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05. Review Annexation/Evergreen Commercial Stripy 1� 01, Incorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, Montana Zip 59903-1997 MEMO To: Mayor & City Council I From: Al Thelen, Interim City Manager Date: August 8, 1996 Re.: Evergreen Annexation The Evergreen Annexation that we are proposing as an initial step includes the commercial strip between the current City boundary and West Cottonwood Drive, which includes thirty- four (34) properties. The proposed boundary is designed so that we will have waiver's of the right to protest/request to withdraw from the fire district from more than fifty (50) percent of the property owners. Our current numbers set the property taxable values at $520,000, the potential increase in property taxes to the City at $60,403, street assessments at $10,493, storm sewer assessments at $10,844, and gambling revenues at $75,000, for an estimated total of $156,740. The properties to be annexed will not be required to pay the current Road Levy, which is currently 15 mills; therefore, their county taxes will be reduced by $6,000. Our service study reflects that we can , serve this area with our existing manpower and equipment so the major advantage to the City will be the increased tax base. Douglas Rauthe Mayor Al Thelen Interim City Manager City Council Members: Gary W. Nystul Ward I Cliff Collins Ward 1 Norbert F. Donahue Ward II Dale Naarr Ward II Jim Atkinson Ward III Lauren Granmo Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV Mayor and City Council Page 2 August 12, 1996 Attached is a memo from City Attorney Glen Neier that indicates two legal approaches to annexation. We will be using section 7-2-4314, which allows for 50% + 1 of the owners to protest out the annexation. As Glen's opinion indicates if boundaries are designed so that 50% + 1 of the owners have consented to the annexation, no legal protest could be filed. The time table for this proposal includes: July 29 Council Workshop -Define Boundaries -Identify All Affected Tracts -Discuss Revenues/Costs -Draft Extension of Services Plan August 12 Council Workshop -Discussion of Resolution of Intent August 19 Vote on Resolution of Intent August 20 Send Notice to Property Owners & Purchasers Under Contract for Deed August 20 Submit Notice to Daily Inter Lake for Publication August 25 Notice Published September 1 Notice Published 2nd Time September 14 End of 20-Day Protest Period September 16 Council Hearing on Question of Annexation It is anticipated that the second phase of the annexation will proceed after October 1, 1996 and will include the balance of the so called "commercial strip" and the Attorney General's opinion referred to in Glen's memo will be the legal basis for Phase II. It can be implemented prior to the end of the calendar year. Mayor and City Council Page 3 August 12, 1996 Since our meeting on July 29, I have received some inquiries from Council members regarding an agreement by the City not to consider this item until at least the year 2000 because we agreed to this delay. I have enclosed a copy of a letter from the City Manager to Senator Harp and a copy of Bill Astle's letter indicating he would see that the City Manager's letter was brought to the attention of the Evergreen Coalition. The files do not reflect that a response was received, and Senate Bill 52 was passed and became law. I have also received inquires and concerns that the way the staff has proposed the use of "Waivers of Right to Protest" the City is gerrymandering and again trying to grab revenues. My reaction to that is that the City is using strategic planning to use the "waivers" to meet City goals. It is one of the management tools available to cities to meet it's goals. Your number one goal established earlier this year is to have a "financially sound and stable City Government." The annexing of strategic commercial areas on the fringe of the City is in concert with this goal. As mentioned in your July 1st memo, all of the reasons the Council used in 1993-94 to annex this commercial area are as valid today as it was in 1993-94. Brian Wood's updated service plan and statistical data relating to this annexation is enclosed. I have also enclosed a historic memorandum regarding the Evergreen Annexation. 0 C��� 0i �Jl�vll Incorporated 1892 Telephone (406) 758-7700 Douglas Rauthe FAX (406) 758-7758 Mayor Post Office Box 1997 Kalispell, Montana Bruce Williams Zip 59903-1997 City Manager DATE: July 22, 1996 City Council Members: TO: Al Thelen Gary W. Nystul Ward I FROM: Glen Neier Cliff Collins 4 Ward I RE: Protest Scenarios Greenacres/Evergreen Annexations Norbert F. Donahue Ward 11 Over the past several weeks the City staf f has been working Dale Haarr on two proposals to annex a portion of the Greenacres area Ward11 South of Kalispell and a portion of the Evergreen Strip. You have requested an analysis of the number of properties Jim Atkinson subject to annexation within each area based upon the Ward III number of consents or waivers possessed by the City. Lauren Granmo Ward III The City would probably attempt to annex both areas under Pamela B. Kennedy Title 7, Chapter 2, Part 43 Annexation of Contiguous Land Ward IV Montana Code Annotated. Assuming that preliminary matters are in order and the Council passes a Resolution of M. Duane Larson Intention in either annexation, protests to the annexation Ward IV are dealt with as follows: § 7-2-4314 2) The resolution (finally annexing the property) may not be adopted by the city council if disapproved in writing by a majority of the real property owners of the area proposed to be annexed, and further resolutions relating to the annexation of the area or any portion of the area may not be considered or acted upon by the council on its own initiative without petition, .for a period of 1 year from the date of disapproval. The City has in its possession Consent to Annex forms signed by many "property owners" within both the Evergreen and Greenacres area. If boundaries are established for an area in which over 50% of the "property owners" have consented to annexation, the City should be able to resist any challenge to the annexation based upon protest from the Al Thelen July 22, 1996 Page 2 area. "Property owners" for purpose of protest would be the owners of platted tracts or the owners of unplatted tracts for which there is a survey. (S 7-2-4311, MCA) Each tract, platted or unplatted, would have one vote in protest. If certain properties protested, having previously consented, the City could use the consents to defeat