Bloomington preps for annexation restart on May 19, will assume remonstrance waivers voided by state legislature are valid

At a work session held on Friday, Bloomington’s city council got a briefing from mayor John Hamilton’s administration on the restart of an annexation process that was launched in 2017.

Image links to high resolution .pdf file.

The process was stopped that year when the state legislature enacted a law that was found by Indiana’s Supreme Court in late 2020 to be unconstitutional. That cleared the way for Bloomington’s renewed annexation effort.

Friday’s work session provided a couple of newsy bits.

First, based on the work session discussion, Bloomington will be proceeding with the process on the assumption that some remonstrance waivers are still valid, even though they were declared void by a state law enacted by the state legislature in 2019.

The new 2019 law says that a few different categories of annexation waivers are not valid, which means that more property owners would be eligible to remonstrate against a proposed annexation.

At the work session, Bloomington’s corporation counsel Philippa Guthrie said about the remonstrance waivers voided by the state legislature: “They were contracts signed by individuals with the city, in exchange for getting the sewer service. That’s why we provided the service. So we’re proceeding as if they are valid.”

Guthrie confirmed to The Square Beacon, “Yes, we believe all of our waivers are valid.” On Friday, Guthrie did not have a figure for the number of waivers that are involved.

Opposition to annexation can be grounded in part on the higher property taxes that city residents pay, compared to non-city residents. The standard counter to that objection is to point to additional services that the city will deliver.

Another bit of news from the work session is that when members of the city administration talk about picking up now where they left off in 2017 with the annexation process, they mean exactly that.

On April 28, when Bloomington’s mayor John Hamilton announced the restart to the annexation process, he described it as resuming “from the point it was illegally interrupted.”

Based on the city council’s work session, the correct interpretation of the phrase is literal. The city will be starting with the same eight annexation ordinances—one per area—that were introduced four years ago. They are recognizable as vintage 2017 from the first two numerals in their official titles: Ord 17-09, Ord 17-10, Ord 17-11, Ord 17-12, Ord 17-13, Ord 17-14, Ord 17-15, and Ord 17-17.

Bloomington’s corporation counsel Philippa Guthrie confirmed to The Square Beacon that one of the first steps will be for the city council to amend the already-introduced annexation ordinances to make technical changes. Among other things, the effective date for the annexation needs to be changed—from 2020 to 2024.

The timeframe for this year’s annexation process has already slipped a bit, after it was initially announced that the city council would receive a presentation of the statutorily required fiscal plans on May 12.

Now the city plans to upload the information to the city’s website in the week of May 10. The city council is supposed to receive a presentation on the updated fiscal plan on May 19.

Bloomington is looking to hold public hearings on July 21, with a vote on the ordinances to be taken by the city council at a meeting in September.

The eight different areas that are being considered for annexation would add 9,255 acres to Bloomington’s land area and an estimated 14,377 people to the city’s population.

For the 2021 round of the annexation process, the change to the state law on annexation remonstrance waivers is one legal difference that could affect how the process unfolds. Another legal difference is a change to the state law about fire protection services in the context of annexation.

Elements that will stay the same include more than just the ordinances that were already introduced in 2017. Also remaining the same will be the legal requirements for the fiscal plans associated with each area to be annexed, even if the contents of those plans will need to be updated.

Different: Status of annexation waivers

In 2019, the state legislature passed a law that voids remonstrance waivers in several circumstances. Such waivers have been attached to deeds in the past as a condition of providing utility service by the city. [IC-36-4-3-11.7] The new 2019 law means that more property owners would be eligible to remonstrate against a proposed annexation.

For example, remonstrance waivers executed before July 1, 2003 are just void. More recent remonstrance waivers, executed after June 30, 2003, and before July 1, 2019 are subject to certain conditions. If the waiver was not recorded with the county, it is void. More recent remonstrance waivers are void unless they are recorded with the county record in a timely way.

How does remonstrance factor into the annexation process? If 65 percent of the affected landowners, or if owners of 80 percent of the assessed property value in the proposed annexation area, sign a remonstrance petition, then the annexation is automatically stopped, for review by a court. [IC 36-4-3-11.3]

If more than 50 percent but less than 65 percent of affected landowners remonstrate, an appeal to the circuit court can be made. The court is required to order the annexation to go forward, if certain objective conditions are met—and if the city is able to show that the annexation is in the best interest of the owners of land in the territory to be annexed.  Among the conditions listed out in the statute is that the population density in a proposed annexation area is at least three people per acre. [IC 6-4-3-13]

That means if the proposed annexation of one of the areas winds up in court, Bloomington could meet the objective statutory conditions by showing that the population density of the area to be annexed is more than 3 people per acre.

That’s a sufficient, but not a necessary condition among the objective criteria. Other sufficient conditions are if 60  percent of the territory is subdivided, or if the territory is zoned for commercial, business, or industrial uses. In addition to the objective criteria, some subjective criteria would need to be met.

The other, more subjective criteria include whether the annexation would have a “significant financial impact” on property owners and whether the annexation would be in the “best interests of the owners of land in the territory.”

