Zoning Administrator
Chris Kukulski
City Manager
Report compiled February 6, 2002