the protest. Under a previous memo, I discussed the effect of a certain A.G. opinion which held a municipality may adopt a rule conditioning receipt or continuation of water and sewer service on annexation. I€ such a rule was in effect, the City, according to the opinion, could decline to recognize protests because of the election to receive or continue service. As that opinion applies to Greenacres, it would appear to me that the City could argue that individuals within the area to be annexed are served by the sewer and/or water and, therefore subject to annexation under the A.G. opinion. The interpretation would generally increase the number of tracts subject to annexation because there are more lots receiving service than have consented to the annexation. It should be pointed out that the A.G. opinion has not been litigated so there would conceivably be a challenge to an attempt by the City using the opinion as a basis to reject protests. However, if the opinion holds up, the City would be able to annex twice the number of properties that it actually serves. The A.G. opinion has less applicability to Evergreen than Greenacres. In Evergreen, the City is not providing service directly to those individuals served by Flathead Water and Sewer District. I don't believe the City could successfully bootstrap service to a District into consent of individual property owners in order to annex. However, in the Evergreen strip area we have quite a number of recorded consents, which may be used to counter protest received from real property owners within the strip area. GN/sh PC: City Council Incorporated 1892 Telephone (406) 758-7700 Douglas Rauthe FAX (406) 758-7758 Mayor Post Office Box 1997 Zip 59903-1997 Bruce Williams City Manager January 24, 1995 City Council Members: FAXED This Date 1-900-225-1600 Gary W.Nystul Senator John G. Harp Ward I Senator Majority Leader Cliff Collins State Capitol Building Ward I Post Office Box 201701 Helena, MT 59620-1701 Barbara Moses Ward II Dear Senator Harp: Dale Haarr Ward It The Kalispell City Council last evening discussed the Jim Atkinson possibility of compromising its position with regard to the Ward III Evergreen Annexation dispute. Lauren Granmo The City Council consensus is that a compromise makes sense if Ward l!! it brings about peace between local neighbors and eliminates Pamela B. Kennedy the need to amend Montana's annexation laws as suggested by Ward IV SB-52 . M. Duane Larson Ward IV The Kalispell City Council therefore suggests that the annexation be phased over the next five years. Phase I would include those properties between the city's eastern boundary and the Still Water River. Annexation of Phase I would take place some time during the spring of 1995. Phase II would include all the remaining parcels identified in the city's Resolution of Intent to Annex #4717. Phase II annexation would begin sometime after July 1, 2000. It is our sincere desire that this compromise is acceptable to you and results in a good faith effort by you to discontinue advancing SB-52. We also look forward to an agreement from your constituents affected by the future annexation accepting the city's compromised position. We look forward to your favorable response. Sincerely, ---45tuu�0j64� Bruce Williams City Manager BW/ksk t Lb � 4 19� ASTLE and ASTLE ATTORNEYS AND COUNSELORS AT LAW 706 MAIN STREET KALISPELL, MONTANA 59901 DAVID L. ASTLE WILLIAM E. ASTLE February 24, 1995 HAND DELIVERED Mr. Bruce C. Williams Kalispell City Manager City Hall Kalispell, MT 59901 Re: Kalispell/Evergreen Annexation Dear Mr. Williams: TEL. (406) 752.7393 FAX (406) 267-3268 Please be advised that I am in receipt of your letter of February 23, 1995, relative to the above matter, in particular the subject of a resolution of annexation being presently adopted with an effective date of January 2000. I have forwarded your letter to the Evergreen Coalition for review and response, which as you know includes the property owners in the intended area of annexation. Very truly yours, ASTLE & ASTLE WEA/s(p m Q O CD CL 0 O M Q O (} H W C Ll rnCD 0 cr CD (!) © 0 �' CL d n to m 5, D t v m qD N C} O <7t Ci 41,l CJ W --4 coo co C1 N co CPA N A W o C�Jt C) y A CD ao at w 'rim cs na co CD iy '•7 -r PV Ca tD trS + 0e -4 C? r4 Qi Qx W � � Ul to �I 4R -i -4 N 4) W iC 4i N O Gft do QD t!� C) 4V co s i Cet C1 ..► co Ph, CWo eta TG �i} W ► s C3t IV h1 �i W 4b. c W O P K9 O c& 00 C7a W .A 0 W W Cfl 4 G14 W C O N W d 4» d h! A Ga tr7 a r!1 41h Q CD cAt ..,( b3 W CFI .& -* O Cti to C10 W A V ¢�t�! �P CD CAfa 1w s w tR m M ol V A us Qr Go N F,� V •a W Si "4 O> U7 W O W 07 (JR i GR N m O A lV N p► iJt c» O? O N 0 co co � � 47 w Co Q bD � s _(ps Gs i0to co pO .fir. rD Gi ° 4bbi? PiCDI t7 e iV N 111 N N N N � �J -4 m m E H Q n CP V c7 oo o Z N txt w Q co � 3 � 4- i� O i N i -b N (© o allo -L fw 'i -CY)i � h! p CWv tr! 0 iy7B -4j -4 .I -A CA) � CJ Gb 'r3 ep iP t11 `rC} pt a 4�- �s Q O S�Jt Opp CP � NG I W P:i Cn o NJ "� s -� i i N CA A I iG Q m Q3 =i L :.� opossi•T O Y M Ste+ w w w 1v Iv C�+ P 7t G7 ca v+ as � -S o co --i-.f � Ci O l y FO h% cl i j i a 'n-�hiy W tLi ra1� � ps. w7 a E46 c � A �� cl cCf) w -��t � Qi � Q 0 SUBJECT: Evergreen Annexation - Issues - Extension of Services - Fiscal Impact This Memorandum is presented as an outline of issues and observations and to transmit data, including fiscal notes compiled for the preliminary presentation scheduled for the Kalispell City Council - Work Session to be held on January 24, 1994. Attached to this Memorandum are the following documents: 1. Evergreen Extension of Services Plan: Description of Property & Owners To Be Annexed 2. Evergreen Extension of Services Plan: Current Tax Information 3. Evergreen Extension of Services Plan: Tax Comparison(s) w/Annexation Introduction: For the purpose of clarifying important facts and issues and as a reference point for the City Council, I would like to take a brief walk back into the recent history of the Evergreen Sewer Service Extension Agreement and the question of when and how annexation was contemplated as part of the Council's approval process. As we began tonight presentation of the Evergreen Annexation Issues, Extension of Services and Fiscal Impact, it is important to revisit Council intent and actions to date. While the discussion began over a decade ago, I'll go back only to the Spring of 1990 when Councilpersons Granmo, Larson, Atkinson, Moses and Nystul were all present and voted on Councilman Schindler's historic motion, a motion which was seconded by Councilman Nystul, to wit: "...that the city of Kalispell accept the sewage