Title: City of Olathe v. City of Spring Hill
Citation: N/A
Docket Number: 124156
State: Kansas
Issuer: Kansas Supreme Court
Date: July 1, 2022

1 
 
 
IN THE SUPREME COURT OF THE STATE OF KANSAS 
 
No. 124,156 
 
CITY OF OLATHE,  
Appellant/Cross-appellee, 
 
v. 
 
CITY OF SPRING HILL and JAMES HENDERSHOT, City Administrator, City of Spring Hill 
Appellees/Cross-appellants. 
 
 
SYLLABUS BY THE COURT 
 
1. 
An elected governing body may not use its legislative power to constrain future 
governing bodies to follow its governmental, or legislative, policy decisions. 
 
2. 
An elected governing body may use its administrative or proprietary authority to 
enter into enforceable contracts to pay a specified sum over a specified time. 
 
3. 
The development, introduction, or improvement of services are, by and large, 
considered governmental, but the routine maintenance of the resulting services is 
generally deemed proprietary. 
 
Appeal from Johnson District Court; RHONDA K. MASON, judge. Opinion filed July 1, 2022. 
Affirmed; temporary stay of judgment lifted. 
 
 
 
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Anthony F. Rupp, of Foulston Siefkin LLP, of Overland Park, argued the cause, and Matthew D. 
Stromberg and Sarah E. Stula, of the same firm, and Christopher M. Grunewald and Ronald R. Shaver, of 
City of Olathe, were with him on the briefs for appellant/cross-appellee. 
 
Curtis L. Tideman, of Lathrop GPM LLP, of Overland Park, argued the cause and was on the 
briefs for appellees/cross-appellants. 
 
Greg L. Musil and Brett C. Randol, of Rouse, Frets, White, Goss, Gentile, Rhodes PC, of 
Leawood, was on the brief for amicus curiae Bonita Station Investments, LLC. 
 
The opinion of the court was delivered by 
 
ROSEN, J.:  This is a tale of two cities. On March 23, 2006, the cities of Spring Hill 
and Olathe entered into a written agreement (Agreement) to restrict their future growth 
by establishing boundaries for annexing land lying adjacent to the two cities. Olathe 
agreed not to seek annexation of property south of the boundary line, while Spring Hill 
agreed not to seek to annex property north of the line. Each city reserved the right to 
annex land within their respective boundary lines. The cities cited several goals they 
hoped to achieve through the Agreement, including: 
 
• Avoiding annexation and zoning disputes that could lead to illogical or 
premature annexations and unwanted development; 
• Avoiding duplication of planning and provision of extraterritorial services; 
and 
• Providing property owners clear indication of future city plans for 
annexation, provision of services, and comprehensive development. 
 
 
 
3 
 
 
The Agreement had no fixed expiration term. Instead, it was to "remain in effect 
until terminated," and termination could "occur only upon mutual consent of the parties." 
 
In addition to the agreement with Spring Hill, Olathe entered into similar 
agreements in 1983 with Lenexa, in 1988 with Gardner, in 1989 with Gardner and 
DeSoto, and in 2005 with Overland Park. 
  
On March 10, 2021, Olathe filed a petition in district court requesting declaratory 
judgment, a temporary restraining order, and preliminary and permanent injunctive relief. 
The petition alleged that on March 1, 2021, Spring Hill notified Olathe of its intent to 
annex land north of the boundary line. Spring Hill stated its plan was to pursue a 
commercial site development known as Project Extract. The Spring Hill Planning 
Commission discussed Project Extract at a public meeting on March 4, 2021. The narrow 
objective of the project was to annex land for development by a private enterprise, 
Carvana, that had already contracted with a property owner to purchase land on the 
Olathe side of the boundary for commercial development. The annexation project was set 
on the Spring Hill City Council agenda for March 11.  
 
