Annexation Handbook Publication

MRSC PUBLICATIONS › Annexation Handbook Publication

Annexation Handbook

Revised April 2008 - Report No. 19

Copyright © 2008 by the Municipal Research and Services Center of Washington. All rights reserved. Except as permitted under the Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means or stored in a data base or retrieval system without the prior permission of the publisher, however, government entities in the State of Washington are granted permission to reproduce and distribute this publication for official use.

Chapter One - Why Annex?

Chapter Two - The Evaluation of Annexation Proposals

Chapter Three - The Annexation Information Program

Chapter Four - Consequences of Annexation

Chapter Five - Preliminary Matters

Chapter Six - Methods of Annexation in First and Second Class Cities and in Towns

Chapter Seven - Methods of Annexation in Code Cities

Chapter Eight - Review Boards

Chapter Nine - Annexation Questions and Answers

Preface

This publication is designed to address the general topic of municipal annexation and to provide assistance with the statutory procedures for annexation for the various classes of cities and for towns in Washington State. It also provides answers to some of the recurring legal questions on annexation.

This is a revision of the original Annexation Handbook for Cities and Towns in Washington State, published by the Municipal Research & Services Center in 1979. This version is current with the 2004 Revised Code of Washington (RCW).

We caution that subsequent state legislatures may make major changes to the statutory annexation procedures, and readers should be aware of this as future legislatures complete their business. There is certainly room for clarification and change in the annexation laws. Readers should also be aware that not all the questions and problems that may arise in any given annexation can be anticipated and addressed in a publication such as this.

Richard Yukubousky, Director
Municipal Research & Services Center of Washington

Chapter One - Why Annex?

I. Introduction

Proper annexation of areas adjacent to cities¹ is often crucial to establishing and maintaining urban order and effective government. Rapid development and population growth frequently occur just outside city boundaries where property is cheaper and zoning laws may be less restrictive. Small and large cities alike are surrounded by “fringe” areas. With the development of fringe communities come the problems that concentrations of people create—increased traffic congestion on inadequate roads, the need for improved police and fire protection, and inadequate land use planning resulting in disorderly growth.

These problems, unfortunately, cross boundary lines and become a city's problem too. Lack of safe streets spreads traffic congestion into the city. Lack of necessary police protection encourages the spread of crime throughout the entire urban community. Lack of proper planning and land use control allows uses that may threaten the social and economic life and cohesiveness of the community.

The growth of separate fringe areas may produce a complex pattern of government by multiple jurisdictions—city, county, and special districts—that can lead to administrative confusion, inefficiency, duplication, and excessive costs. The urban community can become a tangle of small competitive governmental units that lack the administrative, jurisdictional, or financial ability to provide the essential services and facilities necessary for sound development. Once this complex pattern becomes established, vested interests and sectional jealousies make change difficult, if not impossible.

At the same time, economic and social ties between cities and their fringe areas can be strong. Outlying areas benefit in many ways from city parks and recreational facilities, streets, utilities, and other facilities and programs, often without contributing a proportionate share of the cost to the city. Moreover, suburban people may request services equivalent to those provided within the city and may recognize that their taxes and other costs (including utility costs and fire insurance premiums) in an unincorporated area are not necessarily lower and are often equal to, or greater than, those within the city.

A logical solution may be annexation. Properly used, annexation preserves a growing urban area as a unified whole. It enables urbanized and urbanizing areas to unite with the core city to which the fringe is socially and economically related. It facilitates the full utilization of existing municipal resources. City administrative and technical personnel are able to address the fringe area's municipal needs, and do this in a manner consistent with policies of the annexing city. Annexation is often preferable to the incorporation of new cities, since new incorporations in urban areas may cause conflicts of authority, the absence of cooperation, duplication of facilities, and an imbalance between taxable resources and municipal needs. Industrial, commercial, and high-income residential areas may offer a high level of urban services, while the low and moderate income residential satellite city may strain to provide minimal services. In both instances, satellite city residents draw on the resources of the core city without contributing toward the cost of these resources.

Annexation, therefore, may be appropriate when the central city is surrounded by a growing area, when the need for orderly planning and governmental services in fringe areas increases, and when neededservices can best be supplied by the central city. In general, annexation is a solution in instances when a central city is able to address emerging fringe area concerns.

Knowledgeable local government officials have long recognized that what is “urban” should be “municipal”. Urban growth without central planning and control becomes urban sprawl. If cities are to continue to be effective units for urban services, they must be allowed to follow natural growth patterns into those fringe areas where there is urban development. They must be able to guide development in an orderly manner, and avoid the need to extend costly urban services to distant and scattered “pockets” of development. Annexation can guarantee to a city a measure of responsible control over its future.

II. Growth Management Act and Annexations

The 1990 Growth Management Act (GMA), recognizing many of the above considerations, imposes limitations on and establishes a territorial framework for the annexation authority of cities located in counties subject to GMA requirements.² A major goal of the GMA is to reduce urban sprawl by encouraging development in urban areas where adequate public facilities already exist or where such facilities can be more efficiently provided. RCW 36.70A.020(1), (2). To help implement this goal, the GMA requires that counties designate urban growth areas “within which urban growth shall be encouraged and outside of which growth can occur only if it is not urban in nature.” RCW 36.70A.110(1). Urban growth areas are to include territory sufficient to accommodate the twenty-year population growth projected for the county. RCW 36.70A.110(2). Every city must be included within an urban growth area. Urban growth areas may include territory outside of cities if that territory “already is characterized by urban growth whether or not the urban growth area includes a city, or is adjacent to territory already characterized by urban growth.” RCW 36.70A.110(1). Significantly, the GMA further states that “it is appropriate that urban government services be provided by cities, and urban government services should not be provided in rural areas.” RCW 36.70A.110(3).

Consistent with this goal of controlling the spread of urban growth, the GMA limits the territory that a city may annex to that which lies within its urban growth area. RCW 35.13.005, 35A.14.005. Nevertheless, while limiting the territorial extent of annexations, the GMA facilitates the process of annexation through the comprehensive planning process it mandates.³ A city's comprehensive plan should address planning policies within its urban growth area. As such, a city subject to the GMA forms its annexation policy and planning in the context of complying with the GMA. The local and regional planning requirements of the GMA thus serve to integrate city annexations into a county-wide or regional planning scheme.

The ultimate effect of the GMA on annexation procedures is that the statutory procedures for review of a city's decision to annex (by boundary review boards, county annexation review boards for code cities, or ad hoc annexation review boards)⁴ will no longer be needed to assess the suitability of annexations. The GMA expressly recognizes this effect, at least in part, by allowing a county to disband the boundaryreview board after the county and the cities and towns within it have adopted comprehensive plans and consistent development regulations that comply with the GMA.⁵ RCW 36.93.230.

Thus, the GMA makes annexations a part of the overall planning process and essentially eliminates much of the annexation decision-making process in cities within its purview. The annexation issue facing cities in GMA counties will not be so much whether to annex as when to annex. Ultimately, a city will annex to the limits of its urban growth area, assuming that the population projections prove accurate. The timing of that expansion will depend on a number of factors, including population growth within the urban growth area and the city's ability to provide urban-type services in that area.

However, even in the context of the GMA, cities will still need the consent of either property owners or voter/residents within areas they desire to annex. The following discussion of the pro and con arguments will therefore still be relevant to annexations in GMA counties, as well as to those in non-GMA counties.

III. The Pro and Con Arguments

There are certain basic arguments, pro and con, that invariably surface during the course of an annexation attempt. Some of these may be based on fact, such as, “the annexing city, by extending its services to the new area, can avoid duplication of facilities.” Some concerns may be more difficult to demonstrate, such as, “urban areas must develop as a unit because their social and economic parts are interrelated.” Others may be related to partisan interests, such as, “special districts and their attendant influence must be retained.” Still other arguments may reflect fear of change: “the community to be annexed may lose its individuality and identity.” As noted above, however, many of these arguments will no longer be applicable in GMA counties after the establishment of urban growth areas.

The following list of arguments should assist in anticipating issues that may arise during annexation proceedings. City officials may want to carefully consider what facts exist to prove or disprove each argument, what special interests underlie some arguments, and what misconceptions may require correction.

