Opinion ID: 852536
Heading Depth: 2
Heading Rank: 1

Heading: The Amended Annexation Satisfied the Statute

Text: We now review the trial court's findings and conclusions as they bear on Carmel's amended annexation ordinance and revised fiscal plan. Annexation is subject to judicial review only so far as the General Assembly has authorized it by statute, and [t]he larger object of the annexation statute is, as it has always been, to permit annexation of adjacent urban territory. Rogers, 688 N.E.2d at 1242. Our review of the trial court's special findings is limited to reviewing the sufficiency of the evidence for issues of fact, and then looking to the record for evidence favorable to judgment. Bradley, 764 N.E.2d at 216. We do not set aside findings or judgments unless they are clearly erroneous, but we review questions of law de novo. Id.
When a remonstrance is certified, the trial court must conduct a hearing and determine whether the annexation may go forward according to the evidence that either party may introduce. Ind.Code Ann. § 36-4-3-12(a). The municipality bears the burden of showing that it has complied with the statutory conditions for annexation. Bradley, 764 N.E.2d at 216. Indiana Code § 36-4-3-13 lists the prerequisites for annexation. If the municipality meets the requirements of subsections 13(b) or 13(c) and subsection 13(d), the court must order the annexation to proceed. Even if those findings are favorable to the municipality, however, the remonstrators can still prevail if they establish grounds listed in subsection 13(e). Ind.Code Ann. § 36-4-3-13(a). 1. Subsections 13(b) or 13(c). An annexing municipality must satisfy either subsection 13(b) or 13(c), both of which reflect the legislature's desire for some contiguity between the city and the annexation territory. In addition to contiguity, subsection 13(b) requires one of three conditions to exist relating to the extent the territory is in use. Id. § 36-4-3-13(b). Subsection 13(c) takes a different approach. The city must show that at least one-fourth of the aggregate external boundaries of the annexation territory coincide with the city's boundaries. The city must also demonstrate that the territory sought to be annexed is needed and can be used by the municipality for its development in the reasonably near future. Id. § 36-4-3-13(c). The trial court determined that Carmel's proposed annexation satisfies not just one, but both of these prerequisites. There is no challenge on appeal to this conclusion. 2. Subsection 13(d). A city meets its burden under subsection 13(d) when it establishes that [it] has developed and adopted a written fiscal plan and has established a definite policy, by resolution of the legislative body. Id. § 36-4-3-13(d). The fiscal plan must show: (1) The cost estimates of planned services to be furnished to the territory to be annexed [including] . . . itemized estimated costs for each municipal department or agency. (2) The method or methods of financing the planned services. The plan must explain how specific and detailed expenses will be funded and must indicate the taxes, grants, and other funding to be used. (3) The plan for the organization and extension of services [including] . . . the specific services that will be provided and the dates the services will begin. (4) That planned services of a noncapital nature . . . will be provided to the annexed territory within one (1) year after the effective date of annexation . . . in a manner equivalent in standard and scope to those . . . provided . . . within the corporate boundaries. . . . (5) That services of a capital improvement nature . . . will be provided to the annexed territory within three (3) years after the effective date of the annexation in the same manner as those . . . provided . . . within the corporate boundaries. . . . Id. The requirement for a written fiscal plan serves three purposes in annexation law: First, the publication of a written plan permits landowners to make an intelligent decision about whether to accept annexation or remonstrate. Second, requiring a written plan makes the opportunity for remonstrance and judicial review more realistic. As a practical matter, 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 right of landowners to institute proceedings to force an annexing city to provide the services promised under the plan. Chidester, 596 N.E.2d at 1377-78; see also Bradley, 764 N.E.2d at 220; City of Fort Wayne v. Certain Sw. Annexation Area Landowners, 764 N.E.2d 221, 225 (Ind. 2002). In assessing a municipality's ordinance and plan, a court should keep in mind that annexation is a legislative function. Rogers, 688 N.E.2d at 1239. Moreover, a trial court hearing a remonstrance is not an examiner conducting an audit of a challenged fiscal plan. Rather, it should focus on whether that plan represents a credible commitment by the municipality to provide the annexed area with comparable capital and non-capital services. Bradley, 764 N.E.2d at 216. The trial court concluded that Carmel's original fiscal plan failed to meet the requirements of subsection (d)(2). It criticized the plan for not providing the funding methods for services from each of Carmel's city departments or more specific estimates of expenses. (App. at 28.) This conclusion is not supported by the evidence. The plan's fiscal projections contain both a breakdown of expenditures by department and a description of which city funds will be used to pay for the overall package of services. [3] The projections show the various forms of revenue expected to be collected