The petition further alleged that Olathe had recently instituted a comprehensive 
development plan designating residential and employment areas and planning for traffic 
flow and provision of services in a planned expansion that included land subject to the 
Agreement. Olathe asserted various harms that would result from Project Extract, 
including redesigning Olathe's development plans, undermining the future provision of 
services to the land lying within Olathe's Agreement boundaries, promoting uncertainty 
to both landowners and city planners, and opening Johnson County up to chaotic land 
grabs by municipalities seeking to protect their future growth options from their 
neighboring municipalities.  
 
 
4 
 
 
 
On that same day, March 10, the district court conducted a hearing on the motion 
for temporary restraining order and application for preliminary injunction. After hearing 
arguments from the parties, the court took the matter under advisement. On March 11, the 
district court granted a temporary restraining order pending an evidentiary hearing. The 
order restrained Spring Hill from annexing the disputed property or from undertaking 
actions in preparation for annexation. On May 19, the district court conducted an 
evidentiary hearing on Olathe's injunction request at which several witnesses testified. 
 
On June 14, the district court entered judgment holding the Agreement 
unenforceable as a governmental action that could not bind subsequent City Councils. 
The court denied the request for injunctive relief. Hours later, the Spring Hill City 
Council adopted an ordinance to annex the land designated as Project Extract. The district 
court subsequently entered final judgment, referring back to the June 14 decision, and 
held the petition failed to state a cause of action upon which relief could be granted. The 
court then dismissed the suit.  
 
Olathe and Spring Hill filed timely notices of appeal and cross-appeal and 
docketed their respective appeals with the Court of Appeals. While the appeal was 
pending, the district court entered an order staying its judgment pending appeal. The 
order enjoined the parties from pursuing land annexations beyond the boundary line set 
out in the Agreement. Then, on August 19, Spring Hill filed a motion with the appellate 
courts to stay, modify, or vacate the district court's stay pending appeal. On September 2, 
the Court of Appeals denied the motion, and, in the alternative, issued its own stay and 
injunction during the pendency of this appeal. On September 23, this court granted 
Olathe's motion to transfer the case to the Supreme Court.  
 
 
 
5 
 
 
Discussion 
 
The enforceability of municipal contracts and their legal effect may be determined 
de novo by the appellate courts regardless of the construction by the trial court. See 
Jayhawk Racing Properties, LLC v. City of Topeka, 313 Kan. 149, 153-54, 484 P.3d 250 
(2021). 
 
At the core of this appeal, and governing our decision, is a longstanding common 
law rule that an elected governing body may not use its legislative power to constrain 
future governing bodies to follow general policy decisions. This is a rule that extends 
across the various jurisdictions in this country and has long been recognized in Kansas. 
 
As early as 1872, this court has held that "in deciding what past laws shall stand, 
and what be repealed, each legislature is free and absolute. . . . 'One legislature cannot 
abridge the powers of a succeeding legislature." Gilleland v. Schuyler, 9 Kan. 569, 580, 
1872 WL 660 (1872). As recently as 2021, this court reiterated this principle in holding 
that "[o]ne [C]ity [C]ouncil may not bind a subsequent one to its political decisions 
involving the exercise of government functions." Jayhawk Racing, 313 Kan. 149, Syl. ¶ 
6. 
 
As this court has explained, in the context of federal constitutional law, "the 
Contract Clause does not require a state to adhere to a contract that surrenders an 
essential attribute of its sovereignty," such as contracts that limit a state's power to act in 
the future. Partners v. U.S.D. No. 214, 284 Kan. 397, Syl. ¶ 3, 403, 160 P.3d 830 (2007). 
 
In Edwards County Comm'rs v. Simmons, 159 Kan. 41, Syl. ¶ 6, 151 P.2d 960 
(1944), this court held: 
 
 
6 
 
 
 
 
"In determining the question of validity of a contract made by a board or other 
governmental agency extending beyond the official term of the contracting board or 
officials, one test generally applied is whether the contract is an attempt to bind 
successors in matters incident to such successors' administration and responsibilities, or 
whether it is a commitment of a sort reasonably necessary for protection of the public 
property, interests or affairs being administered. In the former case the contract is 
generally held to be invalid and in the latter case valid."  
 