A. Arguments Favoring Annexation

After annexation, the new territory will obtain its necessary services from city departments that are professionally staffed and experienced. Duplication of services can be avoided. Considerable economies can result from the coordination of services over a larger area.
When the interrelationship between the city and the fringe area is close, there is need for unified planning and zoning. By means of annexation, a city's zoning ordinances can be extended to adjacent areas in a logical manner, thus helping to assure orderly growth. Coordinated action is much easier to achieve if the fringe community becomes part of the city.
Annexation gives suburban residents a voice in the government of the larger community in which they live. County dwellers can be substantially affected by actions of the central city, but they have no participation in its affairs.
Business, professional, and community leaders who live in the fringe area can have a more direct role in community affairs by being elected or appointed to public office in the city.
Annexation eliminates the need to form a new city government with its attendant “start-up costs,” or to continue reliance on costly special districts.
Annexation leads to a unified community and can prevent the fragmentation of local governmental authority among a large number of special districts. Fragmentation may cause “conflicts of authority and the absence of cooperation, political irresponsibility, a long ballot, duplication of services, inadequate service levels, lack of effective area-wide planning and programming, financial inequities and other problems.”⁶
Political boundaries will, after annexation, more nearly reflect the true and existing sociological, economic, cultural, and physical boundaries of the city. The fringe and the city are inextricably bound together.
Annexation increases a city's size and population, and in some instances raises its level of political influence, its prestige, and its ability to attract desirable commercial development. It may also increase its ability to attract grant assistance.
Annexation can protect, or enhance, a city's tax base. The increased valuation of the city will result in a greater bonding capacity.
Annexation may force new industry to develop in the city, and thus create additional jobs, revenues, and commercial opportunities.
Unified political representation, sound economic development, enhancement of property values, and high service levels at minimum costs can best come from total comprehensive planning that avoids duplication and conflict of authority.
City and county boundaries can be squared off and made orderly and logical, eliminating a hodgepodge and resulting confusion as to whether a particular parcel should look to a city or to the county to obtain services. Fire and police departments, in particular, can determine whether calls are within their respective jurisdictions.
Annexation may bring about lower utility rates, since city utility surcharges to unincorporated territory would be lifted. Annexation also often results in lower fire insurance premiums. As more improvements and urban utilities are made available, real estate values and marketability may improve.
Additional services may become available, such as sewer, water, ambulance, transit, and drainage control.

B. Arguments Opposing Annexation

Annexation may be considered unnecessary if the community's needs, or resources, are limited. It may be unwise if the community is not physically, economically, or socially related to the annexing city.
Residents outside the city may argue that they chose to build and live there in order to avoid taxes for services they do not want. Industry and commercial businesses may state that they located outside the city to avoid certain business and property taxes.
Residents may wish to retain the community's “rural” character and, for this reason, may oppose annexation as a step toward greater urbanization. There may, for example, be a strong opposition to municipal animal controls—both leash laws and restrictions on large animals.
The city's ordinances, regulations, and license requirements may not be appropriate for a particular fringe community.
Residents may desire a higher degree of community identity than they believe they will enjoy as part of a large city. They may want to retain special districts and their attendant influence. A larger municipal government may be less accessible to the people.
There may be distrust of the government and politics of the city to which annexation is proposed.
The city may not be able to finance the additional services expected by residents of the area proposed for annexation, and territory that is annexed to a city may be a financial drain upon it for many years. Services may not be available for extension without adversely affecting in-city service levels or without utility rate increases. Existing police or fire forces may be overextended, reducing the level of protection to the entire community.
There may be fear that annexation may lead to a geometric progression of municipal problems. It cannot be presumed that it will be more economical for a city to provide services to a larger area. Extending the service area may cost much more for each unit than the existing per unit cost.
Since most annexations are very small, annexation does not satisfactorily address community and regional concerns.
Interest in annexation may be limited to a select group of citizens and not shared at the grass roots level.

Chapter Two - The Evaluation of Annexation Proposals

I. Evaluation in the Context of Growth Management Planning

As discussed in Chapter One, the Growth Management Act (GMA) imposes planning requirements that influence the ability of a city to annex and the territorial extent of its authority to annex. As part of its comprehensive planning responsibilities under the GMA, a city must have adopted, or will need to adopt, policies dealing with land use, housing, capital facilities, utilities, and transportation. RCW 36.70A.070. These policies must address lands within the city's urban growth area, because the city will be the provider of urban-type services in that area upon annexation to the city. As the Central Puget Sound Growth Planning Hearings Board emphasized, “cities are the focal points of urban growth, governmental service delivery, and governance within UGAs [urban growth areas].” Association of Rural Residents v. Kitsap County, CPSGPHB Case No. 93-3-0010, at 433 (1994).

Consequently, cities in GMA counties will “evaluate” annexation in the context of their GMA comprehensive planning responsibilities. Some cities include in their comprehensive plans an “annexation element” to provide policy guidance for annexation of territory within urban growth areas.

II. The Statement of Annexation Goals and Policies (Non-GMA Cities)

It is desirable for individual cities to prepare written guidelines for the logical direction of future growth and addressing how annexation proposals will be evaluated. This is recommended for non-GMA cities that do not address annexation issues in the context of comprehensive planning. A statement of annexation goals and policies may be particularly desirable for cities experiencing growth pressure. Annexation policies should be considered by a city apart from specific annexation requests. They should be developed after a city has considered its goals for growth in light of its ability to provide municipal services to additional areas of land. Such a statement can settle in the minds of suburban residents the question of whether or not a city is willing to serve the entire metropolitan area when needed. A statement that supports the promise of annexation may weaken the desire exhibited in some areas toward alternative service arrangements, such as special districts or incorporation. The objective of written criteria should not be to annex land simply to become larger in size than neighboring municipalities. Rather, a statement of annexation goals and policies should seek to delineate what the city considers to be its “sphere of influence,” and under what conditions it will be interested in pursuing particular annexation proposals.

The following elements should be considered in determining the components of a statement of annexation goals and policies:

Identification of a city's “sphere of influence” area, which will establish boundaries of logical expansion and minimize potential conflicts with neighboring cities and with the county.
Adoption of a meaningful set of goals and policies that will inform citizens and organized groups regarding the city's position and philosophy concerning annexation.
Development of policies that will benefit residents of both the city and the fringe area.
Development of goals that will preserve individual area identity and citizen participation in city government.
Provision for departmental staff review and development of cost figures for any area showing an interest in annexation.
Reappraisal of annexation goals and policies on a continuing basis.
Maintenance of an awareness of the needs and problems that exist within suburban areas.
Support of state legislation beneficial to orderly growth through annexation.

An important element of an annexation policy statement is an indication of the city's policies on the three key items which, when applicable, must be included in annexation petitions, resolutions, or ordinances. These items are: (a) the simultaneous adoption of a comprehensive plan and/or a zoning regulation, (b) the assumption of a proportionate share of the outstanding city indebtedness, and (c) the formation of a community municipal corporation. These matters are separately provided for in state law and are addressed individually in this publication. A written policy on these key elements assists city legislative bodies and officials considering annexation to apply consistent principles to actual annexation proposals.

MRSC has assembled a compilation of annexation materials, available on loan, that includes several written annexation policies, including annexation elements from comprehensive plans of GMA cities.

III. Guidelines for Evaluating Proposed Annexations

Whether or not a city has formally adopted an annexation policy statement, it is important to establish criteria for evaluating specific annexation proposals. City policymakers should be consistent in dealing with annexation interests, and apply uniform standards when making decisions regarding annexation. City officials should be particularly concerned about the consequences of accepting an annexation proposal. In some fringe areas, the problems of utilities, sanitation, traffic, and law enforcement are so severe that solving them may place a great strain on the city's resources and may result in increased costs to all residents. Once again, GMA cities should address these issues in the context of comprehensive plan policies.

To be certain that each annexation is in the city's best interest, city officials should establish a set of guidelines by which to review and measure every proposed annexation.

These basic principles should be carefully considered in the selection of any area for annexation:

The boundaries of the annexation area should be drawn in accordance with the ability (both from a geographic and economic standpoint) of the city to provide services. The need for services should be taken into account. The general terrain of the area should allow for expansion of utilities without prohibitive costs.
The population and assessed valuation of the area should be sufficient to allow the area to pay its fair share of the cost of providing services.
The area should contribute to the logical growth pattern of the city and should encourage orderly growth. Where possible, irregular boundaries should be avoided.
It should be no larger than what the city is able to service adequately with capital improvements and services within a reasonable time.
The area should be adaptable to anticipated expansion requirements of the city for residential or commercial/industrial purposes.
The boundaries of an area should be drawn to include residents who are generally favorable toward annexation or where annexation can be demonstrated to be advantageous to the residents of both the fringe area and the city.
In drawing boundaries of an annexation area, due regard should be given to special districts in the area. (See Chapter Four, Section I, on the consequences of annexation on special districts.)