In the case of Bloomington’s proposed annexation, of eight different areas, only three of the areas could satisfy the objective conditions by meeting the population density threshold. It’s the three “island” areas that have a high enough density to hit the needed threshold.

Based on acreage and population given in the city’s current FAQ on the topic, here’s the density breakdown.

Area People Acres People/Acre
Area 1a (South-West A) 3,987 3,232 1.23
Area 1b (South-West B) 4,566 1,755 2.60
Area 1c (South-West C) 79 47 1.68
Area 2 (South-East) 3,888 2,890 1.35
Area 3 (North Island) 366 110 3.33
Area 4 (Central Island) 420 93 4.52
Area 5 (South Island) 956 232 4.12
Area 7 (North) 115 896 0.12

It’s the three “islands” or “donut areas” that many people see as the most natural places to consider for annexation—they’re already surrounded by land that has already been incorporated into the city of Bloomington.

When he spoke to The Square Beacon on Friday, Monroe County council president Eric Spoonmore said he thinks the so-called “donut areas,” which are all in his county council district, “make a lot of sense” for annexation.

Spoonmore said he knows that could make his constituents who live in those areas unhappy, if they’re opposed to being annexed. He added, “Those are so clearly within the urbanized boundaries of the city that those areas would make sense … to explore.”

Spoonmore put the annexation of the donut areas in the context of an incremental approach, which he favors. It’s not that he is opposed to annexation on principle, he told The Square Beacon. “I’ve said publicly, I will say it again. I am not philosophically opposed to annexation,” he said.

“[Annexation] shouldn’t be a really wide-scale thing that happens all at once,” Spoonmore said. “A long-term approach, over the course of, eight, nine, 10 years—if I were in the city council’s shoes, that’s probably how I would be looking at it.”

The value in an incremental approach is that it gives all the other governmental units the ability to plan ahead and prepare a little bit better, Spoonmore said. An incremental approach helps good coordination, good collaboration, and good intergovernmental relations, he said.  The county council does not have a formal role to play in the annexation process.

At the Friday city council work session, Bloomington’s corporation counsel Philippa Guthria hit the standard city talking point to counter an incremental approach: The last annexations by Bloomington were in 2004, which means no land area has been added to the city in more than a decade and a half.

Different: Status of fire protection

Another law passed in 2019 has the effect of leaving an annexed area as a part of a fire protection district, even after annexation. The fire protection district has to continue to provide fire protection services to the annexed area. [IC-36-4-3-7]

The preservation of the fire district levy and service area was a factor in recent discussions that have led to several townships to join the Monroe Fire Protection District.

As described in the city’s FAQ on annexation, the new law prohibits cities like Bloomington from providing fire services to annexed areas that are part of a fire district.

When they are released, the city’s fiscal plans for the annexed areas are expected to include a breakdown of two different scenarios, with and without fire protection provided by Bloomington.

Different: Cook Group

Another difference between the 2017 and 2021 annexation proposal is a carveout for the land owned by Cook Group. The company signed a payment-in-lieu agreement, approved by the city council, under which its land would not be annexed into the city for a period of five years.

The agreement has its origins in Cook’s opposition to annexation in 2017. News outlets at the time attributed the state legislature’s action to halt Bloomington’s annexation effort that year in part to Cook’s influence on legislators.

Same: Required elements of fiscal plans

Consistent from 2017 to 2021 are the statutory requirements for the elements of a fiscal plan for an area to be annexed. [IC 36-4-3-13]  They include:

  • The cost estimates of planned services to be furnished to the territory to be annexed.
  • The method or methods of financing the planned services.
  • The plan for the organization and extension of services.
  • The plan for providing services of a non-capital nature in the annexed territory, including police protection, fire protection, street and road maintenance, and other noncapital services normally provided within the corporate boundaries, within one year after the effective date of annexation.
  • The plan for providing services of a capital improvement nature in the annexed territory, including street construction, street lighting, sewer facilities, water facilities, and stormwater drainage facilities, within three years after the effective date of the annexation.
  • The estimated effect of the proposed annexation on taxpayers in each of the political subdivisions to which the proposed annexation applies
  • The estimated effect the proposed annexation will have on municipal finances.
  • Any estimated effects on political subdivisions in the county that are not part of the annexation and on taxpayers located in those political subdivisions.

In 2017, it was Reedy Financial Group that prepared the fiscal plan for the annexation proposal.

Based on the city’s online financial records Bloomington has paid Reedy $43,363 so far this year for consulting on annexation. Since July 2016, Bloomington has paid Reedy a total of $435,758 for consultation on annexation.

Table: Amounts paid by Bloomington to Reedy Financial Group for annexation consulting [Bloomington online finances]

Date Amount
2021-04-16 $31,288
2021-03-19 $12,074
2017-05-17 $8,791
2017-05-05 $56,898
2017-04-07 $54,306
2017-02-24 $55,253
2017-02-10 $52,468
2017-02-10 $53,786
2016-12-02 $51,184
2016-11-04 $23,760
2016-10-07 $8,572
2016-09-09 $7,307
2016-07-29 $16,028
2016-07-15 $4,042
Total $435,758