in connection with the proposed annexation. They net out expenses and revenue to show the overall impact, demonstrating that revenue from the annexation territory will be a significant source of funding for services to the territory. Carmel's revised ordinance and fiscal plan satisfy the general purposes assigned to them under the Code. As for giving notice so that those affected can make a decision about their interests, the landowners stand before us in this proceeding as living proof that the first purpose has been fulfilled. As to the second, Carmel's fiscal plain explains in considerable detail its strategy for providing services to southwest Clay (detail sufficiently minute that counsel understandably complain about some of the print size). The level of detail is both ample for judicial review and sufficient to test the future fulfillment of the pledge of service. To mention a few examples, Carmel plans to hire at least six new police officers (at $90,000 each), at least four new communications center employees ($48,000 each), and one new city court employee ($65,000-$70,000), and the City will provide a combination of tandem axle trucks, single axle trucks, pick ups and street sweepers for road maintenance ($780,000). (App. at 152-54, 156-58.) The three landowners do not contest the accuracy of any of these calculations on appeal, nor do they contend that the services contemplated are less than those provided the present city residents. By contrast, at the end of the day those who led the remonstrance, backed up by a majority vote, told the court that they regarded the plan as a credible commitment. [4] City of Fort Wayne, 764 N.E.2d at 226-28. The general question is whether services similar to those offered in the existing city will be provided and whether the annexing municipality will be able to finance them. The trial court noted that Carmel did demonstrate the general financial wherewithal to pay for the SW Clay annexation. (App. at 31.) In light of the failure of the landowners to contest the adequacy of the services planned and the trial court's finding that the city's finances were sufficient to carry them out, the trial court's judgment that the plan did not meet the requirements of subsection 13(d) was clear error.
A relatively new provision of the Code stipulates that even if a municipality satisfies all the prerequisites of section 13, aggrieved landowners can still defeat the annexation. The Code requires that the court prohibit the annexation if it finds that all of the conditions set forth in clauses (A) through (D) and, if applicable, clause (E) exist in the territory proposed to be annexed: (A) The following services are adequately furnished by a provider other than the municipality seeking the annexation: (i) Police and fire protection. (ii) Street and road maintenance. (B) The annexation will have a significant financial impact on the residents or owners of land. (C) The annexation is not in the best interests of the owners of land in the territory proposed to be annexed as set forth in subsection (f). (D) One (1) of the following opposes the annexation: (i) At least sixty-five percent (65%) of the owners of land in the territory proposed to be annexed. (ii) The owners of more than seventy-five (75%) in assessed valuation of the land in the territory proposed to be annexed. Evidence of opposition may be expressed by any owner of land in the territory proposed to be annexed. Ind.Code Ann. § 36-4-3-13(e)(2) (emphasis added). The trial court found conditions (A) through (D) were all satisfied, and condition (E) not applicable. Some of these findings pose interesting questions. As to condition (A), for example, Clay Township presently pays Carmel to provide fire protection in the annexed area. Does this mean that a provider other than the municipality seeking the annexation, to quote section 13(e)(2)(A), is providing fire protection? This conundrum can wait for another day, inasmuch as the remaining remonstrators have not proven condition (D). Condition (D) contemplates a showing that at least 65% of the landowners oppose the annexation. Section 13(e)(2)(D)(i). The trial court concluded that Condition (D) was met because 65% opposed the annexation when they signed on for the initial remonstrance. (App. at 34-35.) The appropriate consideration should have been whether 65% of the landowners continued to oppose the annexation. Condition (D) complements the rest of the statutory arrangement only if understood as a testing of landowner sentiment after the rest of the process has run its course. NOAX President Fred Yde testified at the evidentiary hearing that the only way he secured enough signatures for the remonstrance petition was to promise to negotiate with Carmel for better terms of annexation. ( Id. at 340-41; Appellant's Br. at 35; Trial Tr. at 262, 270-77.) The trial court found that he succeeded, declaring that the terms of the amended ordinance benefited both the remonstrators and the municipality. [5] (App. at 23.) Those new and favorable terms led to the settlement in support of the amended ordinance. There is no need to speculate about how many of the original remonstrators supported the settlement. The referendum shows that it is mathematically impossible to meet the 65% opposition requirement. (Appellant's Br. at 36; Petr.'s Ex. 117) (546 of the original remonstrators supported the amendment, reducing the number of certified remonstrators to 1,855far below 2,236 or 65%). To defeat an otherwise valid ordinance, all conditions of section 13(e)(2) must be met. They were not.