If a proposed annexation can meet all or most of these criteria, the chances of a successful completion of the annexation will be greatly increased and the effect upon the city will be positive.

IV. The Annexation Study

After the general guidelines for a municipality's annexation policy have been established, a city will be in a better position to evaluate individual annexations. When residents of a fringe area indicate an interest in annexing to a city, or the city itself considers the area part of its natural growth pattern and desires to guide its development, a careful and thorough study of the area should be made, particularly for larger annexations. Such a study should gather information on these major points:

A. Statistical Data

Necessary facts including acreage, number of residential units, businesses, industries, estimated population, street mileage, assessed valuations, existing utility services, existing parks and playgrounds, schools, and public buildings.

B. Maps

Preparation of maps to show present and proposed city boundaries, general land use patterns, existing and proposed zoning, present major trunk water mains and proposed extensions, present sewer interceptors and proposed extensions, existing streets, and existing public areas such as playgrounds and schools.

C. Existing Public Services

Public services to the area's residents should be surveyed and evaluated. The methods of providing such services should be described, and their costs determined. These would include: police protection, fire protection, water service, sewage collection and disposal, garbage disposal, street maintenance, street lighting, storm sewers, animal control, planning, building inspection, public health protection, recreation, and library services.

D. Urban Service Needs

Estimates of urban service needs should be made. The extent to which such services are already being provided within the area will determine the degree to which additional services may be required. The city should determine the service shortages in the area proposed for annexation. Service needs should be evaluated by priority of importance. In determining such priorities, prevailing sentiments of residents in the area should be seriously considered.

In GMA cities, service needs, including those within urban growth areas eligible for annexation, should be addressed in the comprehensive plan. The mandatory capital facilities plan element must include, among other things, “a forecast of the future needs for such capital facilities,” the proposed locations of new capital facilities, and at least a six-year plan for financing the future capital facilities. Thus, if a city anticipates annexation of all or part of its urban growth area within the six-year period addressed by the capital facilities plan element, that element should identify needed facilities within the area or areas that the city anticipates annexing.

Similarly, the utilities element and the transportation element should consider needs in a city's urban growth area. Importantly, the transportation element must contain level of service standards to implement the requirement of concurrency with respect to city streets. See RCW 36.70A.070(6). That concurrency requirement mandates that the transportation element identify “specific actions and requirements for bringing into compliance any facilities or services that are below an established level of service standard.” Thus, a GMA city may not be able to approve new development if current service levels in the area are deficient. Before a city annexes territory within its urban growth area, it should therefore analyze how services in that area measure up to level of service standards and how the city can address any identified deficiencies. (Under the GMA, a city may not require developers to finance improvements to address existing system deficiencies.) A city may not wish to annex territory until it has the capacity to correct service deficiencies.

E. Service Requirement Costs

The cost of extending or improving services should be determined. Anticipated expenditures should be contrasted with anticipated revenues that would be derived from the area. Considerations of service costs should include:

Police protection (additional personnel, equipment, police stations);
Fire protection (additional personnel, equipment, hydrants, fire stations);
Public works (additional street lighting, maintenance, construction, storm drainage, garbage collection);
Parks and recreation (additional park acreage, recreational programs, new facilities);
Water (water main construction, maintenance, replacement of old lines); and
Sewers (new interceptor lines, additional treatment plant capacity, pump stations).

The difference between revenues and expenditures required in the extension of urban services may be stated as the city's service liability. The question that logically follows is whether or not the city has the physical and financial capability to provide the required services in areas to be annexed.

F. Estimate of Revenues

A complete estimate of potential revenues to accrue from the area should be made. All existing methods of raising revenue that the city now has should be applied to the area being considered for annexation. These would include property taxes, state shared revenues, sales taxes, business and occupation taxes, and inspection and license fees.

G. Social and Economic Characteristics

It is important to know the character of the fringe area, for this will indicate much about present needs and potential future problems. Is it an industrial area with blue collar workers? Is it a bedroom community of management and professional people? Is it an area of unstable population with an unusual number of vacant housing units?

H. Special Problems

In making an inventory of existing services, an annexing city should also be certain that it knows what special problems might exist. What is the condition of utility lines? Will the pipe size fit in with the city's system? Is the drainage system adequate or lacking entirely? Are there special police problems, such as a tavern with a bad reputation?

The annexation study should be thorough and accurate so as to allow the city officials to make sound decisions on the proposed annexation. If annexation is attempted, the study will furnish information by which both citizens and city officials may evaluate the relative advantages and disadvantages of the proposal.

V. The Plan of Service

An annexation study should serve as a basis for preparing a “Plan of Service.” Such a plan should identify those municipal services proposed to be extended, and establish a time schedule for so doing. People in an annexed area are to be treated in all respects like other residents of the city as soon as is reasonably possible.

The first step is to consider the cost of extending all services being provided in the city. If the full package of services exceeds the city's financial capability, relative priorities should be established and each service should be extended when it is financially possible. The proposed date for doing this should be shown in a time schedule.

Services that will require no extensive capital outlay, such as street maintenance and cleaning, may be provided within a short time. Police protection should be provided immediately, even though this might require spreading out existing manpower and equipment. Fire protection should also be provided as soon as possible; either by the city or by arrangement with the applicable fire protection district.⁷ Providing the desired level of fire protection may require an additional fire station, fire truck, and other equipment and personnel.

With respect to other services involving capital outlays, such as streets and utilities, it should be remembered that: (1) extension of improvements should be commensurate with that in other parts of the city and related to the needs of present settlement and future growth, and (2) extensions should bebased on previously approved policies and standards. For example, if water and sewer lines, streets, or sidewalks are built by local improvement districts with a contribution by the city, this policy should be applied to the annexed area.

Residents in the annexed area do not expect to be taxed without benefits, but they should also not expect disproportionate improvements at the expense of the other residents. Thus, the service plan should take into consideration the tax contribution of the property owners in the area of need, as well as other sources of revenue, to determine the amount of annual expenditures to be made in the annexed area.

The service plan should be scheduled over several years. It should serve to accurately advise people in the annexation area, who must approve the annexation, when they can expect to receive the new or improved services they desire. It should also point out very clearly when the city will require direct payments from property owners in the annexation area to receive the services desired. If property owners in the annexed area are to assume their proportionate share of the city's bonded indebtedness, the report should so state. Reference should also be made to preplanning and zoning of the area, if this is a condition of annexation. (See Chapter Five of this report for details of Washington law as they relate to these subjects.)

Another matter which should be clearly stated in the Plan of Service is whether, or the extent to which, the city will subsidize the introduction of a new service or the improvement of an existing one in the annexed area. Such subsidization might be desirable or necessary if there is a serious service deficiency requiring immediate capital expenditures. Or, it may be politically desirable for the city to assume the cost of immediate improvements in certain services if it is confident that over a longer period of time the costs will prove to be a good investment for the city. However, the decision to subsidize any need of the annexed area should be approached with caution.

Chapter Three - The Annexation Information Program

The success of an annexation program is often directly dependent on public attitudes. Accordingly, it is important that members of the public be fully informed on the issues involved so that the final decision truly reflects the general will. An annexation information program can help to dispel false rumors, misunderstandings, and incorrect information. Annexations can then be more readily judged on their own merits.

Public Relations. A carefully planned public relations program is essential in communicating annexation facts to the public. However, when an election is involved, caution must be exercised not to use public facilities for promoting the ballot proposition, in violation of state law. Specific statutory provisions will be discussed below.

The public relations program can be initiated by sharing factual information pertaining to the annexation proposal with local newspapers, radio stations, and television stations. A speakers' bureau, which might include city officials and other civic leaders, could furnish speakers to service clubs, business groups, and professional organizations.

An effective way to reach the people is through a coffee hour on each block, where one or several city officials (other than the governing body) can sit down with a group of residents and answer direct questions. To the extent that the meeting is a one-to-one exchange, it will be far more influential than large public meetings.

When the annexation involves a considerable residential population or an annexation election, a committee of “citizens for annexation” is desirable. The residents of the area will be less likely to feel that the big city is trying to “gobble them up” if their own friends are sponsoring the annexation. Any printed material for distribution would be prepared and signed by such a committee.

