Opinion ID: 1727552
Heading Depth: 2
Heading Rank: 1

Heading: whether the chancellor erred in granting the city of batesville's petition for annexation, or whether the chancellor committed manifest error in finding the annexation reasonable.

Text: ¶ 8. In City of Biloxi, this Court unequivocally stated the standards by which a Chancellor must judge the reasonableness vel non of a city's proposed annexation: The outcome determinative question of ultimate fact before the chancery court is the reasonableness of the proposed annexation. Over the years our case law has developed a number of factors that should be considered in this context. Before listing them, it should be emphasized that these factors are but indicia of reasonableness and not separate or distinct tests in and of themselves. Bassett, 542 So.2d at 921. In a series of cases beginning with Dodd, 238 Miss. at 396-97, 118 So.2d at 330, including McElhaney, 501 So.2d at 403-04, and City of Greenville v. Farmers, Inc., 513 So.2d 932, 941 (Miss.1987), this Court has recognized at least eight indicia of reasonableness. These are (1) the municipality's need for expansion, (2) whether the area sought to be annexed is reasonably within a path of growth of the city, (3) the potential health hazards from sewage and waste disposal in the annexed areas, (4) the municipality's financial ability to make the improvements and furnish municipal services promised, (5) the need for zoning and overall planning in the area, (6) the need for municipal services in the area sought to be annexed, (7) whether there are natural barriers between the city and the [proposed annexation area], and (8) the past performance and time element involved in the city's provision of services to its present residents. Other judicially recognized indicia of reasonableness include (9) the impact (economic or otherwise) of the annexation upon those who live in or own property in the area proposed for annexation; Western Line, 465 So.2d at 1059, (10) the impact of the annexation upon the voting strength of protected minority groups, Yazoo City, 452 So.2d at 842-43, (11) whether the property owners and other inhabitants of the areas sought to be annexed have in the past, and for the foreseeable future unless annexed will, because of their reasonable proximity to the corporate limits of the municipality, enjoy the (economic and social) benefits of proximity to the municipality without paying their fair share of the taxes, Texas Gas Transmission Corp. v. City of Greenville, 242 So.2d 686, 689 (Miss.1970); Forbes v. City of Meridian, 86 Miss. 243, 38 So. 676 (1905); and (12) any other factors that may suggest reasonableness vel non. Bassett, 542 So.2d at 921. More recent cases have also relied upon these twelve factors. In re Enlargement & Extension of the Mun. Boundaries of the City of Madison, Mississippi: The City of Jackson, Mississippi v. City of Madison, 650 So.2d 490 (Miss.1995) (hereinafter,  Madison ); In re Extension of the Boundaries of the City of Columbus, 644 So.2d 1168 (Miss.1994) (hereinafter  Columbus ). The chancellor must consider all of these factors and determine whether under the totality of the circumstances the annexation is reasonable. Id. at 921-22; In the Matter of the Extension of the Boundaries of the City of Vicksburg, 560 So.2d 713, 716 (Miss.1990); In re Enlargement of Corporate Boundaries of the City of Booneville v. City of Booneville, 551 So.2d 890, 892 (Miss.1989); In the Matter of the Extension of the Boundaries of the City of Jackson, 551 So.2d 861, 864 (Miss.1989). City of Biloxi, 744 So.2d at 276-78.
¶ 9. The Chancellor found that Batesville had evidenced a need to expand. Specifically, the court looked to the residential, commercial, and industrial development occurring along Highway 35, Brewer Road, Highway 6, Sherwood Forest Estates (which already had been furnished municipal services), Good Hope Road, Cotton Plant Road, Trantham Road, and the Fox Meadows subdivision. The Chancellor also took notice of the small percentage of developable land available within the current city limits. ¶ 10. Batesville supported its claim that expansion was needed by pointing out the upward trend of the population growth within the city (673 persons over the last 7 years) and the annexation area and the issuance of new building permits within the city (275 permits over the last 7 years, including 9 permits for the construction of public buildings and one large retail outlet mall). Batesville also offered proof that by 1997 only 21% of the land currently existing in the city was vacant and had development potential. Its expert testified that when a city reaches a 60% level of development, annexation was needed to meet the growth trend, and Batesville had already reached a 79% level of development. ¶ 11. The COA argues that the relevant question is not whether Batesville needs to expand, but how much it needs to expand. Even the Chancellor opined that this expansion was admittedly aggressive, as Batesville is seeking to add some twenty square miles, which would more than double its current size. The COA contends that the Chancellor should have quantified Batesville's need and provided for only a moderate expansion in keeping with its proven need to expand. ¶ 12. The COA points out that Batesville did not introduce any population density or annual acreage development studies. It also demonstrates that Batesville has expanded by about 155 acres per year for the past 3 years, and, that if this rate of expansion remains constant, it would take 12 years to develop all of the available land within the current city limits. ¶ 13. The COA points out that testimony at trial showed that there was developable residential land available within the current city limits and the undisputed annexation