Weeklong Bloomington annexation trial: It’s a wrap, each side gets 45 days to submit final brief
Now over is the trial on the merits of Bloomington’s plan to annex two territories on the west and southwest sides of the city.
Around 3 p.m. on Friday, both sides rested their cases after five full days of witness testimony in the courtroom, located inside the justice center at College Avenue and 7th Street in downtown Bloomington.
This past week’s trial was just about the merits of annexing Area 1A and Area 1B into the city, and did not address a different, constitutional question for other territories, which relates to annexation waivers of remonstrance, which were signed by some land owners.
Over the course of the week, not every witness on either list—for the the city of Bloomington, or for the remonstrators—was called to the stand. Those who did testify included current and former elected officials, current and former city staff, the city’s paid consultants, as well as a dozen or more landowners in the areas to be annexed.
Nathan Nikirk, the special judge out of Lawrence County who is presiding over the case, gave the two sides 45 days to submit their proposed orders in the case, which will include their final arguments. No closing oral arguments were given on Friday.
Before leaving the courtroom on Friday, Nikirk thanked all of the attorneys for their professionalism. He noted that annexation is a “passionate issue.”
Nikirk said he does not know the “perfect answer” on the case but promised to do his “very best.” He would be giving the matter all the consideration that he could, Nikirk said. Even if some are not happy with his eventual decision, Nikirk said he hopes that they understand that he had given it a lot of time and effort.
A kind of “invitation” was made to Nikirk during opening arguments by the city’s outside legal counsel, Bose McKinney & Evans, that the judge drive through the areas to be annexed. On a couple of occasions during the trial Nikirk indicated that he would take up the invitation and would be driving through the areas.
So Nikirk will see for himself what he heard described by witnesses or was shown by lawyers in aerial photographs as a part of exhibits.
One impression that the city of Bloomington’s side is hoping that Nikirk will get is the similarity between the area that Bloomington wants to annex, and the area that is already inside the city limits.
The idea that the area to be annexed is already similar to the city of Bloomington was expressed during the pre-trial deposition of current Bloomington mayor Kerry Thomas when she said the land is already “behaving” as if it is part of the city of Bloomington.
Monroe County commissioners on the witness stand
During the cross examination of current Monroe County commissioner Julie Thomas, who appeared on Friday as a witness for the remonstrators, Bose McKinney attorney Stephen Unger showed Thomas a passage from the Monroe County Urbanizing Area Plan, and asked her to read it aloud:
Although the jurisdictional boundaries of the Urbanizing Area are very well defined in plans and policies, the perception on the ground is blurred or unnoticeable. For example, The Third Street Corridor west of the I-69 right-of-way is both in the Urbanizing Area and the City of Bloomington. To most residents and visitors, the City jurisdictional boundary line is imperceptible.
Thomas was put on the stand by William Beggs, with Bunger & Roberton, the legal counsel for remonstrators—in part to testify about the impact of annexation on county government. She described needing to “weather the storm” of reduced revenue that annexation would mean for county government.
For some drops in county government revenue, there would be a corresponding reduction in services that would have to be provided, Thomas said. For example, there would be less money to pay for sheriff’s deputies, but there would be less land area to patrol and fewer residents to serve. As another example, Thomas said there would be less motor vehicle highway funding, but there would be less miles of roadway to maintain.
However, Thomas pointed out that around $100,000 in stormwater fees would be lost, which is needed to fund projects like clearing of logjams, and maintaining culverts, which have already been planned out.
In her Friday testimony, Thomas said that concern about annexation among residents in Area 1A and Area 1B is so deep seated that she and county commissioner Penny Githens had put together a postcard mailer as a part of their re-election campaigns, targeting precincts that are a part of Bloomington’s planned annexation. Thomas put the cost of the mailing at around $5,000.
Githens also took the stand on Friday and talked about resident opposition to annexation, in connection with her re-election campaign. When she knocks on doors, she doesn’t need to start a conversation on annexation, Githens said. “They bring it up,” Githens said.
On the topic of the county’s rainy day fund balance, Githens said it was $7.7 million. In the context of reduced revenue to county government, due to the impact of annexation, Githens said she thinks that the rainy day fund number should be several million dollars higher.
Githens also testified about the additional financial challenge the county government faces because of plans to build a new jail, to respond to the conditions that caused the county government in 2009 to reach a settlement agreement with the American Civil Liberties Union after the ACLU filed a lawsuit.
Unger, the attorney who cross-examined Githens, tried to establish that the financial challenges presented by the construction of a new jail could be met at least in part by the local income tax (LIT) that was implemented countywide by a vote of the Bloomington city council in 2022.
Monroe County government has treated the additional roughly $11 million per year that the 2022 LIT has generated so far as a kind of reserve to be put towards construction of a new jail, even though the money can be spent more flexibly than that.
The point that Unger was looking to confirm with Githens was that Monroe County has more revenue now, through the enactment of the LIT, than it did when Bloomington’s city council approved the annexation ordinances.
Challenging Githens in her reelection campaign are IU law professor Jody Madeira, and former Bloomington city councilmember Steve Volan. Challenging Thomas is current county councilor Peter Iversen.
For Thomas, appearing in public candidate forums with Iversen could be analyzed as a dress rehearsal for her cross examination by Unger. Iversen has pointed to the denial by county commissioners of some requested rezones to support residential projects, in the context of a shortage of affordable housing.
Also in the context of a housing shortage, Unger asked Thomas about some of the same rezone requests that Iversen has brought up: Southern Meadows, a 190-home workforce housing neighborhood for which a requested rezone was denied by county commissioners in June 2021; and Clear Creek Urban, a rezone to support a proposal for a neighborhood cluster that included 31 new units of housing, which was denied by commissioners in May 2021.