Cost/Benefit. There are two very important questions for which the people in the annexation area will want answers: (1) what benefits will the annexation provide? and (2) what will it cost? These questions require clear and definitive answers. Persons contemplating annexation normally base their final decision on their understanding of the answers to these questions. While many benefits are quantifiable, others are difficult or impossible to measure in terms of dollars. For example, improved police protection may reduce property loss and bodily injury which in turn results in savings on medical expense and loss of wages. It would be unrealistic to attempt to predetermine a dollar value for such possible losses.

The Fact Sheet. A fact sheet, a pamphlet describing the annexation and its consequences, is helpful. The pamphlet should have at least a map of the annexation area, a list of the benefits and improvements that will result from annexation, and a clear statement of the financial implications of the annexation. The financial statement should include a simple chart showing comparative costs for residents in the fringe area and in the city, listing such differences as property tax rates, utility costs, fire insurance rates, and service charges. These costs should be computed at the time the annexation is proposed, and should be so labeled, since costs may vary over time.

Examples of brief fact sheets and cost comparisons are reproduced in the compilation prepared to supplement this report. Several cities and interested citizen groups have also prepared extensive information pamphlets on annexation. Due to their length, they are not included in this publication. Examples may be obtained on a loan basis from the Municipal Research & Services Center at the address listed on the cover page.

Community Identity. Community organizations such as improvement clubs, service clubs, and social clubs may also be valuable in informing residents of annexation issues. Such organizations often promote community spirit and provide arenas for involvement in local issues and affairs. The support or opposition of such organizations can be very important to a city's annexation program.

Apprehension is often expressed that once an area annexes it will lose its identity. Therefore, some city officials dispel such concern by publicly supporting individual area identity and group citizen involvement. The community municipal corporation might be a possible answer to this apprehension in some areas, as examined in detail in Chapter Five of this publication.

How ambitious the public relations effort needs to be will depend, of course, on the size and character of the population involved. In any annexation publicity program, however, the two most effective elements are ready access to cost/benefit information and the direct public encounter, preferably with small groups of people in neighborhood homes.

Caution Applicable to Election Method. If the election method of annexation is to be used, a word of caution is necessary. Since a ballot proposition is involved, the public information program must be tailored to comply with RCW 42.17.130:

No elective official nor any employee of his office nor any person appointed to or employed by any public office or agency may use or authorize the use of any of the facilities of a public office or agency, directly or indirectly, for the purpose of assisting a campaign for election of any person to any office or for the promotion of or opposition to any ballot proposition. Facilities of public office or agency include, but are not limited to, use of stationery, postage, machines, and equipment, use of employees of the office or agency during working hours, vehicles, office space, publications of the office or agency, and clientele lists of persons served by the office or agency: PROVIDED, That the foregoing provisions of this section shall not apply to the following activities:

(1) Action taken at an open public meeting by members of an elected legislative body to express a collective decision, or to actually vote upon a motion, proposal, resolution, order, or ordinance, or to support or oppose a ballot proposition so long as (a) any required notice of the meeting includes the title and number of the ballot proposition, and (b) members of the legislative body or members of the public are afforded an approximately equal opportunity for the expression of an opposing view;

(2) A statement by an elected official in support of or in opposition to any ballot proposition at an open press conference or in response to a specific inquiry;

(3) Activities which are part of the normal and regular conduct of the office or agency.

The state's Public Disclosure Commission has adopted administrative regulations aimed at clarifying the intent of the statute:

WAC 390-05-271 General Applications of RCW 42.17.130. (1) RCW 42.17.130 does not restrict the right of any individual to express his or her own personal views concerning, supporting, or opposing any candidate or ballot proposition, if such expression does not involve a use of the facilities of a public office or agency.

(2) RCW 42.17.130 does not prevent a public office or agency from (a) making facilities available on a nondiscriminatory, equal access basis for political uses or (b) making an objective and fair presentation of facts relevant to a ballot proposition, if such action is part of the normal and regular conduct of the office or agency.

WAC 390-05-273 Definition of Normal and Regular Conduct. Normal and regular conduct of a public office or agency, as that term is used in the proviso to RCW 42.17.130, means conduct which is (1) lawful, i.e., specifically authorized, either expressly or by necessary implication, in an appropriate enactment, and (2) usual, i.e., not effected or authorized in or by some extraordinary means or manner. No local office or agency may authorize a use of public facilities for the purpose of assisting a candidate's campaign or promoting or opposing a ballot proposition, in the absence of a constitutional, charter, or statutory provision separately authorizing such use.

The conclusion to be drawn from these regulations is that cities and towns should not publish promotional material urging a favorable vote in an annexation election. City employees should not use city facilities and resources to actively attempt to influence voter response.

However, a distinction may be drawn between promoting an annexation and merely providing factual information directed at enabling voters to make their own decisions based on factual data, rather than uninformed speculation. The annexation statutes specifically authorize a city or town to “provide factual public information on the effects of a pending annexation.” See RCW 35.13.350, 35.21.890, 35A.14.550, and WAC 390-05-271, -273, reproduced above.

If a private citizen group is involved, any legal ambiguities as to the information that can be provided may be avoided when the citizens group, rather than the city, prepares, finances, publishes, and distributes the annexation information pamphlets. Citizen groups may not only provide factual information, but also advocate positions. Any such group would be well advised to check with the Public Disclosure Commission (711 Capitol Way, Room 403, Olympia, WA 98504; telephone (360) 753-1111) early in its formation stages, to learn whether any campaign financing information or forms will be expected of the committee.

Chapter Four - Consequences of Annexation

I. Special Districts

Anticipating the consequences of annexations on special districts requires careful analysis on a district by district basis, since there are few general rules that apply to all districts. Some districts are not affected by annexations, others continue exercising jurisdiction only over areas not annexed, and still others may go out of existence altogether when all or parts of their territory are absorbed by cities.

In beginning such an analysis, it is desirable to prepare a list of the special districts that function in the area proposed for annexation. Among the major special districts to be considered are:

Fire protection districts
Water-sewer districts
School districts
Road districts
Port districts
Public utility districts
Cemetery districts
Hospital districts
Library districts

Because of the many differences in the statutes and legal precedents governing each kind of district, this publication will individually review the consequences of annexation on these major districts.

There are numerous other special purpose districts and limited governmental entities that may have been established in an area proposed for annexation, and accordingly should be included in a special district analysis, such as: flood control districts, ferry districts, park and recreation districts, county airport districts, mosquito control districts, and metropolitan municipal corporations. Since only a few of each of these types of districts operate within Washington State, the consequences of an annexation on them are not addressed in this report.

Working with a list of special districts, one can outline what the consequences of annexation will be for each district, what boundary changes will occur, whether and when the city will be responsible for the provision of new services, whether assets and liabilities of the districts will be subject to distribution, and other relevant matters.

All issues on the consequences of city annexation on special districts are not fully resolved by statutes, case law, or opinions of the Attorney General. Therefore, it may be helpful early in the annexation process for city officials to meet with administrators of potentially affected districts to resolve as many of these issues as possible and to reach an understanding, consistent with law, as to how the transfer of jurisdiction, if required, will occur.

Remaining issues may be appropriate to bring before a boundary review board, if one has been established within the county, or otherwise an annexation review board, if review is required. In addition to changes in city, town, and special district boundaries, a boundary review board is authorized to review the “assumption by any city or town of all or part of the assets, facilities, or indebtedness of a specialpurpose district which lies partially within such city or town.” RCW 36.93.090(2). Moreover, the board considers the delivery of municipal services as a factor in its review of proposals. RCW 36.93.170. More details on the boundary review board process are contained in Chapter Eight.

One matter that is never an issue in a municipal annexation is whether property removed from special district jurisdiction remains subject to that district's outstanding bonded indebtedness. It is generally true for all types of districts that the annexed property remains liable for retiring such indebtedness just as if the annexation had not taken place. Some statutes also require annexed property to remain subject to other, non-bonded, indebtedness. These statutes protect the integrity of bonds and the ability of a special district to retire indebtedness. If a district tax base were subject to shrinkage, districts could find themselves unable to meet their responsibilities. Future issues of bonds would then not be marketable, since repayment would not be assured.

Specific statutes relating to indebtedness, along with information helpful to analyzing the consequences of an annexation on each of the major districts, follows.