areas, and that there is little room for residential, commercial, or industrial development in the areas that are disputed, as most of those areas have already been developed and serve as residential and agricultural development. ¶ 14. We are not persuaded that the city has demonstrated a need for such an expansive annexation in toto. The uncontested annexation area consists of 4,800 acres of land, or 7.5 square miles, which would represent almost 40% of Batesville's incorporated limits after annexation. [4] The undisputed area is ripe for annexation; it contains virtually undeveloped land, and many property owners there favor the annexation. In fact, plans are currently being made for a new hospital and other residential, commercial, and industrial developments. Batesville has annexed this territory at a crucial time to ensure orderly development. ¶ 15. Batesville has also demonstrated a need to expand into the disputed Brewer Road area, which is approximately 1,400 acres or 2.2 square miles. Testimony at trial revealed that the Brewer Road Area was essential to the annexation. Brewer Road is a vital line of communication, as it is one of only four routes that will link the older part of Batesville west of I-55 to the new annexed areas east of I-55. Along this road, residents are provided municipal water services, and sewer and gas improvements are planned. Extension of these utilities will provide services, not only for the Brewer Road Area, but for the uncontested annexation areas to the immediate north and south of the Brewer Road Area, including the Bethlehem Road Area and the Corridor 6 North Area. A review of the Appendix A map reveals that it would be illogical to leave the Brewer Road area out of the annexation in light of the newly annexed areas immediately adjacent to the north and south. Allowing annexation of the Brewer Road Area will also give Batesville a somewhat contiguous eastern boundary. This Court has considered the need for access to other areas as a factor for determining the reasonableness of annexation of a particular tract of land; otherwise, there would be a hole in the city after annexation. See City of Greenville v. Farmers, Inc., 513 So.2d 932 (Miss.1987). The Brewer Road Area and the uncontested areas add 6,200 acres or 9.7 square miles to Batesville's current 11.8 square miles, and provide ample opportunities for growth and development. In conclusion, this factor tends to weigh against the reasonableness of the annexation for the E½-Corridor 6 South Area, but in favor of annexation of the disputed Brewer Road Area.
¶ 16. The Chancellor concluded that [i]t is doubtful that reasonable minds can differ that the proposed area of annexation is within the path of growth of the city. In fact, undisputed evidence shows that Batesville's development has predominantly moved towards the east, where the current disputed areas of annexation lie. The Chancellor's decision related to the path of growth is not manifestly erroneous. Nevertheless, it should be noted that Batesville's current undisputed boundaries do not extend as far east as the E½-Corridor 6 South Area, while they do encompass the areas just north and south of the Brewer Road Area. ¶ 17. In determining whether a proposed annexation area is within the path of growth of a city, we consider whether the proposed annexation area is adjacent to the city, accessible by public streets, roads, and highways, and has a common community of interest with the city. In the present case, the Brewer Road Area fulfills these criteria, but the E½-Corridor 6 South Area is still comparatively remote from the other annexed areas. Therefore, this factor also tends to favor a modification of the annexation to include the Brewer Road Area, but to exclude the E½-Corridor 6 South Area.
¶ 18. The Chancellor concluded that the improper discharge of sewer and waste in the proposed annexation area created a potential health hazard and militated in favor of annexation. He also concluded that municipal enforcement of litter and trash disposal and regular trash collection would prohibit the illegal or improper disposal of solid waste materials. ¶ 19. The COA concedes that a municipal, central sewer system and waste treatment facility would be better than the septic tanks and private treatment plants currently in use. On the other hand, some of the residents in the disputed areas have spent significant sums of money for their private sewage systems. Indeed, Batesville's expert testified that sewer services would not need to be extended into those locations, including Fox Meadows, because those residents have demonstrated adequate upkeep of their private sewage systems. The COA acknowledges that a central sewer system would be more desirable, but it contends that the current system is effective. In addition, Batesville did not present any evidence of a health problem related to the sewage systems in the proposed annexation area. ¶ 20. Batesville did, however, show the potential for a health problem resulting from the use of defective and malfunctioning septic tanksa problem present throughout the annexation areaallowing for sewage to seep on top of the ground. Additionally, the soil is apparently not conducive to the use of septic tanks. An employee of the State Department of Environmental Quality who appeared as Batesville's expert testified that, in the annexation area, open dumping of garbage, old vehicles and other large pieces of machinery was practiced, standing water was present due to lack of absorption in the soil, and mosquito control was needed. ¶ 21. While Batesville made an adequate showing of the desirability of central sewage, it failed to present a comprehensive plan for preventing these potential health hazards within a reasonable amount of time.
