In late June, the N.C. Supreme Court issued a significant new ruling that clarifies the requirements for annexation under North Carolina law. In doing so, the high court overturned a decision last year by the N.C. Court of Appeals that made it easier for municipalities to annex “non-urban” areas.
“Involuntary annexation is by its nature a harsh exercise of governmental power affecting private property and so is properly restrained and balanced by legislative policy and mandated standards and procedure” Chief Justice I. Beverly Lake, Jr. wrote for the high court. “Annexation is initiated upon the decision of a municipal governing board to extend the municipal corporate limits, and upon challenge by a property owner, the extent and implementation of this decision must comply with legislative intent.”
North Carolina law generally holds that areas intensively used for “urban purposes” — residential, commercial, industrial, institutional, and governmental uses — should be within a municipality. A city or town can annex such areas without the consent of those to be annexed as long as it follows the procedures set out in state law.
Areas that aren’t used for these urban purposes can be involuntarily annexed only under much narrower circumstances. For towns with a population over 5,000, these requirements are set forth in N.C. General Statue § 160A-48(d):
“In addition to areas developed for urban purposes, a governing board may include in the area to be annexed any area which does not meet the requirements of subsection (c) if such area either:
(1) Lies between the municipal boundary and an area developed for urban purposes so that the area developed for urban purposes is either not adjacent to the municipal boundary or cannot be served by the municipality without extending services and/or water and/or sewer lines through such sparsely developed area; or
(2) Is adjacent, on at least sixty percent (60%) of its external boundary, to any combination of the municipal boundary and the boundary of an area or areas developed for urban purposes as defined in subsection (c).”
The case at bar involves a dispute between Asheville and Carolina Power & Light Company over the legality of an 2001 annexation of about 1,500 acres in the Long Shoals area. Among the properties involuntary annexed was a CP&L power plant.
In its annexation plan, Asheville classified 288.2 acres as not developed for urban purposes. These properties were separated into five noncontiguous tracts referred to as non-urban areas 1 through 5. Non-urban areas 1 and 4 are not adjacent to the city’s existing borders.
CP&L broadly challenged the propriety of the annexation before the courts. The Superior Court upheld the annexation, including the propriety of annexing non-urban areas that do not touch the city’s current borders. The Court of Appeals agreed, though in a 2-1 ruling by a three-judge panel.
“[T]he plain language of the statute includes all possible combinations which make the following equation work: the amount of border which the non-urban area shares with the municipality combined with the amount of border [which] the non-urban area shares with an area or areas developed for urban purposes equals sixty percent of the border of the non-urban area,” wrote Judge Eric Levinson for the Court of Appeals’ majority. “One workable combination exists where a non-urban area touches, on at least sixty percent of its external border, only an area or areas developed for urban purposes.”
Judge John Tyson, however, dissented from this majority ruling. “No case law supports the majority’s interpretation of this statute,” he noted. “All prior cases clearly show that in order for a municipality to annex non-urban land, that land must adjoin sixty percent of its external boundary to ‘any combination’ of the municipal boundary and the boundary of land developed for urban purposes. Either boundary standing alone is insufficient.”
A unanimous Supreme Court agreed with Judge Tyson’s reasoning. “Because the plain meaning of N.C.G.S. § 160A-48(d)(2) states that there must be a ‘combination’ of adjacency to the municipality and adjacency to areas developed for urban purposes, the proposed annexation as to Non-Urban Areas 1 and 4 is invalid,” Lake wrote for the court.
The case is Carolina Power & Light Co vs. City of Asheville. The Supreme Court decision is available online.
The Supreme Court decision comes as annexation continues to be a controversial topic across the state. Only days after making its ruling, both the Court of Appeals and Supreme Court faced another annexation-related case.
Fayetteville was planning to annex 27 square miles and 42,000 people effective July 1. Opponents to the large-scale annexation — Fayetteville’s population was estimated to be just under 124,000 as of July 2002 — challenged it in court, contending the city failed to full the requirements set out in state law.
On June 29, the Court of Appeals issued a stay, effectively putting the annexation, on hold while it examined the challenges. Finding them without merit, the appeals court lifted its stay July 7, allowing the annexation to take effect. Annexation opponents then appealed to the N.C. Supreme Court. On July 12, the high court, in an unprecedented move, issued a stay, putting the annexation back on hold five days after it had seeming gone into effect.
The Supreme Court’s stay surprised many residents and left them scrambling to obtain services that the city was to provide with annexation. Garbage disposal, in particular, proved problematic. Residents in areas to be annexed had cancelled their trash collection contracts in expectation of city garbage service. With the stay, they either had to haul their waste to one of two county collection sites or hire a private hauler for an unknown period time.
Michael Lowrey is associate editor of Carolina Journal.