A. Fire Protection Districts

Automatic Removal of Territory

Annexation to a city automatically removes territory from a fire protection district and renders the annexing city responsible for fire protection in the annexed area. RCW 52.08.025. A fire protection district continues to service what remains of its district outside of the city. Although RCW 35.02.200 and RCW 35A.14.400 provide that when less than 60 percent of the real property valuation of the district is annexed, the district is to continue to provide fire protection to the annexed area as long as it continues to receive the regular property taxes it levied in the annexed area, that time period has been effectively eliminated by 2007 legislation that provides that cities that annex territory within a fire district begin receiving the levied but uncollected fire district property taxes no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation. RCW 35.13.270; RCW 35A.14.801.

If the area annexed includes all of a fire protection district, the fire protection district, for purposes of imposing regular property taxes, continues in existence until January 1st of the year in which the annexing city or town will collect property taxes imposed on the newly annexed area. The members of the city or town or governing body must act as the board of commissioners to impose, receive, and expend the property taxes. RCW 52.08.025.

Even after a district no longer receives property tax revenue from property annexed to the city, it may still provide fire protection to an annexed area by agreement between the district and the annexing city. Likewise, a city by contract may provide fire protection to the remainder of the district outside the city. The Interlocal Cooperation Act, chapter 39.34 RCW, contains a very broad grant of authority to cities and special districts to reach agreements with each other that best meet both of their needs. (See also RCW 52.12.031(3), which contains similar authority.)
Effect on District Assets

Since after annexation the annexing city becomes responsible for fire protection within the annexed area, statutes provide for an equitable division of the net assets,⁸ and in some cases liabilities, of the fire protection district based upon the percentage of the annexed value of the district that has been annexed to the city. If 60 percent or more of the assessed real property valuation of a fire district is annexed to a city, the city will own all of the district’s assets after it pays the district a sum equal to the percentage of the value of the real property in the entire district that remains outside the annexed area. (However, if the annexing city or town has been itself annexed by another fire protection district, that other district will be vested with ownership of the assets.) The payment is to be made within one year of the annexation, in cash, property, or contracts for fire protection services. RCW 35.02.190 and RCW 35A.14.380. The fire protection district may elect by a vote of the persons residing outside the annexed area to require the annexing city (or fire protection district) to assume responsibility for providing fire protection and for operating and maintaining district property, facilities, and equipment. If such an election is approved, the district must pay a reasonable fee to the city (or district) for the services it provides.

Also, under this 60 percent or more scenario, a proportionate share of the liabilities of the fire district at the time of the annexation, equal to the percentage of the total value of real property of the district that is annexed, must be transferred to the city. RCW 35.02.190.

If all of a fire protection district is included in the annexing city, all of the assets and liabilities of the district are to be transferred to the city (or fire protection district, if the district has annexed the city) upon annexation. Id.

If five percent or more but less than 60 percent of the area of a fire district is annexed to a city, the district maintains ownership of its assets. However, the district is to pay the city (in cash, properties, or contracts for fire protection services) a percentage of the value of its assets equal to the percentage of the value of the real property in the district that has been annexed into the city. This payment is to be made within one year, or within the time the district continues to collect taxes in the annexed area, which period has been effectively eliminated as a result of 2007 legislation (amending RCW 35.13.270; RCW 35A.14.801) that provides that cities that annex territory within a fire district begin receiving the levied but uncollected fire district property taxes no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation. RCW 35.02.200 and 35A.14.400.

If less than five percent of the area of the fire protection district is included in the area annexed, no payment is due the annexing city from the district, except in certain circumstances. RCW 35.02.205, RCW 35A.14.400. A transfer of assets must occur if, within 60 days of the annexation, the city or town adopts a resolution with a finding that it will incur a significant increase in fire suppression responsibilities, with a corresponding reduction of district responsibilities, as a result of the annexation, and the district concurs in the finding. An agreement for the transfer of assets must be entered into within 90 days of the district's concurrence. The agreement will take the increase and decrease of responsibilities into account, and will consider the impact of any debt obligation of the annexed or incorporated area. If the district does not concur in the city’s finding, or if an agreement is not reached within 90 days of the district's concurrence in the finding, the matter will be decided in arbitration. The arbitrator will decide whether a significant increase and decrease in responsibilities occurred and, if so, the percentage of district assets that will be transferred to the city or town. RCW 35.02.205.

As indicated above, the outstanding indebtedness of the fire protection district, bonded or otherwise, remains an obligation of the taxable property annexed to the city, just as if the annexation had not occurred. RCW 35.13.249; RCW 35.13.270; RCW 35A.14.500; RCW 35A.14.801.

If a fire district has issued non-voted, limited tax general obligation bonds, and a portion of the district is subsequently annexed by a code city, the fire district retains the authority to levy a tax on property in the annexed area for the purpose of repaying its existing bond obligations. AGO 2006 No. 9.
Transfer of District Employees

Annexation of any portion of the territory of a fire district triggers requirements concerning employment of fire district employees that are terminated as a direct consequence of the annexation. Any such employee may transfer to the civil service system of the city if he or she can perform the duties and meet the minimum qualifications of the position to be filled. This transfer is subject to the requirements and limitations in RCW 35.13.225 and .235, which are applicable to all cities and towns.

B. Water-Sewer Districts

Unlike the situation involving fire protection districts, there are no automatic consequences when a city annexes an area that includes all or part of a water-sewer district or a combination of both. Upon annexation, the city may either allow the district to continue operations as before, or it may assume jurisdiction over the district in whole or in part, depending upon the circumstances. Ch. 35.13A RCW. Of course, a city may assume jurisdiction over a water-sewer district any time after annexation. Since assumption of jurisdiction over a water-sewer district is not a consequence of annexation, it will not be addressed in this publication. See chapter 35.13A RCW for procedures to assume jurisdiction.

C. School Districts

In most annexations, no school district boundary changes result. The school district statutes specify several categories of annexations that may result in school district boundary changes, but they also allow for a great deal of discretion in making any changes, so that school district boundaries will be structured to reflect community needs. Even when school district boundary changes occur, it is another school district that assumes educational responsibilities. Cities do not assume school district functions.

A school district boundary change may occur when a city located in one school district annexes territory in a second school district, when the second school is very small (i.e., it operates a school or schools on one site only or operates only elementary schools on two or more sites). When this happens, the educational service district superintendent declares the newly annexed territory that had been included in the second school district to be part of the school district containing the city. If the territory that changes school districts contains a school building ofthe second school district, then the educational service district superintendent also presents a proposal to the regional school districting committee for the disposition of some or all of the remaining territory of the second school district. RCW 28A.315.250.

Another instance in which there may be a change in school district boundaries arises when the annexation involves a town, and the school district in the area annexed to the town operates, on more than one site, one or more elementary schools and one or more junior high schools or high schools. In this case, the regional school districting committee, in its discretion, is to prepare proposals for the school district, which includes the town, to annex the territory that the town has annexed. The school districting committee is also to prepare proposals for any or all of the territory remaining in the second school district to be annexed to the school district in which the town is located or to another school district. Alternatively, if 75 percent of the registered voters in the annexed territory petition for the transfer of the annexed territory to the school district in which the town is located (and no school or school site is located within the territory), the educational service district superintendent is to declare the territory to be part of the school district containing the town. RCW 28A.315.250.

School district statutes also provide for the transfer of territory between school districts or the annexation of part or all of a school district by another district. RCW 28A.315.160 et seq. Thus, if an annexation by a city is not one of the small classes of annexations that otherwise leads to a school district boundary change but yet leads to the need for an adjustment of school district lines, procedures are available for such adjustments to be made.

The educational service district superintendent may be contacted for additional information on how laws on school district boundaries may apply in particular instances. As previously stated, however, in the overwhelming number of annexations, school district boundaries do not change as a result.

D. Road Districts

County road districts are established by county legislative bodies to aid in the administration of the county road construction and maintenance program. By statute, county road districts embrace territory outside of cities. RCW 36.75.060.

When a county road is part of an area annexed by a city, the road becomes a city street and the city assumes full responsibility for it. Evergreen Trailways, Inc. v. Renton, 38 Wn.2d 82 (1951). The city also becomes entitled to receive, when collected, the road district taxes that have been levied but not yet collected on property within the annexed territory. When collected by the county treasurer, these funds are to be paid to the city and placed in the city street fund. RCW 35.13.270, RCW 35A.14.801, and AGO 61-62 No. 16. However, road district taxes that were delinquent before the date of annexation are to be placed in the county road fund. RCW 35.13.270, RCW 35A.14.801.

