Carolina Journal News Reports
CHARLOTTE — In December, a specially appointed Joint Legislative Commission on Municipal Annexation began conducting hearings about possible changes to North Carolina’s annexation laws. The issue is almost certain to come up again in the General Assembly in 2009.
Last year, the House passed a moratorium on involuntary annexation. The Senate did not act on the measure.
While the Assembly has resisted reforming annexation laws, state courts frequently hear cases of property owners fighting annexation. The state’s appellate courts most recently ruled in an annexation case in October, when the N.C. Court of Appeals overturned a lower-court ruling that had prohibited the village of Sugar Mountain from involuntarily annexing a number of properties. The appeals court ruling shows exactly how low a bar North Carolina sets for annexations.
Under state law, municipalities can involuntarily annex adjoining property if they follow proper procedure and a sufficiently large percentage of properties of the land to be taken in qualifies as residential, commercial, industrial, institutional, or governmental. Consent of those to be annexed is not required. N.C. law does require that services be extended in a nondiscriminatory basis to newly annexed residents.
In 2006, the N.C. Supreme Court issued a ruling that had the potential to limit annexations. In Nolan v. Village of Marvin, the high court held that state public policy prohibited an involuntary annexation by the Union County municipality.
Legislation the Assembly adopted in 1959 allowing involuntary annexation stated:
“That municipalities are created to provide the governmental services essential for sound urban development and for the protection of health, safety and welfare in areas being intensively used for residential, commercial, industrial, institutional and government purposes or in areas undergoing such development.”
The legislation, codified as N.C.G.S. § 160A-35(3), listed nine types of services that an annexation report must address: police protection, fire protection, streetlights, solid-waste removal, street maintenance, administrative services, water and sewer services, animal control, and parks and recreation.
Marvin sought to annex 324 lots on 468 acres. The only services it provided were administrative. The village employed a part-time village administrator, village clerk, and tax collector and contracted for planning and engineering services, an auditor, and an attorney. Marvin’s reason for the proposed annexation was clear enough: It estimated it would cost $14,240 to provide these ‘services’ to the area it wanted to annex. By contrast, the village would collect an estimated additional $80,395 in property taxes.
The Supreme Court ruled that these administrative services were inadequate to allow for annexation.
“We agree that services must be provided on a (qualitative) nondiscriminatory basis; however, we also conclude that N.C.G.S. § 160A-35(3) is grounded in a legislative expectation that the annexing municipality possesses meaningful (quantitative) services to extend to the annexed property,” Justice George Wainwright wrote for the Supreme Court.
The Supreme Court did not define what level or types of services were required to qualify as “meaningful.”
What are meaningful services?
If the Supreme Court ruling in Village of Marvin held that municipalities must provide some level of actual services to annex, subsequent rulings by the state’s second highest court, the N.C. Court of Appeals, established a low barrier as to what constitutes “meaningful.”
The latest such case involves a number of local landowners fighting a proposal by Sugar Mountain, which has a year-round population of less than 250, to annex their land. The landowners contended, among other things, that the village wouldn’t provide them with meaningful services. Sugar Mountain contends its extension of police protection, waste collection services, use of recreational facilities, and street maintenance to the annexed areas would indeed be meaningful.
After a Superior Court judge ruled in favor of the landowners, the village brought the case before the Court of Appeals.
“After careful review, we conclude that the record demonstrates that respondent substantially complied with the essential statutory provisions in annexing petitioners’ property and that petitioners failed to produce competent evidence demonstrating that respondent failed to meet the statutory requirement,” Judge Robert Hunter wrote in ruling for the village.
Hunter rejected the argument that the landowners wouldn’t really being provided with useful services by Sugar Mountain and the municipality would spend little if any additional money to provide them. The quality of the service the municipality would provide was, in the appeals court‘s judgment irrelevant, as long as it was providing services.
“As such, we do not believe that Village of Marvin establishes that our review as to whether the extension of municipal services is meaningful should center on the quality of services provided; rather, the qualitative analysis is grounded in nondiscrimination, and our inquiry into what types of services are provided is quantitative, not qualitative,” Hunter wrote.
“In the instant case, the annexation ordinance would extend the same police protection, waste collection services, and recreation department facilities that are now provided within the Village. Both police protection and waste collection services are specifically listed as core municipal services by statute,” he wrote.
Hunter also noted that the Court of Appeals pre- Village of Marvin rulings did not require annexing municipalities to add additional police officers or equipment when extending police protection to annexed areas.
N.C. Court of Appeals rulings are controlling interpretations of state law unless over-ruled by the N.C. Supreme Court. Because the ruling by the three-judge panel was unanimous, the high court is not required to hear the case should the property owners further appeal. The case is Norwood v. Village of Sugar Mountain (07-1402) and is available online here.
Michael Lowrey is an associate editor of Carolina Journal.