About the Clear Creek Urban proposal, Thomas said at the time that she felt the density of the project was too great. Unger got confirmation from Thomas that she had also said at the time, “We are the county. We are not the city.”
Friday’s landowner testimony
Testifying on Friday as a landowner was Deborah Reed of Reed Quarries, Inc. The quarry itself, which is located on the northeast side of the intersection of I-69 and the SR 45/46 bypass, could serve as a counterpoint to the idea that the boundary between the city and the unincorporated part of the county is imperceptible.
But the focus of Reed’s testimony on Friday was to establish her concerns about the future survival of Reed Quarries as a business, if it were to be annexed into the city. She described how Indiana limestone is found in a three-county belt, covering Owen, Monroe, and Lawrence counties. In 1956 there were 67 quarries and mills in that three-county area, Reed said. That figure has dropped to 8, Reed said.
Reed told the Bose McKinney legal team that they didn’t “have a clue” what the impact of annexation would be on the Indiana limestone industry. She told them that the Bose McKinney website has a photograph of the Indiana state capitol building: “That’s Indiana limestone, right there,” Reed said. The law firm’s office is across from Monument Circle, Reed said: “That’s Indiana limestone.”
Bose McKinney attorney Andrew McNeil asked Reed if it was fair to say that what she was describing were her “fears” about what may happen. Reed said that it was not just her fear, but based on what had happened historically when an area is annexed into the city and businesses can’t withstand the additional taxes and permitting costs.
Another witness who testified on Friday as a landowner in an area to be annexed was Megan Parmenter. She is also a member of Bloomington’s utilities service board (USB). Parmenter is eligible to serve on the board, even though she’s not a city resident, because she’s a utilities rate payer—her home is connected to city of Bloomington utilities (CBU) water and sewer service. Parmenter was appointed to the USB by the city council.
Ryan Heeb, with Bunger & Robertson, who is representing landowners in the case, asked Parmenter about the CBU policy, adopted in August 2022, not to extend any additional sewer service outside the city boundaries, unless there is a valid petition for voluntary annexation in place.
Parmenter cast the sole vote of dissent on the new policy. She said it’s rare that there are ever any votes of dissent on the USB. Heeb asked her why she voted against the policy.
Parmenter said that she is opposed to the policy, because CBU operates on a cost-for-service model. Rate payers pay the actual cost of the service and the maintenance of the infrastructure. That means that by extending service outside the city limits, CBU is not agreeing to subsidize sewer service there. Parmenter noted that CBU customers outside the city limits pay a higher rate than inside the city.
On Monday, the first day of the trial, former CBU director Vic Kelson had testified about the reason for the higher rate for non-city CBU customers. It’s related to the fact that there are fewer rate payers in the areas outside the city, across whom to distribute the cost of pipe maintenance and lift station operation.
On Friday, Parmenter pointed to the fact that non-city customers currently pay a higher rate than city customers—as an argument against annexation. As soon as the customers who were previously outside the city are annexed, they will pay a lower rate, which will mean a revenue loss for CBU, even though the cost to provide the service will be the same. That’s a concern for her as the president of the USB, Parmenter said.
On Friday, much of the testimony from landowners was similar to that heard on Thursday. Much of the landowner testimony fit this general pattern: The value of services that the city will start providing will not be as much as the higher city taxes to be paid.
More than one landowner testified that they were happy with the trash collection service they received from a private waste hauler, at a cost slightly less that what they would pay to the city.
Several landowners testified that they were pleased with the police protection that they already receive from the Monroe County sheriff’s department.
Several landowners cited their use of fire pits as contributing to their quality of life in the unincorporated part of the county. Inside the city limits a fire pit requires a permit—unless it’s related to the preparation of food.
In 2019, during Bloomington city council deliberations about the unified development ordinance (UDO), then-councilmember Allison Chopra said she was alway mindful to keep a “morsel” of food nearby when tending a backyard fire, in order to to qualify for the exemption in city code.
Several landowners also testified that they generally did not want to live under the governmental control of the city, and that they preferred to live in a country setting as opposed to a city setting.
All the landowners testified that their taxes would increase, as a result of annexation.
Some of the legal considerations
When Nikirk sorts through the trial record, there are some previous Indiana court cases that could lead him to partly discount some of the landowner testimony.
It doesn’t appear to be enough for landowners to show that their taxes will increase. An Indiana court of appeals ruling, in a 2009 case involving the city of Muncie, cited in its reasoning an amicus letter that was submitted. The amicus letter points to the word “significant” in a sentence of the state’s annexation law that helps describe a potential demonstration by landowners that would help their cause: “The annexation will have a significant financial impact on the residents or owners of land.”
The amicus letter says that Indiana’s annexation law reflects the fact that the state legislature “understood and expected that all annexations would result in a new layer of municipal taxes, and therefore required the remonstrators to demonstrate that, given that inevitability, the particular annexation will impose something beyond the norm—something ‘significant’.”
Indiana’s Supreme Court concluded in a 2019 case involving the Town of Brownsburg that “remonstrators cannot oppose annexation merely because they do not want to live in the municipality or because they believe annexation will affect them adversely, such as by raising their taxes or altering their way of life.”
Allowing a one to two months for Nikirk to make a ruling, after each side’s proposed order is submitted, 45 days from Friday, the verdict on Bloomington’s annexation might be hoped for in mid-July or mid-August.
Previous B Square coverage of the annexation trial:
Friday: Final day of Bloomington annexation trial
Bloomington annexation trial a slog in first 2 days, judge warns he could require Saturday session