A code city does not receive the portion of the county road district property taxes that are attributable to special assessments due on behalf of annexed property. RCW 35A.14.801. The statutes are silent on the disposition of special assessments collected from territory annexed to other classes of cities, but it may be presumed that these funds would also be retained by the county for purposes of retiring the outstanding indebtedness.

E. Port Districts

Port district boundaries may be either coextensive with the county's boundaries, or may include an area less than the entire county. State law does not require city and town boundaries to be observed when port district boundaries are established or altered. Thus, when a port district is coextensive with a county, all cities and towns in the county are within the port district. Where an area less than the entire county comprises the port district, the district boundaries may or may not include particular cities and towns. See chapter 53.04 RCW.

A city annexation does not alter port district boundaries. However, where a port district has been established in an area less than the entire county, a city annexation may result in part of a city being included within the district, while the remainder of the municipality is excluded. As a consequence, some city property owners would be responsible for paying the port's property tax assessment, while others would not. To correct this situation, state law provides a procedure to add territory to an established port district. The procedure requires a favorable majority of the votes cast in an election in the area proposed for inclusion. RCW 53.04.080 - .100. However, the statutes do not provide an expeditious procedure for territory to be removed from a port district.

F. Public Utility Districts

Statutes, court decisions, and opinions of the attorney general deal directly with some of the questions that arise with respect to public utility districts (PUDs) as a consequence of annexation, but they leave other questions unanswered. Generally, a municipal annexation will not cause changes in PUD jurisdiction. When a PUD already includes both the annexing city and the territory to be annexed, no changes occur due to the annexation. Likewise, when a city that operates its own electric utility annexes territory served by a county-wide PUD, the district may continue to serve the annexed territory. See AGO 65-66 No. 33. This is true even though the annexing city also has the right to provide the same service in the same territory.

A PUD may be established county-wide, in which case it includes all of the cities within the county (even though city property in cities having their own utilities may not be subject to all or some of the PUD property tax). PUDs may also be established in areas smaller than an entire county. In this case, their precise boundaries should be ascertained as a preliminary step in analyzing whether a municipal annexation will impact a PUD.

Laws governing PUDs are ambiguous on some issues that arise in an annexation. However, the courts and the attorney general’s office have addressed some questions concerning city and PUD interrelationships. The state supreme court held in PUD No. 1 of Pend Oreille County v. Town of Newport, 38 Wn.2d 221 (1951), that two municipal corporations may serve the same geographic area simultaneously in the exercise of proprietary functions, such as providing electrical service. However, another case has held that when a city had established, owned, and operated its own utilities before the establishment of a county-wide PUD, property within the city could not be subjected to the portion of the PUD property tax used to provide duplicate utilities for the remainder of the PUD. PUD No. 1 of Whatcom County v. Superior Court, 199 Wash. 146 (1939). A 1948 attorney general's opinion concluded that, under the laws in effect at the time, “no means exist by which an area once properly included within a public utility district may withdraw therefrom.” Thus, an area served by a private power company remained subject to the public utility district's property tax levy, even though it did not receive benefit from the district. AGO 1948 No. 101.

The statutes do not directly provide for changes in PUD boundaries because of a city annexation. However, should a municipal annexation bring about the need for PUD boundary changes, existing PUD boundary change statutes could be invoked. For example, PUDs may add additional territory and may consolidate with other PUDs. RCW 54.32.010. Complete disincorporation is also possible. RCW 54.08.080. However, as stated above, annexation by a city will generally not bring about any changes in PUD boundaries and functions.

G. Cemetery Districts

Cemetery districts may include any city with a population of less than 10,000. RCW 68.52.210. When both an annexing city and an area proposed for annexation are included in a cemetery district, the annexation will have no consequences on the district boundaries.⁹

However, when either an annexing city or the area proposed for annexation is included in a cemetery district, but the other is not within the district, questions may arise for which there are no ready answers. The statutes do not contain provisions as to (1) property within a cemetery district annexing to a city not within a cemetery district, or (2) the reverse situation, i.e. property not within a cemetery district annexing to a city that is part of a cemetery district. Moreover, the statutes do not contain provisions for cemetery districts to expand or to delete territory, even when an annexation is not in the picture. Because of the absence of authority to the contrary, the practice has been that a municipal annexation does not result in changes to a cemetery district, and the existence of the district has no bearing on the city's annexation.

If review of an annexation is required, either by a boundary review board, ad hoc annexation review board, or county annexation review board for code cities, then issues involving a cemetery district may be appropriate to bring before it. Otherwise, pending the enactment of legislation to clarify these consequences of annexation, judicial proceedings appear to be the readiest means for ascertaining the impact of an annexation on a cemetery district.

H. Public Hospital Districts

Public hospital districts can include or exclude cities, and may be comprised of several counties, be coextensive with a county's boundaries, or be less than an entire county. RCW 70.44.020 -.035.

The statutes governing public hospital districts are much the same as those for cemetery districts. They do not directly deal with many of the questions that arise when a city annexesterritory situated within a public hospital district. Because of this lack of authority, it is generally understood that a municipal annexation will have no impact on hospital district boundaries. The result of an annexation can be that only part of the city is included in a district, or that two public hospital districts each have jurisdiction over portions of one city.

I. Library Districts

Upon annexation of territory consisting of all or part of a library district to a city or town, that territory automatically is withdrawn from the district. See AGO 1949 No. 54. Library services in the area annexed then become the responsibility of the city or town. A city may, however, contract with a library district for library services in part or in all of the city, or it may annex to the library district. (If a city annexes to a library district, its levy lid becomes $3.60 per thousand dollars of assessed value (up from $3.375 per thousand), less any regular levy (up to $.50 per thousand dollars assessed value) of the library district. RCW 27.12.390.)

Legislation enacted in 2007 provides that cities that annex territory within a library district begin receiving the levied but uncollected library district property taxes no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation. Taxes that are delinquent at the time of the annexation and the pro rata share of the current year levy budgeted for general obligation debt, when collected, are paid to the library district. The district�s bonded indebtedness remains an obligation of the taxable property annexed as if the annexation had not occurred. RCW 35.13.270; RCW 35A.14.801.

Summary

Annexation to cities and towns will result in boundary changes for fire protection district, road district, and library district boundaries. Changes in water-sewer district boundaries do not result directly from an annexation. It is probable that no boundary alterations will result to school, port, public utility, cemetery, and hospital districts. Yet, due to the complexity of state statutes and the variety of local circumstances, cities and towns contemplating annexation may want to review the situations involving the special districts that potentially may be affected by an annexation.

II. Franchises

As of the effective date of an annexation, certain utility and transportation franchises are automatically canceled.¹⁰ However, the annexing city must grant the holder of a canceled franchise or permit another franchise to continue the business within the annexed territory for a term of at least seven years.¹¹ The annexing city may not allow the extension of similar or competing services to the annexed territory, unless it can show that the preexisting franchise or permit holder is unable or has refused to adequately service the annexed territory at a reasonable price. RCW 35.13.280 and 35A.14.900.

There are special rules for solid waste franchises. A solid waste franchise in an area annexed is not automatically cancelled upon annexation. After annexation, the Washington Utilities and Transportation Commission (WUTC), which has jurisdiction over solid waste franchises in unincorporated territory, continues to regulate solid waste collection in the area annexed until the city notifies the WUTC in writing of its decision to either contract for solid waste collection in the annexed area or to provide for that collection itself. If and when the city provides this notification to the WUTC, then the existing solid waste franchise is canceled and the city must issue the franchisee a new franchise to continue business in the annexed area for the remaining term of the original franchise or not less than seven years, whichever is the shorter period. As with other franchises, there are restrictions on the ability of a city to provide similar or competing services.

The city does have the option of purchasing the franchise or business either by a negotiated sale or by condemnation. The payment through the condemnation process would include an amount to cover the damages for the loss of the franchise. Id.

Another statute may also impact franchises or permits in annexations subject to review by a boundary review board. RCW 36.93.190 provides:

For a period of ten years from the date of the final decision [of the boundary review board], no proceeding, approval, action, or decision on a proposal or an alternative shall be deemed to cancel any franchise or permit theretofore granted by the authoritiesgoverning the territory to be annexed, nor shall it be deemed to supersede the application as to any territory to be annexed, of such construction codes and ordinances (including but not limited to fire, electrical, and plumbing codes and ordinances) as shall have been adopted by the authorities governing the territory to be annexed and in force at the time of the decision.

