More Informative Plans of Services: Making Annexation Attractive

Because Public Chapter 707 requires cities to obtain consent from residents or landowners, either in writing or through a referendum, it will be more important than ever for cities to make annexation appealing to residents.  Cities may be able to use existing requirements to present and adopt plans of services for areas to be annexed to demonstrate the benefits of annexation.  Before annexing new territory, Tennessee requires cities to adopt plans of services describing the services that will be extended to the area, including police protection, fire protection, water service, electrical service, sanitary sewer service, solid waste collection, road and street construction and repair, recreational facilities and programs, street lighting, zoning services, and city schools if maintained separately.35  These plans must include a reasonable implementation schedule for those services and may exclude those services that are being provided by another public agency or private entity.36

Tennessee also requires a public hearing on the plan of services before it is adopted, in addition to the public hearing on the annexation itself.  The notice for the plan of services hearing must say where the public can view copies of the plan.  After annexation, cities must publish annual reports on progress toward extending services to the annexed areas.  Residents in annexed areas can sue to enforce implementation of the plan.

Although plans of services in Tennessee contain a lot of information, they are not required to include information about cities’ financial ability to implement those plans.  City residents and residents outside the cities are often not informed about how cities will pay for the services, what the tax consequences will be, or what service charges will result from the extension of services.  As originally written, the bills that became Public Chapter 462, Acts of 2013 (Senate Bill 1054 by Kelsey, House Bill 1263 by Carr, D.) would have required the plans to include information about the cities’ financial ability to provide services, including estimated costs and any commitment to make expenditures or to budget additional resources to provide services to territories proposed to be annexed.  This requirement was removed before the bill was passed.

Like the sponsors of these bills, other states have recognized the importance of requiring cities to report their financial ability to provide services to areas proposed to be annexed.  Fifteen states require plans of services to include budget or financial information.37  Some states have very general requirements for what must be reported, including Florida, which requires cities to provide the “method under which the municipality plans to finance extension of services” in their plans.38  Other states are more specific, for example Utah, which requires cities to include projected costs, tax consequences, and other information.39

35 Tennessee Code Annotated, Section 6-51-104.
36 Tennessee Code Annotated, Section 6-51-102.
37 Delaware, Florida, Indiana, Kansas, Kentucky, Maryland, Missouri, Montana, Nebraska, Nevada, North Carolina, Oklahoma, South Dakota, Utah, and Wyoming.
38 Florida Statutes, Section 171.042.
39 Utah Code Annotated, Section 10-2-401.5.