from Evergreen based on a 51% or greater waiver of annexation from that area more commonly know as the strip, from the Underpass hill to K-mart. The specific boundaries of the business district to be negotiated between the Sewer & Water Committee and the Evergreen Sewer Department with all legal papers being signed, upon that agreement. " After a lengthy debate by the City Council which will be discussed in detail later in my comments, Councilman Schindler's motion was amended by Councilman Furlong, adding Date: January 25, 1994 Page 1 f Evergreen Annexation Staff Presentation Memorandum/City Council the very important language which has become the subject of much recent confusion. Councilman Furlong's amendment was... "...to provide for the right to immediate annexation of whatever specific district fulfills the 51% requirement". Furlong's amendment to Schindler's motion was seconded by Councilman Granmo. And after the amendment was moved and seconded, Councilman Larson spoke in favor of the motion with the amendment. He said it was a "reasonable compromise" (to annexing all of Evergreen) He said he felt Evergreen should be able to obtain the waivers of protest from the business district so that we could annex immediately if we chose to do so. " (emphasis added) A. Legislative Intent Of The Kalispell City Council It is important that we revisit the record of the March 19, 1990, actions of the Kalispell City Council, and once again relate, in some detail, what the record says. On March 19, 1990, after months of intense discussion and numerous meetings with the Evergreen Water District representatives Jack Fallon and its attorney Bill Astle, the City of Kalispell held a PUBLIC HEARING regarding a PROPOSAL TO PROVIDE SEWER SERVICE TO EVERGREEN RESIDENTS. When Mayor Hopkins opened the Public Hearing he said: "... the two -fold question is: 1. "Should we be accepting the sewage from Evergreen?" He said he thought everyone agreed on that. 2. "The larger question is whether or not we should take the sewage with the condition that at some point in the future, we have been talking, about ten years that the city would have an unarguable right to annex Evergreen?" (emphasis added) During the hearing, several residents of Kalispell expressed their views on the questions raised by Mayor Hopkins in his opening remarks including Bill Astle, attorney for the Evergreen Water District and Jack Fallon, their representative. Date: January 25, 1994 Page 2 Evergreen Annexation Staff Presentation Memorandum/City Council In general, the views of residents of the City of Kalispell could best be summed up by quoting former Mayor Tom Flynn's observations as he concluded his comments expressing concern for the ..."Shareholders, the City of Kalispell." Mayor Flynn said: "...the only decision is to insist on the waivers, (of annexation) signed by the majority of the property owners. Anything less than this tightens the noose already constricting growth in Kalispell. " According to the minutes of the meeting, Councilman Granmo reported that the City's Sewer and Water Committee met the preceding week for the sole purpose of... "clarifying the policy the council has set on November 20, 1989, which stated that annexation is not a negotiable item as regards treating the Evergreen Sewer District sewage." (emphasis added) Councilman Granmo went on to say that "...at the last council meeting it was not clear whether everyone in Evergreen had to sign the waiver or whether 51 % would be enough to make it possible for the City to annex anyhow. " Councilman Granmo then read the proposed motion drawn up by the City Attorney Glen Neier. To wit: "Prior to reaching any agreement to treat the affluent (sic) from the Evergreen Sewer District, consent to annex, notice of withdrawal from a rural fire district, must be executed by 51% of owners of land, contract sellers, and buyers and lien holders and 51% of the area within the Rural Special Improvement District, to assure that the City would be able to annex the property encompassed by the RSID no sooner than ten years from the date of the agreement. " Bill Astle, then argued that the Evergreen Water & Sewer District had adopted a position that the city had an obligation to serve the Evergreen area without the requirement of annexation and questioned the City's right to require annexation. City Attorney Neier advised the Council that... "Under the statute as we are considering it, the City has the discretionary right to demand annexation of parcels or portions to be served by the City Water & Sewer Utility. The City does not have the corresponding right to demand annexation from areas not to be served or merely subject to potential service. The City cannot be obligated to serve areas not subject to annexation." Date: January 25, 1994 Page 3 Evergreen Annexation Staff Presentation Memorandum/City Council After the Public Hearing was closed, several motions were offered, discussed and failed. It should be acknowledged here ---that up to this point in the discussion ---most of the motions included a consideration or provision that annexation would take place no sooner than ten years from the date of agreement or ten years of the date of the motion; however, the failed motion(s) also dealt with annexation of all of the property to be served by the Evergreen RSID, including all residential property located within the boundaries of the Evergreen RSID. In other words, most of what is currently known as Evergreen. Before I go on, it is important to understand .and to again emphasize that the Public Hearing and annexation discussions, up to this point of the March 19, 1990, City Council meeting, involved all property located within the Evergreen Sewer RSID boundaries. And, with the exception of Councilman Nystul, the rest of the City Council favored requiring a waiver of the right to protest annexation of at least 51 % of the owners and 51 % of the area of the Evergreen RSID. Finally, Councilman Schindler introduced a "compromise motion" he felt would address his concerns. Schindler's motion acknowledged that the City was mostly interested in the business strip, because "...that's where the tax base is and that's where the majority of the people are not protesting. " Schindler moved: "...that the City of Kalispell accept the sewage from Evergreen based on a 51% or greater waiver of annexation from that area more commonly know as the strip, from Underpass hill to K-Mart. The specific boundaries of the business district to be negotiated between the Sewer & Water Committee and the Evergreen Sewer Department