It is unclear what construction should be placed on this statute in light of seemingly contrary statutes summarized above. The appellate courts have not yet construed this statute.

III. Transfer of County Sheriff's Employees

Statutes enacted in 1993 require and establish procedures for the lateral transfer to a city of qualified county sheriff's office employees who would otherwise be laid off as a result of the annexation of unincorporated territory into that city. RCW 35.13.360, .370, .380, .390, .400. As discussed below, the requirements do not, however, mean that the city must immediately put on the police department payroll all transferring employees. These requirements and procedures apply to all cities and towns.

A. When Authorized (RCW 35.13.370)

A sheriff's office employee may transfer his or her employment to the police department of a city annexing unincorporated territory in the county if the employee:

Was, at the time of the annexation, employed exclusively or principally in performing the powers, duties, and functions of the county sheriff's office;
Will, as a direct consequence of the annexation, be terminated from county employment; and
Can perform the duties and meet the city's minimum standards and qualifications of the position to be filled within the city police department.

B. Procedure for Transfer (RCW 35.13.380(1), RCW 35.13.400)

An eligible employee of the county sheriff's office may transfer into the city’s civil service system by doing the following:

Filing a written request with the civil service commission of the city, within 90 days of the effective date of the annexation; and
Giving written notice to the county legislative authority.

Upon city receipt of the request, the transfer to the city’s civil service system must be made.

C. City Responsibilities (RCW 35.13.380(2))

The city is not required to put all transferring employees on the police department payroll. It is required to put on the payroll only as many employees as the city determines are needed to provide an adequate level of law enforcement service. It is within the city's discretion to determine what is an adequate level of law enforcement service.
The employees needed by the city and placed on the city payroll must be taken in order of seniority.
Transferring employees who are not immediately placed on the city payroll are placed in order of seniority at the top of the list of their respective class or job listing, regardless of rank in the civil service system, so that they must be hired first as vacancies arise. The city retains the right to select its police chief regardless of seniority.
Transferring employees not immediately placed on the city payroll must be placed on the city reemployment list for a period not to exceed 36 months, unless a longer period is authorized in a collective bargaining agreement between representatives of the police department and sheriff's office employees and the police department and sheriff's office. The 36-month period begins on the effective date of the annexation.
The city civil service commission must enact rules necessary for the orderly integration of county sheriff's office employees who transfer to the city as a consequence of annexation. RCW 35.13.390.

D. County Responsibilities (RCW 35.13.380)

When an unincorporated area is annexed to a city and layoffs in the county sheriff's office will result, the sheriff's office must notify affected employees of their right to transfer.
Upon receipt of the employee's notice concerning transfer to the city police department, the county must transfer to the city civil service commission a record of the employee's service with the county, which must be credited by the city to the employee as part of his or her period of employment with the police department.
The county is responsible for compensating the employee for benefits accrued while employed by the sheriff's office, unless a different agreement is reached between the county and the city.
The county sheriff's office must rehire former employees placed on the city's reemployment list before it can hire anyone else to perform the same duties previously performed by the laid-off employees.

E. Conditions of Transfer (RCW 35.13.380(1))

The transferring employee who is placed on the city police department payroll will:

Be on probation for the same period as are new employees in the same classification;
Be eligible for promotion after completing the probationary period in compliance with civil service rules pertaining to lateral transfer based upon combined service time;¹²
Receive a salary at least equal to that of other new employees in the same classification; and,
Have all the rights, privileges, and benefits (e.g., sick leave and vacation) within the civil service system that he or she would have been entitled to had he or she been a member of the police department from the beginning of his or her employment with the county.

IV. Financial Impacts

Every annexation will have some financial impact on the annexing city. It may be positive (anticipated new revenues are greater than the additional service costs) or negative. It may be small (in which case it will not weigh heavily in the decisionmaking process) or it may be large. As part of an annexation study, every city needs to do at least a “back of the envelope” calculation to determine whether an additional, more detailed analysis should be done.

A. Revenue

The revenue increases that will come to the city treasury because of an annexation depend substantially on the character of the area to be annexed. Factors such as the population of the area, its assessed valuation, and current and future land use patterns will affect most of the city's current revenue sources. In making its estimates, the city finance department needs to be aware that the date chosen for the annexation will have an impact on when new revenues are received and, in some cases, how much is received. This date is particularly important for property tax and sales and use tax revenues.

Timing of Property Tax Receipts

The property tax has the longest lag between annexation and the receipt of the first tax revenues. The boundaries of a city for property tax purposes are the “officially established boundaries” that exist on August 1 of the year in which the property taxes are levied.¹³ RCW 84.09.030. Thus, a city may levy taxes during the current year for receipt during the next year for any annexation that is officially completed by August 1. If the annexation is completed after August 1, the city will have to wait until the following year to levy the tax to apply in the annexed area. For example, if an annexation is completed by August 1 of Year 1, the city can levy taxes in November of Year 1 and receive its first substantial property tax revenue after April 30 of Year 2. If the annexation is not completed until August 2 (or later) of Year 1, the city will have to wait until November of Year 2 to levy its property tax and will not receive its first revenues until the spring of Year 3. Upon annexation, the city does receive the revenue from the levied but uncollected county road district taxes (RCW 35.13.270, 35A.14.801), but this may be less money than the city would get if it were levying its own tax. Also, the road district tax revenues must be placed in the city street fund rather than the general fund, and the city might find that a drawback. For property tax purposes, it definitely pays to plan ahead when considering an annexation.

As a result of 2007 legislation, cities that annex territory within a fire district and/or a library district and that have not been annexed to such district(s) (in which case the territory is withdrawn from those districts) begin receiving the levied but uncollected fire and/or library district property taxes no less frequently than by July 10th for collections through June 30th and January 10th for collections through December 31st following the annexation. Delinquent property taxes and the pro rata share of the current year levy budgeted for general obligation debt, when collected, are to be paid to the fire and/or library district. RCW 35.13.270; RCW 35A.14.801.

To receive the levied but uncollected county road taxes and, if applicable, uncollected fire and library district property taxes beginning on the effective date of the annexation, the city must notify the county treasurer and assessor of the annexation at least 30 days before the effective date. The notice must be by certified mail and must include a list of annexed parcel numbers. RCW 35.13.270, 35A.14.801.
Timing of State-Shared Revenues

The state-shared revenues (gasoline tax, liquor board profits, and the liquor excise tax) are distributed to cities on the basis of population. For a city to have its population adjusted for an annexation for purposes of state-shared revenue distributions, the Office of Financial Management (OFM) must certify the annexation, after which it will notify the appropriate state agencies of the population change. For purposes of state-shared revenues, the revised city boundaries and the new population are not recognized until the date that OFM approves the annexation certificate submitted to it by the city.

To initiate this certification process, a city must send an annexation certificate and certain required supplemental documents¹⁴ within 30 days of the annexation�s effective date to OFM's Forecasting Division. See RCW 35.13.260; 35A.14.700. (See Chapter Six, Section I.O., or Chapter Seven, Section I.M. for the needed address and telephone number.) OFM then processes the documents for certification and, following certification, files the approved annexations on a quarterly basis with the state agencies that make revenue distributions to cities. The relevant quarterly revenue distribution periods begin on January 1, April 1, July 1, and October 1.

However, in order for a city to receive state-shared revenues in the coming quarter that reflect its new population, OFM and the relevant state agencies need to know about the annexation population added well before the beginning of these quarterly periods. OFM must file revised populations with other agencies at least 30 days prior to the revenue distribution quarters. RCW 35.13.260; 35A.14.700. So, OFM files the certified/approved annexations with these agencies on the last working days of November, February, May, and August.

For OFM to make timely quarterly filings to notify other agencies, OFM must receive the annexation certificate and required supplemental documents even sooner. OFM has indicated that, for an annexation of less than 100 people, one week before the quarterly filing date is probably soon enough. Annexations of 100 to 500 people should be submitted two weeks before the filing date. Annexations of 500 to 10,000 people should be submitted to OFM at least a month before the quarterly filing date. For those with a population of over 10,000, OFM must receive the necessary paperwork at least six weeks in advance of the filing date. OFM requests that cities call them as soon as they begin to consider annexing a large population�processing these annexations requires a workload adjustment.

