NCLM Annual Conference Annexation Reform Legislation

1. NCLM Annual ConferenceAnnexation Reform Legislation Frayda S. Bluestein October 24, 2011

2. Statutory Procedures Prior to Reform • Four statutory methods: • Voluntary contiguous (100% petition required) • Voluntary satellite (100% petition required) • Involuntary by cities under 5,000 (urbanization standards/service requirements) • Involuntary by cities 5,000 or more (urbanization standards/service requirements) • Legislative annexation/deannexation by local act (no standards or requirements apply)

3. Annexation ReformS.L. 2011-396 (H 845) • Eliminates separate standards for small towns • Invalidates annexation if rejected by petition of owners of 60% of property in the area to be annexed • Requires cities to extend water and sewer to annexed property within 3.5 years • Requires annexation if petition by owners of 75% of property in high poverty areas • Allows annexation if petition by residents of 2/3 of households in high poverty areas

4. Not Changed • Standards for urbanization – standards for large cities now apply to all • Legislative annexation/deannexation always possible: • Separate legislation allows rejection of approved annexations. • S.L. 2011-173 (S 27), S.L. 2011-177(H 56): Kinston, Lexington, Rocky Mount, Wilmington, Asheville, Marvin, Southport, Fayetteville, Goldsboro

5. Denial By Petition • Annexation is denied if petitions from owners of 60% of the property in the affected area • Multiple owners; majority must sign • Guarantees notice early in the process • County tax assessor prepares list based on tax listings • Board of Election mails preprinted petitions and certifies results • City bears the cost

6. Water and Sewer • If the city provides or contracts to provide services, must allow property owners to request service to their property • Must provide notice of right to request service • Must extend to all properties who request it at no cost other than user fee • Must complete construction within 3.5 years of annexation effective date • Property owners who choose to receive services later may be charged based on graduated schedule set out in statute

7. Exemption for Farms • Land used for farm purposes (broadly defined) may not be annexed without the owner’s written consent • S.L. 2011-363 (HB 168) • Eliminates prior provisions regarding annexation of present use value property. • If consent is obtained, property is considered to be in the city for all purposes.

8. Annexation by Petition • City must annex if petition from owners of 75% of property in high poverty area • High poverty: 51% of households have incomes 200% or less than the current federal poverty threshold • Area must have 1/8 contiguity; may not exceed 10% of existing population • Must provide water and sewer to annexed area • Obligation may be relieved if cost of providing services exceeds capacity as defined in the statute • City may annex upon petition of 2/3 of residents in high poverty (“distressed”) area

9. Petition Process • What communication is allowed during the petition process? • Getting Your Message Across: What Can Public Officials Say In Support of Pending Policies or Proposals?

10. Legislative Summaries • SOG’s Legislative Summaries website: www.sog.unc.edu/dailybulletin/summaries11 • Materials include bulletins, blog entries, teaching materials, etc.

11. H845 • Must extend water and sewer “to the house” • Water and sewer within 3½ years • Can’t annex farm land • Must annex high poverty areas on 75% owner petition • 60% petition veto $ $ So What $