The Simmons court held that a municipal legislative body lacks the authority to 
make "'a contract longer than [its] life'" when "'no necessity exist[s].'" 159 Kan. at 53 
(quoting Fisk v. Board of Managers, 134 Kan. 394, 398, 5 P.2d 799 [1931]). 
 
The essence of this rule lies in the fundamental philosophy of American 
democracy. Within the constraints of constitutionally protected rights, it is the will of the 
electorate that determines policy decisions. If an elected governing body is allowed to 
bind future bodies to a particular course of action, the effect is to silence the will of voters 
in the future. The Commonwealth Court of Pennsylvania explained the doctrine that an 
elected entity may not enter into contracts the duration of which extends beyond the 
terms for which the members of the entity were elected: 
 
"[T]he doctrine here at issue has its roots in our fundamental notions of democratic 
government. We select public officials, legislative or executive, whom [sic] we believe 
will carry out the policies intended by the electorate. If they fail to do so, or if the people 
conclude that new policies are in order, they can be voted out of office. To allow an 
elected body to perpetuate its policies beyond its term of office would frustrate the ability 
of the citizenry to exercise its will at the ballot box." Lobolito, Inc. v. N. Pocono Sch. 
Dist., 722 A.2d 249, 252 (Pa. Commw. Ct. 1998), aff'd in part, rev'd in part 562 Pa. 380, 
755 A.2d 1287 (2000). 
 
 
7 
 
 
 
To hold otherwise would invite elected governing bodies to make their policies 
permanent, defeating the ability of future voters to set their own courses, leading to 
archaic legislation, stagnation, and an inability to respond to changed circumstances. 
 
The Pennsylvania Supreme Court set out this reasoning in this way: 
 
"The obvious purpose of the rule [that a legislative body cannot take action that 
will bind its successors in the performance of governmental functions] is to permit a 
newly appointed governmental body to function freely on behalf of the public and in 
response to the governmental power or body politic by which it was appointed or elected, 
unhampered by the policies of the predecessors who have since been replaced by the 
appointing or electing power. To permit the outgoing body to 'hamstring' its successors 
by imposing upon them a policy—implementing and to some extent, policymaking 
machinery, which is not attuned to the new body or its policies, would be to most 
effectively circumvent the rule." Mitchell v. Chester Housing Auth., 389 Pa. 314, 324-25, 
132 A.2d 873 (1957). 
 
As we explained in Jayhawk Racing, certain kinds of government obligations may 
be binding on the bodies that enter into them. So-called "administrative" or "proprietary" 
obligations may be enforced against a governing body. "Governmental" or "legislative" 
agreements, on the other hand, are not binding on subsequent elected bodies. 313 Kan. at 
152-53, 156-57. 
 
At times, differentiating between the governmental and administrative functions 
can be challenging for parties and courts. This is not such a situation. 
 
 
 
8 
 
 
A contract to pay a specified sum over a specified period of time is an example of 
an administrative or proprietary function. Jayhawk Racing, 313 Kan. at 156-57. In a 
general sense, governmental or legislative powers relate to affairs of political jurisdiction 
and promoting the public welfare at large. Such powers involve policymaking, and such a 
function cannot be contracted away:  one legislative body cannot bind its successor to its 
policy commitments. 313 Kan. at 153. 
 
In McAlister v. City of Fairway, 289 Kan. 391, 403-04, 212 P.3d 184 (2009), this 
court provided four guidelines for determining whether an action by a governing body is 
governmental or proprietary, and the district court in this case relied on those guidelines 
to conclude that the Agreement between Olathe and Spring Hill was governmental in 
nature. We agree with the district court's conclusion, but we deem it unnecessary to break 
the analysis down into the McAlister steps. 
 
The development, introduction, or improvement of services are, by and large, 
considered governmental, but the routine maintenance of the resulting services is 
generally deemed proprietary. Jayhawk Racing, 313 Kan. at 158. 
 