with all legal papers being signed, upon that agreement. Councilman Nystul seconded the motion and stated that the motion "...is a compromise and is a positive one in that it gives a foot in the door from which annexation can grow in due course of time. " Most of the Council began to agree that it was an acceptable solution. For clarification, I have reviewed the record of the discussion following Councilman Schindler's compromise motion in an attempt to shed even more light on what appears to me to be clear "legislative intent." Councilman Furlong asked Schindler: "If we require 51 % of this specific district of that area (the Evergreen Strip) to sign the waivers, what does that do to all of the other areas of the district? Does it mean they shall be sewered without annexation? Date: January 25, 1994 Page 4 Evergreen Annexation Staff Presentation Memorandum/City Council "Schindler stated "yes." He said, and I'll repeat his comments, that he "...felt the general trend was that we were mostly interested in the business strip, that's where the tax base is and that's where the majority of the people who are not protesting are." He said he "...thought it would be a reasonable compromise between ALL or nothin . " (emphasis added) NOTE: JACK FALLON STATED "THE MAP THAT SHOWS WHO WILL AND WILL NOT SIGN HAS INDICATED THAT PEOPLE ON THE STRIP, BETWEEN UNDERPASS HILL AND K-MART WILL SIGN WAIVERS." In response to the motion on the floor, Councilman Atkinson expressed his view that the motion was "...like putting a little forger out there where it will need to be served by City Police, Water, Sewer, Fire and service." He said it was a "...misrepresentation of what the council has been interested in doing and that is creating organized growth in the City of Kalispell" (annexing all of Evergreen). Mayor Hopkins left no doubt as to his intent by stating he felt strongly that it is in the Ctty's best interest to require annexation. "One reason is to protect the tax base that has been built up for a period of 98 years from the original sewer and water system that was installed and we created what is Kalispell, Mayor Hopkins said. " Further, he said: "By allowing Evergreen to use our sewer system we have potential for development because they don't have to pay the City tax base. We could see the city's tax base erode at the cost to the (City) taxpayers," and that he did not feel "...we can tie the hands of future Council people to make a prudent good planning decision somewhere down the road as whether or not annexation is in the best interest of the city." Mayor Hopkins concluded saying, "...we may be setting a precedent for future erosion of the little tax base that we've required the waivers from. " Then, after this lengthy discussion, clearly focused on whether or not to annex the Evergreen Strip or commercial property, Councilman Furlong asked if Schindler's motion was... "EUPLYING EMAMDIA'I'E ANNEXATION OF THE STRIP." (emphasis added) Schindler said he "...was going by what was before, using the 10 year period ," which prompted Councilman Furlong to offer a very significant and clearly stated ended motion: Date: January 25, 1994 Page 5 Evergreen Annexation Staff Presentation Memorandum/City Council Councilman Granmo seconded the amendment to the motion on the floor. After reading all of the minutes of the meetings where these issues were discussed and decided, it is my opinion that Councilman Larson adequately summed up the legislative intent of the Kalispell City Council when he spoke in favor of the motion with the amendment offered by Furlong and seconded by Granmo: Councilman Larson said: "... it was a reasonable compromise ... I feel Evergreen should be able to obtain the waivers of protest from the business district so that we could annex immediatelv if we chose to do so." (emphasis added) The Council then approved the amendment to the motion to provide for the immediate annexation of whatever specific district fulfills the 51 % requirement. Only Nystul voted against the motion to amend. Thus, based on the discussion and the record, it appears the intent was clear to allow for annexation of the Evergreen commercial strip immediately. The Council then voted on the motion as amended and approved it. It should be noted here that Atkinson, Furlong and Moses voted against the motion as amended, it appears because it would eliminate the waiver of protest requirements of 51 % of all resident freeholders benefitted by the City sewer, and thus the consideration of immediate annexation of all of Evergreen rather than limiting immediate annexation consideration to only the Evergreen commercial strip. Again, allow me to emphasize that both Jack Fallon and Bill Astle were present during the full discussion of the intent and when the final motion was approved by the Council. They should not have any doubt as to the legislative intent of the maker of the original motion, the amendment, or those speaking for the motion as amended eliminating any inclusion of a 10-year waiting period and instead providing for the right to immediate annexation of the Evergreen Commercial Strip. The only stated opposition to that intent was from Councilman Nystui, the others who voted against the amended motion opposed it because it limited immediate annexation consideration to just the Evergreen Strip. I would also like to add here that Mayor Hopkins' comments in support of the motion and to clarify intent did indeed foretell future consequences. His observation that Date: January 25, 1994 Page 6 Evergreen Annexation Staff Presentation Memorandum/City Council "We could see the city's tax base erode at the cost to the (City) taxpayers," and that he did not feel "...we can tie the hands of future council people to make a prudent, good planning decision somewhere down the road, as to whether or not annexation is in the best interest of the city." Further, Mayor Hopkins said "...we may be setting a precedent for future erosion of the little tax base that we've required the waivers from. " Today, there are proposals to accommodate a new Walmart, Shopko, Ernst Hardware and 2 branch offices of area lenders. Because of the availability of City Sewer and lower land costs, there are other retailers considering Evergreen locations. Together, these developments, when combined with the "strip retail centers planned adjacent to them, will be the equivalent of at least two Kalispell Center Malls. It took over four years and a true reduction in rents and property values in other commercial properties to absorb the Kalispell Center Mall's impact on the