¶ 22. The Chancellor concluded, Based upon the testimony of the witnesses, and examination of the budgets and other financial data presented, there is little doubt that the municipality is financially able to make the improvements and furnish municipal services outlined in their plan for the proposed annexation area. ¶ 23. The COA contends that implementation of the sewer and water improvement plans would not provide all of the outlined services within a reasonable 5 year period. See City of Columbus, 644 So.2d at 1182; City of Jackson, 551 So.2d at 861. Instead, each of these proposals is divided into two phases, the second phase of which is contingent on those secondary services being necessary and economically feasible. Neither do the plans provide for any specific source of funding for the second phase. ¶ 24. The COA additionally alleges that Batesville did not provide accurate cost estimates to its accountant, and, as a result, he was unable to testify at trial about the financial feasibility of those phase two costs. Batesville's retained accountant, who testified about Batesville's ability to finance the expansion, was not adequately informed of the costs of the sewage system or the planned hospital commitments. Lastly, Batesville is not planning on purchasing any new equipment or providing any new personnel for its government, court, police department, or public health and sanitation department. Nor does it intend to make any street improvements, or build recreational facilities. In sum, the COA believes that Batesville is financially capable of supporting this annexation only because it will not be improving or extending its services. ¶ 25. Batesville replies that it has adequate bonding capacity and grants available that, along with tax collections and other revenues, make this annexation economically feasible. Batesville wishes to extend a full range of municipal services to the proposed annexation area, but makes reference in its brief to those services being provided where necessary and economically feasible. Batesville's financial advisor testified that Batesville had adequate bonding capacity to finance an expansion. Batesville also emphasizes that it has already incurred considerable expenses in providing services to the proposed annexation area, including a new sewer treatment facility and water, sewer, and natural gas services to the Sherwood Forest Subdivision (not included in the area in dispute on this appeal), and the purchase and improvement of the Humanity Water Association System, which does supply water to the residents of the disputed areas. The financial advisor further testified that Batesville had a good credit history and has always met its financial obligations. ¶ 26. After a reviewing the record in this case and briefs and hearing oral argument, we are left with real doubts that Batesville will extend all of its municipal services to the residents of the proposed annexation area within a reasonable time. As stated earlier, Batesville has shown that the residents of the proposed annexation area are primarily in need of an adequate central sewer system to eliminate any potential health hazard, yet Batesville has failed to commit to providing such a service within a reasonable time if it is not economically feasible. Given the expense that Batesville will incur in providing municipal services to the undisputed annexation area, and according to the proposed plans for implementation of a new sewer system, there is the distinct possibility that residents in the more remote areas will not receive such services within the first five years. While we find Batesville's desire to extend the full range of municipal services as outlined in the adopted ordinance laudable, we would afford more credibility to its promises if services are extended to the areas approved here for annexation. At this time, however, this Court cannot say with certainty that the residents of the proposed annexation area, especially those in the E½-Corridor 6 South Area, which is more remote from the current city systems, would, within a reasonable amount of time, see benefits from the payment of city taxes.
¶ 27. The Chancellor found: Clearly, there is a need for zoning and overall planning in the proposed area of annexation. While Batesville maintains a comprehensive plan to assist in the planning of development, has adopted appropriate zoning ordinances as well as subdivision regulations as well as certain building and licensing codes, the residents of the proposed annexation area have none whatsoever available to them through Panola County. ¶ 28. The COA maintains that there is little need for municipal level zoning, overall planning, or municipal service in [a] mostly rural and agricultural area. In re Exclusion of Certain Territory from the City of Jackson, 698 So.2d 490 (Miss.1997). It does not want or need municipal zoning in the disputed areas. The COA believes that the common law adequately protects it from nuisances created by neighbors, and that there is no need for further regulation. Indeed, freedom from regulation is one of the reasons that its members have moved out of the city limits and into the country. ¶ 29. Batesville also failed to provide a zoning proposal, although the mayor testified that the zoning would be the current use of the land, which is mostly residential for the disputed areas. ¶ 30. Batesville cites Dodd v. City of Jackson, 238 Miss. 372, 396, 118 So.2d 319 (1960) for the proposition that [t]here is much merit to the theory of overall planning, namely, where it can be reasonably anticipated that a certain area will become a part of the City in reasonable time, it is better to take it in and develop the same properly and wisely. Batesville has extensive zoning and building regulations, designed to keep the residents safe from building violations, and allow orderly development to prohibit incompatible land uses. ¶ 31. While the Chancellor's findings were not manifestly erroneous at the time of trial, we take judicial notice that Panola County has now adopted land development standards and regulations which serve to give some measurable standards for new development outside Batesville's city limits. [5] Indeed, the regulations provide that any development within a mile of city limits must meet be submitted to the city's governing authority for recommendation prior to the approval for construction by the county. Therefore, residents of the E ½-Corridor 6 South Area would be required to submit plans to Batesville prior to implementation of any new subdivision growth, thereby allowing Batesville a method for controlling development and prohibiting incompatible land uses. Therefore, this factor now weighs against annexation of the E½-Corridor 6 South Area.
