Opinion ID: 853221
Heading Depth: 2
Heading Rank: 3

Heading: A Balanced Approach to Fiscal Plan Review

Text: Section 13 requires that a city's annexation plan show that the city will promptly provide the annexed territory with municipal services equivalent to those it already provides in similar areas of the existing city. Chidester II, 631 N.E.2d at 910. Specifically, at the time the City passed its annexation ordinance, it was also required to adopt a written fiscal plan showing: (1) The cost estimates of planned services to be furnished to the territory to be annexed. (2) The method or methods of financing the planned services. (3) The plan for the organization and extension of services. (4) That planned services of a noncapital nature, including police protection, fire protection, street and road maintenance, and other noncapital services normally provided within the corporate boundaries, will be provided to the annexed territory within one (1) year after the effective date of annexation, and that they will be provided in a manner equivalent in standard and scope to those noncapital services provided to areas within the corporate boundaries that have similar topography, patterns of land use, and population density. (5) That services of a capital improvement nature, including street construction, street lighting, sewer facilities, water facilities, and stormwater drainage facilities, will be provided to the annexed territory within three (3) years after the effective date of the annexation, in the same manner as those services are provided to areas within the corporate boundaries that have similar topography, patterns of land use, and population density, and in a manner consistent with federal, state, and local laws, procedures, and planning criteria. (6) The plan for hiring the employees of other governmental entities whose jobs will be eliminated by the proposed annexation, although the municipality is not required to hire any employees. Ind.Code Ann. § 36-4-3-13(d)(West Supp. 1992). It is undisputed that the City did adopt a written fiscal plan that covered all of these topics to some extent. Remonstrators argue that the trial court erred by allowing the City to amend and supplement that Plan at the hearing, to meet its burden of proving the Plan sufficient. (Appellants' Br. at 67-68.) The issue, then, is whether a fiscal plan is frozen as of the date of its adoption for purposes of evaluating its legal sufficiency. We answered this question in City of Hobart v. Chidester, 596 N.E.2d 1374 (Ind.1992)( Chidester I ), after remand, 631 N.E.2d 908. There, remonstrators argued that the City of Hobart's fiscal plan failed to set out all the information required under the statute. Id. at 1375. The City introduced evidence at trial addressing this deficiency. Id. We said: Remonstrators are correct in that the plan must be more than a mere recital of the statutory language. We do not think, however, that comparisons between the city's topography, patterns of land use, and population density and those of the annexed territory need be set out in the plan itself. Such comparisons would do little to advance the ability of landowners to enforce their rights to services under the plan.... The statutes do call upon the trial court to determine whether the city's written resolution and plan are according to statute, but they also tell the court to enter judgment on the question of the annexation according to the evidence which either party may introduce.  Ind.Code § 36-4-3-12(a)(2)(West Supp.1991).... There would be no need for an evidentiary hearing ... if all proof of a city's ability to provide like services had to be set out in the written plan. Id. at 1378 (emphasis added). Here, Judge Harcourt found that [t]he Fiscal Plan contained a number of errors. Some of which were quite obvious i.e. that the tax increase from 8.2465% to 14.3604% was a 6% increase [as opposed to a $6 increase]. (R. at 900.) Most significantly, the required capital improvement expense for water services should have been $78,500 rather than the $11,000 shown in the Plan. (R. at 906.) After taking into account the evidence at the hearing, however, Judge Harcourt found as fact that: The current building, policing, fire and medical, water, sewage, street lighting, street and road maintenance, street construction, parks, animal control, transit and administrative services currently provided to the citizens of New Castle in comparable areas will be provided to the citizens of the annexed areas in a manner that is equivalent ... in standard and scope. This includes both capital and non-capital services. All of the non-capital services will be supplied to the annexed territory within one year of the date of annexation and all capital expenditures will be within three years of the date of annexation. (R. at 911.) She went on to say: 19. The Court agrees that the municipality, bearing the burden of proof, may present matters outside the Fiscal Plan during the trial of the case. The municipality is not required to include every detail in the plan which may be presented at trial. 