market. These new Evergreen developments, when combined with discount retail located even farther out on Highway 2 North, will indeed have an impact on Kalispell's existing tax base. If you choose not to annex the area, you deny Kalispell taxpayers any opportunity to realize any net benefit that may accrue from these new developments, yet they will be asked to help support them. If you elect not to annex the Evergreen strip, Kalispell's taxpayers may be harmed; because history and the economic facts of life tell us that at least for a while, commercial land and building values and rents in Kalispell's older commercial areas will go down. So will the tax yields and benefits to those who support services in Kalispell. It is very clear today ---the owners of commercial property on the Evergreen Strip are benefiting handsomely because they can now sell their land with the promise of an affordable sanitary sewer system. In exchange, you have the right to expect them to become part of the tax base for the City of Kalispell and contribute just pennies per square foot for the benefits they could not have but for the City's substantial investment in a treatment facilfty and willingness to commit a fail 22 percent of its future rg owth Potential to the owners of Evergreen. Finally, at the Council's meeting of December 6, 1993, staff was requested to put together the particulars. B. Intent of the Evergreen Water District On November 1, 1993, the Evergreen Water District notified the City Council that it had formed or was representing the Evergreen Coalition which had requested and was granted until the first of the year to prepare its position on the proposed Evergreen Date: January 25, 1994 Page 7 Evergreen Annexation Staff Presentation Memorandum/City Council annexation. On January 3, 1994, William E. Astle, attorney for the Evergreen Coalition, further requested that the Evergreen Coalition be scheduled to make its presentation prior to the adoption of a resolution of intent to annex. The Evergreen Coalition, through its representatives William E. Astle, Jack Fallon and John Harp, has stated that it is adamantly and aggressively opposed to annexation of the Evergreen Strip. Their argument is simple and straight forward: Now that they feel assured that the City of Kalispell is obligated to provide access to its sewage treatment facility and is obligated to reserve 22 percent of its future capacity for Evergreen, so that it may grow and its Iand owners prosper and develop, they do not want to pay city taxes or become part of the municipality. it would seem that they would prefer to continue enjoying the benefits inherent to any business located in or adjacent to an urban center with a large population base paying for a wide variety of urban amenities which combine to make the entire urban area livable without requiring their participation in the costs. Simply stated, the availability of the City of Kalispell's sewage treatment facility has allowed existing owners and developers to assemble large tracts of rural land and either sell or develop it to maximum urban rather than rural densities, higher and better uses which demand municipal services ---particularly sewage treatment. This ability to attract urban rather than rural development has increased the value of land along the Evergreen strip significantly. It is our understanding that the Walmart site sold for almost $3.00 per square foot, an amount at least triple what rural land would fetch without the benefits of sewer and the immediately adjacent municipal services and a growing population base of over 12,000 consumers within the city it abuts. Without Kalispell's 12,000+ citizen taxpayers and its household income, the Evergreen strip would not be attracting retail giants. While strip property owners are enjoying significant property value appreciation, in part because of the availability of sewer, they are unhappy about paying only pennies per square foot to help pay the cost of maintaining municipal services which they, their employees and their customers benefit from. C. EPA Grant Issues Evergreen Sewage Collection System/City of Kalispell Sewage Treatment Plant Date: January 25, 1994 Page 8 Evergreen Annexation Staff Presentation Memorandum/City Council II. Background Chronology of Events October, 1988 City Council and the Evergreen Water Board begin discussion of the EPA grant for installation of the sewage collection system. There are three main points for negotiating - the hookup fee, monthly fees and who maintains the lines. City policy requires those outside of city hooking into the sewer line pay $500 each plus a 25 % monthly surcharge. With the number of hookups anticipated in Evergreen, it would cost nearly as much as building a separate treatment facility, but EPA siting criteria for a treatment plant dictates either using the existing plant in Kalispell or constructing a new one in the Fairmont -Egan area. December 7, 1988 In a letter to Mayor Kennedy, consulting engineer Dave Stahly suggests that Evergreen cannot afford the hookup fees. He does suggest the two share in "the debt retirement of the new re -worked city plant, the existing plant indebtedness, and the new outfall bonded indebtedness." He also suggested the two "share the operation and maintenance cost of the Kalispell treatment facility," the "City outfall lines used by the Evergreen effluent," and "Kalispell operate and maintain the Evergreen collection system including lift stations and pump station, for an agreeable fee." December 12, 1988 Public Works Director Ken Hammer raises several concerns on the design of the Evergreen system as to small diameter pressure lines v. large diameter conventional gravity system. While more funding is available for small diameter, the sewage is anaerobic and would cause treatment and smell problems at the sewer plant. He also recommends continuation of City policy of requiring waivers to annexation when utilities are extended and that the City handle billing and maintenance. May 4, 1989 Mayor Kennedy sends letter to Evergreen Water Board manager Steve Cheman with a proposal of conditions on method of setting the rate charged per gallon, the requirement to obtain waivers of protest to annexation from the entire RSID area, and a statement of intent the city would not pursue annexation for 10 years. Date: January 25, 1994 Page 9 Evergreen Annexation Staff Presentation Memorandum/City Council May 12, 1989 Steve Cheman writes to Mayor Kennedy stating "It is the intention of the Board of Directors, at this time, to convey to you our acceptance of this