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2. Extension of Services PolicyCity of Kalispell Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758 REPORT TO : Honorable Mayor and City Council FROM: Chris A. Kukulski, City Manager SUBJECT: How to Deal with Fringe Developments MEETING DATE: May 22, 2000 BACK GROUND: At the January 10, 2000 work session, the Council and staff discussed at length issues dealing with fringe development. As a result of that discussion, staff received direction in three areas: Develop a listing and map of parcels outside the City that are receiving City services; begin a dialog with the County and these City -served neighborhoods regarding annexation; and identify ways to provide City services to non-contiguous areas that may be annexed in the future. The results of this work to date are as follows: 1)Identification of parcels. The staff attempted to prepare a list of parcels outside the City limits currently receiving sewer service. As a first step, the City Clerk attempted to locate all known waivers and petitions. This was not an easy task. The files are incomplete and scattered about because over the years there has been no consistent filing method or location. Some documents were in the Clerk's office, some in the City Attorney's office, some were in the basement, and some were in the vault. It is probable that there are still others not found simply because we do not know where to look. To compound the problem, not all the petitions and waivers were recorded with the County. The list of what we have found, along with utility billing information, was given to FRDO in order to develop a map. The map shows, to the best of our ability at this time, those parcels that are receiving sewer service and their locations with respect to City boundaries and whether waivers of protest or petitions to annex are on record. The staff has reviewed the resulting map and we believe it does not appear to represent an accurate picture, based on our initial expectations and understanding of past actions and decisions by the City Council, of the current situation. P.J. Sorenson, the City's Zoning Administrator, has been tasked to further research the matter and improve the accuracy of the data. With P.J.'s experience in zoning and his legal background, we are confident that many of the inaccuracies will be resolved. The latest map representing progress to date will be available for the meeting. 2)Discussion of annexation. Staff was directed to begin discussions with representatives of these outlying neighborhoods and the County Commissioners to determine how we can move forward with annexation. I met with Bill Astle to gain insight on his perspective of the issue. Mr. Astle was legal council for Evergreen and Greenacres during the last annexation effort. Bill currently represents several neighborhoods that are fighting annexation by the City of Whitefish. In a nutshell, Mr. Astle contends that cities cannot annex areas on the basis that we (the cities) are providing services when in fact the area is paying an SID for the improvements that are providing the services. On this point, needless to say, I disagree with Mr. Astle, as do most city attorneys around the state. It is likely that the Montana Supreme Court will need to resolve this issue. A decision on this is expected within the next year (Whitefish) . I also spoke with County Commissioner Williams who offered no advice. He indicated this is an issue between the neighborhoods and the City. In addition, I met twice with representatives of the Flathead County Water & Sewer District #1 (Evergreen). The District indicated that they had no role to play in the annexation issue. They are nothing more or less than a delivery system for water and sewer services. 3)Serving non-contiguous parcels. The City staff has investigated ways to provide services to non-contiguous parcels. The initial step was to determine the potential for developing exchange of service arrangements between the City and County so we could avoid sending City personnel out to a non-contiguous service area. This would involve the City performing County tasks in contiguous or near contiguous areas in exchange for County personnel providing similar services on the City's behalf in the non-contiguous City areas. For the three primary services, Police, Fire and Public Works, we have identified no potential for exchange with the County that would ensure the property owner would receive a level of service reasonably equal to that received by their counterparts within the City limits. Police - After meeting with the Sheriff's Department, it appears we would need to pay them for providing the service on our behalf. The Sheriff has five Deputies on duty covering the entire County while the City has six officers on duty within the City limits. Therefore, it seems inappropriate to consider such payment since we could likely respond more quickly to an incident than could the Sheriff. More importantly, the City could be held liable if a lawsuit resulted from an improperly handled incident. This is a significant potential liability. Though it would be less efficient to serve an island (depending on location), it would not warrant paying someone else to provide the service. Fire - Fire is the most difficult to deal with. The exact same issues that pertain to police would also be of concern for the fire department. In addition to those issues, the City's ISO rating could be adversely effected, depending on the location of the island and what, if any, success we have in developing adequate joint response arrangements. This would be of critical importance when a response is required north, or northeast, because this is a known problem. In addition, Police and Fire protection are two of our greatest selling points. It is not in our interest to compromise these services for City taxpayers by lowering the standard of quality. Public Works - It is our understanding that the County does not accept new streets into its maintenance system. So their willingness and ability to provide services on our behalf is uncertain. Existing developed areas of recent construction are, to our knowledge, not receiving such routine services as plowing or sweeping. Where these services are provided in older areas the standard of care is substantially different from our own. We believe that this exchange would be viewed as substandard to regular City services. There are no County water or sewer maintenance services to exchange. I have tried to view this issue, as would a resident of one of the areas to receive sub -contracted services. The idea of receiving lower quality services sub -contracted from the County would be unacceptable to me if I lived in one of these areas. The liabilities associated with Police and Fire add a tremendous negative aspect to consider before making this exchange. Worse still is the probability of adversely effecting the City's ISO rating. This would be counter- productive to all the City's effort to improve this important factor. I believe that unless the area to be annexed is either close to the current City limits so that we can provide our own services with an efficiency equal to our regular services, or the project is so large that it pays for the resulting inefficiencies, I would recommend the City not provide services to an area until it is contiguous to the City. In conclusion, I believe we need to address the fundamental problem which is the continuing growth in areas far beyond the City's boundaries but are adjacent to the boundaries of the Evergreen utility service area. In my view, there is one logical answer, annex all the areas that look, feel and for all intents and purposes are a logical and sensible part of the City of Kalispell. At that point the issue of contiguity is resolved. Ninety nine percent of future projects would not be a political or administrative headache once these areas have become part of the City of Kalispell. For developments like the Lincoln and Farris proposals, I recommend we defer providing City services until they fit into one of the two categories. They must either be contiguous to the City limits or so close to the City limits that efficiency in not an issue, or they should produce sufficient tax revenue to pay for the inefficient delivery of services. If their development plan warrants it, they may facilitate their plans by assisting the City to deal with the annexation issue by encouraging Evergreen to promote resolution of this matter once and for all. Attached is a copy of the January 10 workshop memo so I will not restate those points. RECOMMENDATION: The City Council should express its support for this position. The City has been close to resolving this in the past but a for a variety of reasons we failed. As a result this problem continues to plague the City. FISCAL EFFECTS: Unknown. ALTERNATIVES: As suggested by the City Council. Chris A. Kukulski City Manager