The Agreement in the present case clearly relates to the former category. At most, 
it addresses the development, introduction, or improvement of services, and it reflects 
quintessential policy considerations. As a governmental function, it cannot be considered 
a contract with a binding effect on future elected councils. 
 
Cases from other jurisdictions support the conclusion that annexation and 
community development are policy decisions that cannot bind future elected leaders. See, 
e.g., City of Leeds v. Town of Moody, 294 Ala. 496, 319 So. 2d 242 (1975) (agreement 
purporting to bind city to relinquish its police jurisdiction over any territory in county 
 
 
9 
 
 
outside its corporate limits and to refrain from accepting any petitions in future for 
annexation of land in that county was void); City of Centerville v. City of Warner Robins, 
270 Ga. 183, 188-89, 508 S.E.2d 161 (1998) (Carley, J., dissenting) ("The annexation 
power is strictly legislative. [Citation omitted.] Thus, an agreement between two 
municipalities for each to refrain from accepting annexation petitions without the consent 
of the other is null and void."); CHW-Lattas Creek, LP by GP Alice Lattas Creek, LLC v. 
City of Alice, 565 S.W.3d 779, 786-87 (Tex. App. 2018) ("[W]e conclude community 
development . . . is a governmental function" and "the purpose of the Development 
Agreement was to promote economic development [so] the City was engaged in a 
governmental function when it entered into the Development Agreement."); Pitzer v. City 
of Abilene, 323 S.W.2d 623, 626 (Tex. Civ. App. 1959) ("The annexation of territory by a 
municipality is the exercise of a governmental power. As a general rule the governing 
body of a municipal corporation may not by contract bind successors in office in the 
exercise of a purely governmental power."); Town of Brockway v. City of Black River 
Falls, 285 Wis. 2d 708, 726, 702 N.W.2d 418 (2005) (in determining validity of 
agreement relating to annexation, rationale for principle that a municipality may not 
contract away its governmental powers is that municipality is wholly creature of 
legislatively delegated power and therefore cannot by ordinance or contract bargain away 
that portion of the state's sovereignty). 
 
In addition, we observe that the Agreement in the present case bears no hallmarks 
of being a contract for the provision of services or to carry out any particular undertaking 
with respect to either the property-owners in the unincorporated land or the other party to 
the Agreement. The Agreement did not call for either party to provide any particular 
services or even to annex the land in question. If neither party were to take any action at 
all with respect to that land, no party could claim a breach of contract. Olathe cannot 
argue that the Agreement governs the provision of essential services because the 
 
 
10 
 
 
Agreement does not establish who would provide services, what those services would be, 
when those services would be provided, or even if those services would be provided.  
 
The Agreement is simply a promise not to do something for an indeterminate 
length of time. It is very different from an agreement to provide "routine maintenance" of 
services, an administrative function. See Jayhawk Racing, 313 Kan. at 158. It instead 
relates to "the development, introduction, or improvement of services," a governmental 
function. 313 Kan. at 158. We therefore conclude that the Agreement is an unenforceable 
attempt to bind future City Councils to a governmental policy decision. 
 
This conclusion governs the result in this case. The Agreement is not binding.  
 
Olathe argues that two statutory provisions authorize municipalities to enter into 
agreements such as the present one:  K.S.A. 2021 Supp. 12-2908, concerning municipal 
contracts to perform governmental services, activities, or undertakings; and K.S.A. 12-
101, enabling the home-rule amendment to the Kansas Constitution. 
 
Assuming—without deciding—that K.S.A. 2021 Supp. 12-2908 authorizes 
agreements relating to annexations, such as this one, we nevertheless conclude that the 
statute does not overrule or undermine the democratic principle that an elected governing 
body may not bind its successors to policy decisions.  
 