proposal as a planning document, with provision for negotiating the various concepts and details contained within the proposal." He suggests committees be formed to begin negotiations. August 15, 1989 EPA issues its Environmental Assessment for the Evergreen Grant. The report describes the severity of the failed and failing septic systems in the Evergreen area and the loading of Flathead Lake with those nutrients. It also identifies the conditions under which the City will accept the effluent from Evergreen, including "The Evergreen district will be required to obtain from each property owner prior to being connected to the system a `Waiver of Protest of the Annexation to the City of Kalispell and a Consent to Withdraw from the Rural Fire District. However the city will not pursue annexation for 10 years. August 15, 1989 Jack Fallon, Chairman of the Evergreen Water Board, sends City Attorney Neier a memo summarizing a phone conversation of August 3. The notes outline the procedures of annexation. Item #6 states, Signing a waiver to protest annexation eliminates the land owner and all future landowners from the right to protest in person or in writing at a hearing. October 4, 1989 Jack Fallon signs the EPA grant for $3,872,600. October 16, 1989 Jack Fallon sends letter to Mayor Kennedy requesting the interlocal agreement not include a waiver to protest annexation clause because the EPA requires everyone to hookup to the sewer in the service area. October 23, 1989 City Attorney Neier prepares memo to Mayor and Council discussing the annexation issue. The legal issues of requiring annexation as a condition of accepting Date: January 25, 1994 Page 10 Evergreen Annexation Staff Presentation Memorandum/City Council the Evergreen sewage are discussed in detail. Glen concludes the requirement to annex or sign waivers is complicated by the EPA grant and the RSID, and the decision is a political one of great importance to the City. (emphasis added) November 13, 1989 The City Council's Sewer and Water Committee meet with Scott Anderson of the State Water Quality Bureau, Jack Fallon, Bill Astle and others to discuss the EPA grant for Evergreen. Mr. Anderson discusses at length the EPA requirement for substantial hookup of users in the sewered district. Mr. Astle states the requirement for waiver of annexation prior to hookup is in violation of the grant. Mr. Anderson says that is a matter between Evergreen and the City of Kalispell. In the feasibility study conducted by Evergreen, the City's Water & Sewer Committee determined the most cost effective approach was to enter into an interlocal agreement to use the Kalispell plant. If Evergreen wants to do something different, they would have to submit a new plan to EPA. A motion was made by the City's Water and Sewer Committee to recommend to Council that the waiver of protest not be a condition of the interlocal agreement. The motion died on a 2 to 2 tie vote. No recommendation went forward to Council. November 15, 1989 City Attorney Neier memo to Council, he gives a legal opinion that it is Council's discretion whether to require the waiver of protest as a condition of providing sewer service. February 5, 1990 Evergreen Water Board sends out letter explaining the status of the EPA grant and the critical nature of getting Evergreen sewered. If Evergreen does not use Kalispell's plant, it will cost 227 % more per month in sewer fees for Evergreen to build their own treatment facility. A postcard is included to respond on willingness to sign waiver of protest to annexation. March 19, 1990 - Public Bearing and City Council Action on the motion discussed in detail during the introduction. To wit: "...THAT THE CITY OF KALISPELL ACCEPT THE SEWAGE FROM EVERGREEN BASED ON A 51% OR GREATER WAIVER OF Date - ,..January 25, 1994 Page 11 Evergreen Annexation Staff Presentation Memorandum/City Council 1 t l 10111 9 11 1 � 1 . '� 1� 1 • r r r April 4, 1990 The City's Sewer and Water Committee forwards recommendation to Council "That prior to entering into an interlocal cooperative agreement, for the treatment of waste water, with the City of Kalispell, the Evergreen Water & Sewer District must obtain from 51 % of the owners of property, including lien holders and contract sellers, and no less than 51 % of the property, a Consent to Annex Agreement and Notice of Withdrawal from the Rural Fire District on parcels of land abutting US. Highway No. 2 and Montana Highway No. 35 from the City limits east to those highways' intersection with (East) Cottonwood Drive. July 12, 1990 City and Evergreen Water District enter into a Memorandum of Agreement with four provisions: 1) 51 % of property owners within the described area must sign waivers of protest to annexation, 2) Creation of an RSID to fund Evergreen's share, 3) Attorney General approval of the agreement, and 4) Bond Counsel approval of the agreement. July 20. 1990 Newsletter of Evergreen Water Board concludes the only viable, cost effective and timely option is to utilize the Kalispell plant. This alone will save the users in the district $14.1 million immediately. July 25, 1990 Evergreen Water Board passes Resolution #72590 authorizing the execution of the Interlocal Agreement pursuant to the July 12 MOA. Date: January 25, 1994 Page 12 Evergreen Annexation Staff Presentation Memorandum/City Council July 25, 1990 City Council passes Resolution 3942 authorizing the execution of the Interlocal Agreement pursuant to the July 12 MOA. October 1, 1990 City of Kalispell form of government changes from mayor/council to council/manager form. October 2, 1990 City Attorney Neier memo acknowledges that a minimum of the 51 % waivers have been submitted and verified per Resolution #3942. October 11, 1990 City Manager Williams sends letter to Jack Fallon acknowledging compliance with the consent forms October 15, 1990 Attorney General approves the form of the Agreement. III. Characteristics of Proposed Area of Annexation A. Land - 94 properties totaling 11,433,593 sq.ft. (Approximately 262.5 acres) - 82 separate businesses - 12 single-family homes 1 multiple family dwelling 2 mobile home parks B. Taxation - Current 1. Real Property Date: January 25, 1994 Page 13 Evergreen Annexation , Staff Presentation Memorandum/City Council a. Market value $ 19,561,011.00 b. Taxable value 759,124.73 C. Tax 281,986.89 2. Personal Property a. Market value $1,889,788.00 b. Taxable value 181, 977.80 C. Tax 67,761.86 3. Total Current tax* $349,748.75 4. Current Contributions a. To Evergreen Fire $ 6,325.28 b. To Area Wide Planning 1,071.07 C. To Roads 13,922.14 C. Anticipated City Taxes/Assessments 1. Real Property $ 345,836.00 2. Personal Property $ 83,058.00 3. City Specials a. Streets $ 25,927.61 b. Storm $ 21,698.11 Total $ 476,519.72 Current Tax - Total* $ 349,748.75 Anticipated Tax - Total $ 476,519.72 Date: January 25, 1994 Page 14 A. Evergreen Annexation Staff Presentation Memorandum/City Council Net Increase or $.0108/sq. ft. D. Costs Of Extending Services (Particulars discussed in IV, below) 1 Full Time Police Officer 1 Full -Time Firefighter 1 Full -Time Maintenance Worker & Materials 3 FTE - Conrad Complex Management and Maintenance (self -funding through user fees, etc.) * Plus any applicable specials (hydrant district, refuse disposal, etc.) IV. EXTENSION OF SERVICES 126,770.97 $35,000.00 $35,000.00 $35,000.00 '. 