Legislation in the Tennessee General Assembly, which has already passed in the state House of Representatives, would bring major changes to how Cleveland and other municipalities across the state annex land from their surrounding county.
House Bill 590 and Senate Bill 869 would require a referendum for the approval of the majority of qualified voters in a proposed annexation area desired by the municipality.
Currently, if the land in question is within the city’s Urban Growth Boundary, it can be annexed by giving proper public notice, holding a public hearing and allowing 30 days for public appeal and notification to the county mayor. County residents can also request annexation.
If the Senate passes the bill without further amendments, municipalities wanting to annex will be required to mail notices to residents in the effected area 90 days before the referendum.
Currently, cities are required to give seven days notice prior to a public hearing on annexation.
Registered voters in the effected area, whether homeowners or renters, would have the opportunity to vote in the referendum.
City Planner Corey Divel said the bill diminishes the part that the urban growth boundary would play in annexation.
“Right now you can annex if you aren’t in the urban growth boundary, but it’s only by referendum. I don’t know what the point of Urban Growth Boundary would be anymore other than a planning tool … for infrastructure,” Divel said.
Municipalities’ ability to annex without a referendum was limited to within the city’s Urban Growth Boundary in 1998.
“Everyone had to adopt an urban growth plan and designate everything as urban growth boundary, which are areas that a reasonable person would expect to be the location of high intensity residential, commercial or industrial growth,” Divel said.
Since then the local plan has only been updated once. Divel said state law specifies how the plan could be updated.
In March 2013, members of the Ocoee Region Builders Association expressed concern that Cleveland and other municipalities were "fast tracking" their annexation plans to have the process complete before a bill from the legislator changed the process.
Divel said there were 10 areas being considered for annexation when the state imposed the one-year moratorium on annexation of any residential property to give the Tennessee Advisory Commission on Intergovernmental Affairs time to study the issue.
The moratorium was passed in May 2013.
Industrial sites could still be annexed as well as residential annexation at the request of a property owner during this time.
Divel said annexation requests from residents are not always practical because of how roads are laid out in reference to the city line.
“It’s also handicapping the city, because they want to be in and we want to provide, say sewer [for instance], then it’s difficult for the city to get to it [because of where the lines are in relation to the area that wants to be annexed],” Divel said.
He said there are several state laws governing what areas municipalities can currently annex.
“A lot of people just see it and say, ‘Oh, its just a money grab,’ but it’s actually beneficial,” Divel said.
Divel said being annexed in Cleveland can actually save residents money in fire tax, garbage pick–up rates as well as water costs.
Other benefits include sewer, street lights and roadside brush pick up.
The bill will have an impact on how the City Council operates, Divel said.
“It will be difficult to grow, or maybe grow efficiently,” Divel said.
He said annexing any group that can get the majority of residents to vote favorably on annexation could cause a complication of services, including 911 dispatches.
The bill does not limit a municipality’s power to annex industrial or commercial property that is within the urban growth boundary.
If passed, the bill could have an effect on residential developers.
“The city has an ordinance that to use sewer you have to be in the city. So if you are a developer and you are sitting on a piece of land, you have a loan on it, you need to start create revenue on it. If you have to wait six months for an election, it can make it difficult on them as well. There are a lot of nuances,” Divel said.
A report was released by TACIR in January of this year. HB 590 had already been filed prior to the report being released.
The report states, “Tennessee is one of a dwindling number of states where cities have broad authority to annex without consent ... The main argument for unilateral (i.e., nonconsensual) annexation is that cities need that authority in order to facilitate economic development and prevent disorganized growth. The main argument against it is that people should have a choice in whether they are taken into cities."
In the House, James Van Huss sponsored the bill. Local representatives Kevin Brooks and Eric Watson were among the bills many co-sponsors.
“Although this Hamilton County bill has statewide application, the voters of Tennessee are very clear in telling legislators that they want us to protect them,” Brooks said. “We heard overwhelmingly from voters that this is what they wanted.”
He said annexation has not caused major issues in Bradley County, but it has been a topic of concern on other areas.
He said the bill “allows us to step back and look at annexation.”
Brooks said under the bill property owners would still be able to request annexation by a municipality.
A fiscal note for the bill states, “The referendum is to be held in conjunction with the next regularly-scheduled election; therefore, any additional cost associated with the referendum to local government will be not significant.”
In Bradley County, odd numbered years usually do not have any regularly scheduled elections.
According to Bradley County Election Commission administrator of elections Fran Green, if a special election were required for annexation referendums it would cost $45,000.
Local governments would also incur increased costs because notices are required to be mailed to those living in the area for proposed annexation via registered mail. The fiscal review committees report states this would cost approximately $11.20 per mailing.
“Due to several unknown variables, such as the number of municipalities that will desire to annex territory, the extent of property desired to be annexed, the value of any such properties, the extent of subsequent development that would occur on any annexed property, and whether majority vote was to accept annexation, the fiscal impact to local government revenue cannot be determined,” the fiscal note states.
The bill was passed by the House on Feb. 24 and received by the Senate on Feb. 27. The Senate has taken no further action.