Annexation: Rules are uncertain - State Supreme Court's decision has cities, developers in limbo with the Growth Management Act

This area immediately south of Mount Vernon along Interstate 5 will one day be annexed into the city. The land is considered a prime location for business development, and the taxes businesses bring help reduce the burden on property owners. But the most commonly used method to annex land into cities has been ruled unconstitutional. The Legislature will be asked to consider new annexation laws in this session. -Frank Varga / Skagit Valley Herald

By BEVERLY CRICHFIELD
Skagit Valley Herald

1/20/03

Olympia, WA - A state Supreme Court ruling last year has left cities that are required to carve out land for future expansion without a knife.

The court determined that the most commonly used method of annexation, getting approval from owners of a majority of property in an area, was unconstitutional.

The court's ruling has forced cities, including Anacortes, Burlington, Mount Vernon and Sedro-Woolley, to put the brakes on annexation plans.

Developers find they're losing money waiting for the cities to annex their properties and bring city services, including sewer, water and streets.

"This ruling has had a severe impact on our industry," said Wayne Crider, executive officer of the Skagit and Island Counties Builders Association. "The petition method worked for years, and had not been a real problem. Now we're having to deal with the unintended consequences of the court's decision."

Questions have surfaced

The court ruling has created new questions. What happens with land that was annexed before the March 2002 decision? Will that land still belong to the cities? How can the cities annex land with no one living on it? Will cities have to spend thousands of dollars on an election for a handful of voters? What if residents don't vote?

"Since the decision, we've had a number of cities hold elections, sometimes with no more than one voter," said Dave Williams, a land-use environmental lobbyist for the Association of Washington Cities. "To be eligible to vote, there's a 30-day residency requirement. We've had a developer move a trailer into one area and live there for 30 days trying to become a resident."

A reprieve from the confusion may be in the works. The state Supreme Court has agreed to reconsider its decision on March 25 -- a move that's considered usual for the court.

Meanwhile, city officials, developers and builders are lobbying the Legislature to change the laws and help development move forward.

Court ruled method was unfair

The state Growth Management Act has required cities and counties to designate areas for long-term growth. Once those areas are set aside, cities are required to bring urban levels of service, including water, sewer and streets, into the area within six years of annexation.

Since 1945, most cities have used the petition method. This involved determining the value of property to be annexed, and getting approval of owners holding 60 percent of the property values in the area.

In a case involving Yakima and Moses Lake, the state Supreme Court last March said cities couldn't use the petition method. The court ruled that the petition method gives one person who owns 60 percent of the property value in an area the unfair right to approve annexation against the wishes of his or her neighbors.

Mount Vernon plans affected

The court's decision may have hit Mount Vernon the hardest of all Skagit County cities.

For Mount Vernon, the court ruling came in the midst of a heated annexation proposal for an area south of the city limits where city officials hope to develop commercial and industrial businesses. Those businesses pay higher taxes that, in turn, pay for a greater share of city services and relieve pressure on homeowners.

Most of the property in Mount Vernon's southern urban growth area is owned by people who live elsewhere. The area has pockets of residential development.

The city had been counting on the petition method to annex the area. To secure annexation, the city had required property owners who wanted to expand their businesses to sign an agreement that they wouldn't protest annexation.

Owners doubt method

Property owners in the area have balked at the city's proposal to annex the land. About 40 business owners and residents formed the Cedardale Property Owners Association and hired local land-use lawyer Tom Moser to represent them in opposing the city's plans.

Property owners who do not like the no-protest agreements believe the state Supreme Court ruling rendered those agreements invalid. City officials disagree.

"The city is proceeding on the assumption that some method of the petition method of annexation will be around sometime this year," said Scott Thomas, Mount Vernon city attorney. "We think the no-protest agreements are still valid."

City officials contend that Mount Vernon's policies allow some development to move forward in the urban growth areas. Other cities, including Anacortes and Burlington, refuse to extend city services until an area is annexed.

Other cities are impacted

Several proposed annexations in Anacortes have been halted, said Ian Munce, Anacortes planning director.

Burlington has run out land to annex and hasn't been hampered much by the court's decision, said Margaret Fleek, Burlington planning director.

The City of Sedro-Woolley has suffered through some changes in its own development policy for its urban growth areas, partly as a result of the court ruling.

Sedro-Woolley had allowed small developments to use septic tanks and avoid sewers while allowing some developers outside of the city limits to hook up to sewers.

Now that has been reversed, according to Pat Hayden, Sedro-Woolley city attorney. Developers inside the city have to hook up to sewers, while those outside the city cannot connect until annexed.

"To get sewer and develop, these people are going to have to annex," Hayden said.

New laws are being sought

The Legislature is expected to discuss either changing the laws to allow some form of the petition method of annexation, or propose an amendment to the state's constitution.

Lobbyist Williams of the Association of Washington Cities said the association wants the Legislature to reaffirm the boundaries of cities to make sure that annexations that have taken place before March 2002 are still valid.

In addition, cities want a way to annex property that has no one living on it, he said.

The association is proposing that the Legislature adopt a petition method that would require the signatures of half the registered voters and half of the property owners who own the most property in an area before annexation could move forward.

"Let's get some of these basic things addressed by the state Legislature early in the session so that people can move into the building season with confidence," Williams said.

No easy solution - Legislators say there's no quick and easy fix.

Much of the discussion will revolve around whether to change state laws to accommodate annexation needs, or whether to amend the constitution, said Rep. Jeff Morris of Anacortes.

Changing the state's laws would take less time and would move annexations along faster, he said.

A constitutional amendment would require a two-thirds vote of the Legislature, then approval by a majority of voters. That would be more difficult and take more time to enact, Morris said.

However, because the state Supreme Court has decided the petition method is unconstitutional, the Legislature might be wiser to change the constitution. Merely changing the law could be overturned again by the court, Morris said.

"This has become a huge issue for cities," Morris concluded. "They're in limbo with the Growth Management Act. They have to annex these areas, but the court has taken away their toolbox by which they can do this."

Beverly Crichfield can be reached at 360-416-2132 or by e-mail at bcrichfield@skagitvalleyherald.com.