1 111 11 As required by state law, the City will be preparing an extension of services plan for the area proposed to be annexed. Said plan will include maps which show present and proposed municipal boundaries, existing streets and utility locations, and general land use patterns. The plan will also address the city's plans for extending each major municipal service into the new area. Major municipal services include fire protection, police protection, public works services, and those services provided by the building, planning and parks and recreation departments of the city. Both a timetable and a method of financing services and/or improvements will be included in the extension of services plan. The following is a brief description of the services the City can offer. Police Protection The Kalispell Police Department (KPD) can serve the proposed area of annexation with the addition of one sworn officer to its staff. The same level of service and protection now provided to the citizens of Kalispell can be extended to the subject area. The existing highly visible patrol pattern can easily be modified to include the proposed area, without jeopardizing efficiency or effectiveness. Furthermore, the KPD can generally provide quicker response times than the Flathead County Sheriff's Department for service calls in this area. The sheriff's department, with limited manpower, is Date: January 25, 1994 Page 15 Evergreen Annexation Staff Presentation Memorandum/City Council charged with law enforcement duties county -wide; by having the commercial strip the responsibility of the KPD, the county can devote more attention to the rural areas of the county. B. Fire Protection The Kalispell Fire Department, located at Kalispell's City Hail, has 18 full-time firefighters and three chief officers. The department enjoys a fire insurance rating of "5", with all areas of the city equipped with hydrants. The department is equipped with adequate and up-to-date equipment and fire fighting apparatus. Fire protection is currently provided to areas within the city limits as far as 2.9 miles from the station, with response times of 6 to 8 minutes. Commercial areas, approximately 2.5 miles to the north and west, can be reached in 5 to 7 minutes. The proposed area of annexation includes properties located 2.9 miles from the Kalispell station (intersection of Highway 35 and Cottonwood Drive). Response times for firefighters and equipment to this area, although equal distance from the station, are better than those to the north end of Kalispell. The direct route from the fire station to Highway 2 (Idaho Street) and east to the Evergreen area account for the difference in response time. Additionally, there are no major intersections to contend with, or steep grades for the equipment to negotiate. Should the area be annexed, the Kalispell Fire Department can provide service at the same level as now enjoyed by the citizenry of Kalispell. The Fire Chief anticipates the need to add one full-time firefighter to the department when the annexation takes place. In addition to providing fire fighting service, the city can also provide fire inspection and prevention services to the proposed area of annexation. Given the commercial nature of the Evergreen strip, such services are not only appropriate, but also invaluable to the property owners in the affected area. Inclusion of this area within the jurisdiction of Kalispell's fire department will also facilitate coordinated building plan review between the city's fire department and building department. This coordination will help insure the new construction in this area meets all applicable fire codes. One service which is already provided to the subject area, at no cost to the taxpayers receiving the benefit, is the Kalispell Fire Department's ambulance service. This service will continue to be provided in areas outside the city limits, including Evergreen, whether the annexation occurs or not. Date: January 25, 1994 Page 16 Evergreen Annexation Staff Presentation Memorandum/City Council It is assumed that the annexation will have only limited adverse impact on the Evergreen Volunteer Fire District as the annexation will involve the detachment of 262 acres, or 1 % of the district's service area of approximately 24 square miles. The tax loss will amount to $6, 325.00, or 8 % of their levy of $76, 000.00 ( 1992 figure) . C. Parks Recreation and Public Land At this time, the Flathead County Parks Department manages and maintains the Conrad Complex - a multiple use sports complex which represents more than 40,000 visitor use hours per year. The complex is the only major softball facility in Northwest Montana and southern Canada, and for that reason plays host to not only local teams, but regional tournaments as well. Also utilizing the facility are a number of flag football, T-ball, and volleyball teams and leagues. Upon annexation, and under the management of the City's Parks Department, we believe that both the physical and fiscal well being of the complex would be enhanced. According to an analysis done by the city, the full potential of the complex could be realized through a commitment to management and promotion. Capital improvements foreseen include paving of the parking areas, underground irrigation, and a limited amount of new play equipment. Likely financing of these improvements would come through user fees and management techniques which maximize the use of the facility. Discussions between the city and county regarding the Conrad Complex are ongoing, with no apparent barriers to a transfer of management anticipated in the event the proposed annexation takes place. The complex property is owned by the Conrad Memorial Cemetery, and leased to the county through the year 2006. Renewal of the 20-year lease does not appear to be