Spokane Journal of Business

City’s push to annex undeterred

Residents on strip of land in Linwood area may see annexation ballot this fall

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City of Spokane officials say they arent going to let an adverse Washington state Supreme Court ruling stop the citys aggressive new annexation strategy.

Late last year, Mayor John Powers proposed a city strategy to pursue the annexation of hundreds of acres of unincorporated lands adjacent to the city, including on the West Plains, on the North Side, in the Yardley area, and in the Moran Prairie and Glenrose area.

A key to that strategy, which is to be executed over a number of years, was the use of covenants signed by residents in unincorporated areas who had agreed not to oppose future annexation in exchange for the right to hook up to city sewer and water lines. For decades, cities like Spokane had extended their borders by using the petition form of annexation, which requires that owners of 75 percent of the assessed valuation of the property to be annexed sign petitions or covenants saying they support, or at least wont oppose, annexation.

That all changed in mid-March, when the state Supreme Court ruled that the petition form of annexation is unconstitutional because it gives property owners, especially owners of high-value properties, more power than other residents.

The city already is working to modify its strategy based on that ruling, and expects by fall to pursue an annexation, says Dave Mandyke, deputy director of the citys public works and utilities department. Still, he says, the ruling will certainly make things interesting.

It has changed our strategy, but it hasnt dashed our hopes for annexation, Mandyke says.

The Supreme Court ruling, he says, leaves cities with only two other means of annexation. The first and most common requires that cities get the majority of registered voters in a proposed annexation area to approve the annexation in an election. The other alternative applies only to cases in which at least 80 percent of the proposed annexation area is bordered by the city that wishes to annex it. In those cases, the annexation can be accomplished by a vote of the City Council, though residents in the area could force a referendum to reverse the decision if they choose.

Since the Supreme Court issued its ruling, the city of Spokane has been studying maps of the areas it has targeted for annexation, and has merged into those maps data indicating where registered voters reside. With the knowledge of how many voters live in each target area, it now is formulating plans to try place on the September or November ballot the first of what might be several annexation elections, Mandyke says.

Its first target will be a strip of land resembling a backwards L situated along Francis Avenue and Division Street on the North Side in what the city considers to be part of the Linwood area. The strip extends as far north as the Costco Wholesale Corp. store at 7619 N. Division, which is attractive to the city for its sales-tax revenue. The strip also includes a mix of commercial and some residential properties farther south on Division and west along Francis. Mandyke says the assessed value of that land is about $78 million. That area could change substantially, though, before a proposed annexation plan reaches voters this fall, he says.

When it does reach the ballot, a relatively small number of people will vote on it. Mandyke says that since the land is largely commercial in nature, preliminary estimates indicate there are fewer than 150 registered voters in that area.

That presents a new wrinkle in the annexation process. While the state Supreme Court ruled that annexation by petition gave too much power to certain property ownerspresumably those who own high-valuation lands but dont live therethe election form of annexation appears to shift that power solely to people who live within the area proposed to be annexed, whether they own land or not. That means absentee owners of big commercial properties such as the Costco site would have no vote in such an election, Mandyke says.

That aspect becomes even more pronounced in the Yardley area, the district just east of the city limits that became so controversial after both the city of Spokane and proponents of a proposed new city in the Spokane Valley both made clear they wanted itand its lucrative tax revenues. The area, which is home to another Costco as well as to two big home-improvement stores, could be part of a new Valley city if voters there approve an incorporation plan next month. If Valley voters reject that plan, the city of Spokane still could pursue theYardley annexation later.

The piece of Yardley that the city of Spokane has been interested in has an assessed value of about $140 millionand important sales-tax revenuebut only about 50 voters, which means that in an annexation election the city would need just over half that many voters to add that property to its borders.

Similarly, the city is looking at a chunk of land on the West Plains with a current valuation of about $73 million and about 250 registered voters, Mandyke says.

Perhaps the most unusual situation is an annexation target on the South Hill where a ShopKo Stores Inc. outlet is located. That area has no registered voters at all, raising the question of how an election form of annexation could work in that instance. City staff dont know the answer to that question yet, he says.

Conceivably, he says, the city could find just one nearby resident living contiguous to the ShopKo property who favored annexation, include that individuals house in the annexation proposal, and hold an election with one voter.

Meanwhile, Mandyke says, its very likely that the states annexation statute will be changed during the next legislative session in response to the Supreme Court ruling. Its not going to stay the way it is, he predicts, adding that some of the best municipal legal minds will be studying how to revive the petition form of annexation and still meet the Supreme Courts concerns about its structure.

Until that happens, the city of Spokane plans to pursue annexations with the methods currently available to it, he says. Whether thats going to be easier than under the petition form isnt clear, Mandyke says. Certainly if a city had covenant petitions signed representing 75 percent of the assessed land value, it would have been easier to go that route, but he adds that cities shouldnt avoid asking voters if they want city services.

If you cant sell your product, then you should get in another business, he says. Were certainly positive that we can prevail.

Still requiring covenants

Despite the court ruling, the city of Spokane continues to require that residents outside the city who want to hook up to city sewer and water sign covenants that require them not to oppose future annexation.

Mandyke says city officials believe the court had no problem with the covenants themselves, but rather with the underlying requirement that the petition form of annexation, which uses such covenants, required only that owners of 75 percent of the assessed valuation agree to the annexation.

He says he believes that the petition form of annexation will be modified and reinstated by the next Legislature, and that the city will be ready with a stack of signed covenants when it does.

Right now, its business as usual, Mandyke says.

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