K.S.A. 2021 Supp. 12-2908(b) states: 
 
"Any municipality may contract with any municipality to perform any 
governmental service, activity or undertaking which each contracting municipality is 
authorized by law to perform. The contract shall be authorized by the governing body of 
 
 
11 
 
 
the municipality and shall state the purpose of the contract and the powers and duties of 
the parties thereunder." 
 
The statute explicitly states the contract must be authorized by law. A contract that 
is of open-ended duration that seeks to restrain the policy decisions of future municipal 
governments is, as we have just observed, not authorized by law. Nothing in the statutory 
language suggests the Legislature intended to provide a mechanism to undermine the 
authority of elected municipal governments to select their own policy options. 
 
We find Olathe's reliance on home-rule powers similarly unavailing. K.S.A. 12-
101 provides that a city may "[m]ake all contracts and do all other acts in relation to the 
property and concerns of the city necessary to the exercise of its corporate or 
administrative powers." Olathe contends this statute authorizes open-ended contracts that 
may remain in force long after the voters have elected new officials to their city 
governments. 
 
Such a conclusion would have the effect of fatally undermining the very essence 
of home-rule. It would take away from elected municipal governments the ability to make 
decisions and act according to the will of the voters if prior governments had committed 
them to policy courses.  
 
As a hypothetical example, let us suppose that an anti-growth City Council passed 
a resolution stating that the city would never expand its borders beyond its then existing 
city limits. A couple of years later, a new City Council sees a benefit to the city resulting 
from annexation of adjacent property. Under Olathe's home-rule argument, a member of 
the earlier council could successfully bring suit to enforce the resolution using a home-
rule theory of authority. After all, the resolution would neatly fit the home-rule statutory 
 
 
12 
 
 
language allowing municipalities to "do all other acts in relation to the property and 
concerns of the city necessary to the exercise of its corporate or administrative powers." 
But such an outcome would invite all elected governing bodies to make their policies 
permanent, and it would defeat the ability of future voters to set their own courses. 
 
As was the case with K.S.A. 2021 Supp. 12-2908, we see nothing in K.S.A. 12-
101 abrogating the rule that a City Council cannot bind a future City Council to its policy 
decisions.  
 
Finally, Olathe argues that Simmons, 159 Kan. at 41, supports enforcement of the 
contract. We consider this to be a misreading of the case. As we noted earlier, Simmons is 
one more case among many holding that contracts are not valid when the terms of the 
contracts extend beyond the terms of the contracting officials. 159 Kan. 41, Syl. ¶ 6. As 
with other authorities, Simmons states that maintaining and protecting public property and 
affairs may require longer-term contracts, but only when "reasonably necessary." 159 
Kan. 41, Syl. ¶ 6. 
 
Olathe demonstrates no reasonable necessity in enforcing the Agreement. In fact, 
the Agreement involves property over which Olathe has no authority:  the land to be 
"protected" lies outside its city limits. It is possible that Olathe intended to annex that 
land someday, but it is also possible that Olathe would never annex that land. Either way, 
the Agreement does not compel Olathe to do anything in particular to protect the public 
property, interests, or affairs of that land. If Olathe were to have annexed the land, it 
would presumably have to provide services to that land, whether the Agreement existed 
or not. The Agreement was not necessary for the provision of services to that land. 
Simmons does not support Olathe's position. 
 
 
 
13 
 
 
Spring Hill also argues by way of a cross-appeal that the Agreement is invalid 
because the parties did not obtain approval from the Attorney General as set out in K.S.A. 
2021 Supp. 12-2904(g). Spring Hill contends that K.S.A. 2021 Supp. 12-2904 is the 
relevant statute governing interlocal agreements, not K.S.A. 2021 Supp. 12-2908. 
Because we find the Agreement to be unenforceable as an improper attempt to set out 
policy decisions for future City Councils, we do not decide at this time whether the 
Legislature intended to enact statutory provisions overlapping in their scope and 
inconsistent in their requirements.  
 
The decision of the district court is affirmed. Olathe is not entitled to injunctive 
relief, and the stay on the district court decision is lifted.