¶ 32. The Chancellor found that the proposed annexation area was in need of animal and mosquito control services, routine trash collection, street lighting, and recreational services and facilities. In addition, annexation would allow for greater fire and police protection for the disputed areas, as well as water and natural gas services. ¶ 33. The COA shows that it has water services through Humanity before it was purchased by Batesville, and continues to be supplied water through that association. Also, although admittedly not as nice as a connected sewer system, the residents do have sewer services. And, as indicated above, there is no indication that a central sewer system could or would be provided by Batesville. Finally, residents of the disputed areas have protection provided by the Sheriff's office and two county fire districts with volunteer services. ¶ 34. Batesville documented the need for a connected sewer system. It also asserts that the annexation area residents would, through annexation, have assured police and fire services that are now provided only on a back-up basis. It also asserts that it can provide zoning and planning services which are unavailable through Panola County; however, as noted, even the county residents are now bound by some planning regulations. Batesville maintains that it is capable of providing all of the needed services outlined by the Chancellor. ¶ 35. The evidence shows that the residents of the proposed annexation area are already provided with the most basic and necessary of the municipal services. They currently have water services, garbage collection through the county, and police and fire protection. There is no substantial, credible evidence that a central connected sewerthe service that is not provided, but most neededwould be provided by Batesville within a reasonable time. Therefore, there is little evidence that better municipal services would result if annexation were allowed, particularly for the comparatively remote E½-Corridor 6 South Area. This factor tends to weigh against the reasonableness of annexation of the E½-Corridor 6 South Area.
¶ 36. While there is no natural barrier between Batesville and the proposed annexation area, I-55 presents an artificial boundary. With four points of access, however, the interstate is not an impenetrable boundary. This factor does weigh in favor of annexation of the Brewer Road area, since that area is one source of connection between the barrier and Batesville.
¶ 37. The Chancellor concluded that, [w]ith the possible exception of the lack of sewer services available to some residents in past areas of annexation, there is little evidence to suggest that the past performance of the city in providing services to residents is anything short of satisfactory. ¶ 38. Batesville points out in its brief its history of providing water, sewage, and gas services, as well as resolving street problems, within a reasonable period of time of its last two annexations. The only problem cited by the COA is that less than 2% of the residents (approximately 35) of the last annexation have not been connected to Batesville's sewer system. Batesville should be commended for this record. However, east of I-55, sewer services have been provided only to the Parker-Hannifin Plant because Batesville has not found it economically feasible to extend further the sewer lines on that side of the interstate. Thus, there are several city clients, albeit businesses, located in areas annexed over 18 years ago that still do not have city sewer services. In this case, there are many residential areas that would benefit from a central sewer system, yet Batesville has not promised to provide that service to the more remote disputed areas unless it is economically feasible. Because of the large amount of area allowed for annexation, and the need for development of utilities and consolidation of services, it cannot be said that annexation of the E½-Corridor 6 South Area is reasonable. This factor weighs against the reasonableness of the annexation for the E½-Corridor 6 South Area.
¶ 39. The Chancellor found that the impact of annexation on the residents of the proposed annexation area could only be positive. Annexation would increase property values, lower insurance premiums, and provide municipal level services to the residents. ¶ 40. The COA, however, believes that their payment of city taxes will gain them nothing that they deem desirable. The residents may incur additional expense in meeting the Batesville's regulations and restrictions, and they would not have the freedom that they currently enjoy to manage their own affairs and property. ¶ 41. In City of Biloxi, we concluded that even though the individual objectors are apparently vehemently opposed to annexation[,] ... the residents of the [proposed annexation area] will receive something in exchange for their tax dollars. Therefore, although the individual objectors make a strong argument against annexation under this indicium, it is only one indicium of the twelve and is not in and of itself conclusive. 744 So.2d at 284. In this case, however, it is more difficult to delineate exactly what services or benefits of value that the residents of the proposed annexation area will receive in exchange for their tax dollars. While the Chancellor correctly noted that the residents would receive lower insurance rates, higher property values, and municipal services, we have pointed out the challenge that Batesville faces to provide adequately for the allowed annexation areas, and we are unable to conclude that residents of the E½-Corridor 6 South Area would be greatly benefitted for their tax dollars.