a problem. The county also maintains the landscaped highway medians and islands on Highway 2 through an agreement with the Montana Department of Transportation. MDOT has paid to the county $100,000.00 in trust to maintain these areas through the year 2006. Upon annexation, the county is agreeable to transferring both the responsibility and the remaining funds to the city with the consent of the state. The city's parks department would be responsible for the maintenance, with funding available through the above mentioned trust account. Date: January 25, 1994 Page 17 Evergreen Annexation Staff Presentation Memorandum/City Council D. Planning and Building The subject area is currently within the jurisdiction of the City of Kalispell's Building Department. Persons seeking building permits within the area being considered for annexation must at this time visit the City's Building Department to apply for a permit, then go to the county's health and planning offices for their respective authorizations, and then return again to the city's office to receive the actual permit. If the property were to be annexed, building permit issuance would be streamlined, with a single stop at the City's Building Department required. Through the building permit process, new development in the subject area will also have the benefit of plan review by the City's Site Development Review Committee. This review serves not only as a means of assuring code compliance, but promotes the general health and welfare of the community as a whole by encouraging attention to site planning, the natural environment, creative design, and the character of the neighborhood itself. When the area becomes part of the City, the City may exercise any and all of its statutory authority to encourage and stimulate both free enterprise and private redevelopment. Heretofore, the City could not consider any part of Evergreen in planning and implementing CDBG, Tax Increment, EPA, EDA, ISTEA or other programs. Even though sources of funding are cutting back when compared to previous years, the City has the ability to combine multiple funding sources to implement projects. E. Public Works The City has extended authority for Evergreen to treat its sewage at the Kalispell Wastewater Treatment Plant. Water and Sanitary Sewer are currently provided by. the Evergreen Sewer and Water District Storm water improvements are anticipated in the future. A capital improvements plan, including financing methods will be developed. Approximately 1.43 miles of roadway would be acquired in the annexation. Maintenance costs (snow plowing, sanding/de-icing, sweeping, patching and all related materials) are estimated at less than $10,000 annually. No new equipment purchases are required to serve the area. A single full-time employee will be needed in the public works department for maintenance. Date: January 25, 1994 Page 18 Evergreen Annexation Staff Presentation Memorandum/City Council Asphalt overlays on the acquired streets are forecast to be needed in the next 3 to 5 years. Identified roads to be acquired include: Flathead Dr./ Hwy 2 to Montclair Dr. 0.31 miles Montclair Dr./ Flathead Dr. to Whitefish River 0.40 River Road/ Hwy 2 to North Bndry of W. Cottonwood 0.07 W. Cottonwood Dr./ River Rd. to SW4SW4 4-28-21 0.13 E. Cottonwood Dr./ Hwy 2 to Hwy 35 0.44 Sager Lane/ 0.08 Generally, solid waste service cannot be provided by the city for five years following annexation per state law. V. Discussion of Benefits Annexation will contribute to the general welfare of the community by providing the logical extension of services supported by the users of those services. Annexation will broaden the tax base by growing in a direction that could only occur with annexation. Without annexation, the City is locked out of growing to the east. Kalispell, as the county seat, is the center of commerce and finance for northwest Montana. The population and purchasing power has enabled the growth of the businesses in Evergreen. The annexation will create a "level playing field" between those business in and out of the City. Annexation will provide the entire community with better maintenance of streets and storm drainage. The special assessments are specifically designed to help the citizens finance those maintenance costs. The development trends occurring on the strip are changing the character of the area. Those changes should include well planned public improvements as well as aesthetically pleasing building design and landscaping. It was the Kalispell Area Chamber, the Kalispell Development Corporation and the City of Kalispell that took the initiative to Date: January 25, 1994 Page 19 Evergreen Annexation Staff Presentation Memorandum/City Council request Walmart and ShopKo to develop a quality storefront design that will respect and improve the character of the area. Walmart has honored that request with a uniquely designed store. Hopefully ShopKo will also honor the community's request for good architecture. _ The strip is the east entry into the City of Kalispell, and the visual impression it creates is important to the economic development and health of our area. The City has proven leadership in advocating for quality development that improves our tax base, consolidates services, creates jobs, and stimulates a positive image. _ Over the past 2 years, the City has reduced the mill levy by 10.5 mills. This has been accomplished through efficiency in services, increased tax base and economic development activities. Pressures of growth are causing the City to expand its services in the most logical patterns. Annexation to the east is a logical step in providing the most cost effective delivery of services. These issues have been strongly identified in the Cooperative Planning Coalition's process for finding the Flathead Solution. Instead of spreading the growth further and further out, and driving the costs of services up, growth needs to be encouraged close -in to existing services. This will keep duplication of services to a minimum by providing the ability of in -fill development and the highest and best use of property. VI. DECISION MAKING PROCESS A. Resolution of Intention to Annex is passed by City Council. Property owners in the area to be embraced are notified. Notice is published in newspaper. 20 day comment period. B. Resolution of Annexation adopted by Council. C. Recommendation for zoning from planning board, following public hearing. D. Request from the State of Montana permission to annex right-of-way and other real property owned by the State. Date: January 25, 1994 Page 20