20. However, at some point new evidence presented at trial would constitute a complete reworking of the plan. Such reworking of the plan would create undue hardship upon remonstrators. . . . . 34. The Court ... identified three purposes for written fiscal plans in Ho[]bart v. Chidester: [10] First, the publication of the written plan permits landowners to make an intelligent decision as to whether or not to accept annexation or remonstrate. Second, requiring a written plan makes the opportunity for remonstrance and judicial review more realistic. As a practical ma[tt]er, more than vague promises are needed for a Court to test a city's ability to provide like services to the annexed territory. Third, a fiscal plan needs to be in writing to protect the rights of the landowners to institute proceedings to force the annexing city to provide the services pro[mis]ed under the plan. Hobart at 1377-78. 35. In the present case, the Fiscal Plan certainly allowed the remonstrators to determine whether or not to remonstrate. They chose to remonstrate. 36. The written plan also allowed for a complete judicial review. 37. The Fiscal Plan quite clearly stated what services were to be provided to the areas being annexed. 38. The Fiscal Plan contained some errors. Some of the errors [were] obvious, such as the percentage of increase of taxes and could easily be identified by the lay public as well as the Court. Other errors involved an increase of funds needed, such as sewage costs. These increases were clearly identified. 39. The Plan's errors were corrected by amendment or at trial. At trial, the Plan still served as the basis for review. 40. The third purpose served by a plan is protection for landowners in the future. The Plan in this case, along with the extensive testimony and exhibits produced at trial certainly provides the landowners in the Annex Areas 1, 2, 3, 4 East and 4 West with a concrete statement of the city's promise to provide certain services to them. . . . . 43. The Court concludes that the city has met its burden with regard to provision of services to annexed areas, both capital and non-capital in a manner which is equivalent as that provided to the comparable areas. The city has carried its burden as to the cost of services to annexed areas and method of financing the services. . . . . 48. Therefore, the Court concludes that the Fiscal Plan as supplemented at trial is not so seriously defective as to thwart the purposes announced under Hobart v. Chidester. 49. The central issue remains as to whether or not the evidence offered at trial in 1995 and 1996 essentially rewrote the Fiscal Plan to the point that substantial unfairness resulted to the remonstrators. . . . . 52. This case presents serious, strong competing public policies. On one hand, is the need for municipalities to grow in a regulated, planned fashion. On the other hand, individual landowners need to be fully informed of proposed annexation actions. These interests must always be carefully balanced. . . . . 55. The function of the Court in the annexation process is quite limited. Annexation is primarily a legislative decision. Nevertheless, the judiciary is charged with ensuring that the minimum requirements for annexation, as prescribed by the General Assembly have been satisfied. Town of Sellersburg v. Proposed Annexation of Certain Property, 677 N.E.2d 608, 612 (Ind.App. 1997); Chidester v. City of Hobart, 631 N.E.2d 908, 910 (Ind.1994). 56. It appears to the Court that this case presents a close question. . . . . 58. The city made a number of errors in its Fiscal Plan and the Plan preparation could be termed sloppy. 59. Plaintiffs' expert witness testified that errors may be expected for Fiscal Plans. . . . . 61.... [A]t the end of the trial in this case, the remonstrators had complete information as to the city's plans for provision of services to the annexed areas. 62. The Court concludes that the errors are not fatal to the Fiscal Plan or to the annexation process as a whole. The City's supplementation of the Plan at trial did not unduly prejudice Plaintiffs. The city has borne its burden of proving it met the minimum requirements set forth by the Indiana General Assembly. (R. at 915-22.) We quote these findings and conclusions at length because Judge Harcourt followed the appropriate path. Her analysis correctly focused on the purposes for requiring fiscal plans and measured the City's Plan against those purposes. She allowed the City reasonable leeway in updating the Plan within the bounds of fairness to the Remonstrators. At the end of the day, Judge Harcourt concluded that although the Plan was imperfect it was legally sufficient to protect the annexed landowners' future rights. This conclusion is supported by sufficient facts, and it is a correct application of the law.