Also, current OFM processing includes having the Department of Transportation, Cartography Section, review the legal description and map for potential errors. Mistakes in the legal description must be corrected by an amending ordinance before OFM can finish processing the annexation. Incorrect legal descriptions must be corrected before receiving OFM approval. Annexations are not filed until all requirements are met. Revenues may be lost because revenue distributions are not backdated. See Certification of Annexation: Procedures at http://www.ofm.wa.gov/pop/annex/annexcert/annexinfo.pdf.

An example may be helpful. Assume that an annexation involves 2,000 people and the city submits the necessary annexation documents to OFM on or before October 30. That gives OFM a month to work with the city before the November 30 date by which OFM needs to notify the other state agencies. The city should receive its additional state-shared revenues beginning in the first calendar quarter of the year, which begins January 1. If OFM does not receive the annexation documents until November 5, say, chances are that, since the annexation is greater than 500 people, OFM may not be able to include it by the November 30 �deadline,� and the city may have to wait until the second quarter to begin receiving its additional distributions for the annexed area.
Timing of Sales and Use Tax Receipts

Sales tax changes may take effect only on January 1, April 1, July 1, or October 1.17 The term �sales tax changes,� for purposes of this new legislation, includes changes resulting from annexation. See RCW 82.14.055. Local governments must provide notice to the Department of Revenue (DOR) at least 75 days before the change takes place. RCW 82.14.055 does not specify what the �notice� to DOR must consist of, but a copy of the annexation ordinance would likely be necessary. DOR suggests fax or e-mail notification followed-up by a mailed paper copy.

Cities may want to take these dates into account when planning annexations. To maximize its sales tax revenue from a newly annexed area, the effective date of an annexation should be the first day of a quarter - January 1, April 1, July 1, or October 1. (Of course, if the area to be annexed has a low sales tax base, these dates are of no significance.)

Here are some examples of when sales taxes will be received for various dates of annexation.
1. Effective date of annexation, January 1. Taxes collected in the annexed area in January are coded to the city. The retailers remit the taxes to DOR by February 25, and the city receives its first distribution on March 31.
2. Effective date of annexation, February 1. The city cannot levy its sales tax in the annexed area until April 1, the first date of the quarter after the annexation takes place. Taxes collected in April are remitted to DOR on May 25, and paid to the city on June 30.
3. Effective date of annexation, March 1. The city cannot levy its sales tax in the annexed area until April 1, the first date of the quarter after the annexation takes place. Taxes collected in April are remitted to DOR on May 25, and paid to the city on June 30.

A city should provide notice to the Department of Revenue, Local Sales Tax Section, at the following address so that the department can make certain that the jurisdiction receives its proper amount in the local distribution of the sales and use tax:

The information that a city should provide includes:

The effective date of the annexation;
A legal description of the area;
A map of the annexed area; and
A copy of the annexation ordinance.

The city is responsible for informing the businesses in the annexed area about their new tax code and new tax rate. The city should give the department as much information as possible on the names of businesses in the annexed area, their addresses, and their unified business identifier (UBI). This information will assist the department in checking its records to make certain that the businesses are reporting properly and that the city is getting the proper amount of taxes from the annexed area.

B.Costs of Annexation

Analyzing annexation costs to a municipality is, at best, difficult. There are no magic formulas that can be easily manipulated to arrive at an accurate prediction for all annexations of what the costs will be—either in the short term or the long term. Each annexation has unique characteristics. Short term costs tend to vary with the immediate need for services, such as the anticipated costs of police, fire, planning, utility, and street maintenance. Long term costs may include the capital improvement obligations a city may assume after an annexation. The current status of land development has substantial bearing on the cost element, together with size, character of the population, and unique municipal concerns, if any, of the area to be annexed.

To anticipate total annexation costs, city department heads are typically asked to develop estimates of what the increased cost, if any, will be to the department when it properly integrates services to the annexed area into the existing program. This should be done both on a short term and a long term basis, taking the Plan of Service (Chapter Two, Section V) into account. These cost estimates may be particularly useful when the department heads have surveyed the area and are well acquainted with its unique characteristics. For example, the chief of police may be able to estimate, based on professional experience, whether additional police officers or patrol cars will be required. Existing patrol cars may be adequate to serve the annexed area in the short term, but the additional duty may require equipment replacement sooner than otherwise anticipated. Likewise, the parks and recreation director may estimate that a short term consequence of annexation may be more participants in recreation programs, but a long term consequence will be the need to procure and develop a new city park to meet the needs of the area annexed. The city engineer may provide estimates on the routine costs of street and utility maintenance, and also on the cost of major capital improvements such as street paving or utility installation. Costs of providing other municipal services may be similarly analyzed. Not only does this approach to anticipating annexation costs result in knowledgeable cost estimates, but department heads can begin planning for provision of services after the annexation is complete.

Another, perhaps less accurate, method of systematically analyzing the cost of annexation is to take the adopted city budget for the current year, and analyze for each item whether the needs of the territory considered for annexation will increase previous allocations. However, estimating requirements solely on population or area may be inaccurate, unless local conditions are also considered. Applying established formulas to cost calculations may yield only approximate information.

V. Costs of Not Annexing

Although the costs of annexation may be substantial, the costs of not annexing territory that comprises part of a core city's urban area may also be surprisingly high. A study published in July, 1973, entitled “Economic Implications of Fringe Developments Adjacent to Major Cities”¹⁵ analyzed the cost to the city of Eugene, Oregon, of services it provided to an unincorporated fringe area known as River Road, a contiguous community having 7.8 percent of the total Eugene urbanized area population. In doing so, the study developed a methodology for analyzing these types of costs that could be applicable in other communities. The conclusion was that the City of Eugene was providing a subsidy to the River Road community in six of the seven services studied. The subsidies were through the following:

Fire department (providing fire protection at a contractual price which was less than actual cost)
Police department (providing crime protection/prevention to fringe residents working in and using city; cost of arresting and processing fringe residents committing crimes in city)
Library (in spite of a charge for out-of-city book borrowers, library operating expenses allocated to the out-of-city library users exceeded revenues collected from them)
Special care centers, such as detoxification halfway house, socio-medical aid stations (cost of providing services to fringe community residents)
Park and recreation facilities (use of city parks and recreation programs, as fringe area had not developed its own facilities)
Public works department (oversizing utilities to meet future growth needs)

The one service area not reporting a subsidy was the city airport, since user fees covered costs. However, it was thought that when additional capital expenditures were made, funded by the city, the city would then be subsidizing the fringe community in this service also.

Thus, not only is annexation sometimes expensive to a core city, non-annexation may be equally costly. This may be true particularly when a city is bordered by an urban area that draws upon the services and facilities of the core city, even when the fringe area pays for some of the benefits it receives. All of the services and facilities provided by a core city simply cannot be billed to fringe residents; it is difficult to collect actual expenditures for those services that do lend themselves to some cost recovery.

Thus, the cost issue in an annexation is complex. It is generally agreed that cities should not annex territory solely because the area may provide additional city revenue. On the other hand, municipal officials may easily justify an annexation on grounds unrelated to cost in instances in which it is anticipated that the annexed area may not initially pay its own way. While the cost issue is certainly important to an annexing city, it is by no means the only issue to be considered in determining the ultimate question of whether or not an area should be annexed to a city or town.

Chapter Five - Preliminary Matters

I. State Environmental Policy Act

The 1994 legislature eliminated the requirement that annexations are subject to review under the State Environmental Policy Act (SEPA). RCW 43.21C.222. Nevertheless, planning and zoning decisions made in conjunction with an annexation are subject to SEPA review.

II. Comprehensive Planning/Zoning

Different considerations are involved for a city with respect to planning and zoning for areas to be annexed or potentially annexed depending upon whether or not the city is required to plan under the Growth Management Act (GMA), chapter 36.70A RCW.

A. Cities Subject to the GMA: Comprehensive Planning for Annexation Areas

As noted in Chapter One, GMA counties must designate urban growth areas (UGAs) that, among other things, define the territorial extent of annexation by cities within the counties. Since the GMA contemplates that cities will generally be the providers of urban-type services and that urban-type services will be provided within urban growth areas in conjunction with urban growth, GMA cities must include within their comprehensive planning process areas of potential annexation, i.e. their UGAs. However, since the UGAs will consist of unincorporated territory, the counties still retain jurisdiction. Consequently, the GMA requires that counties adopt, in cooperation with the cities in the counties, county-wide planning policies that must include, among other things, “policies for joint county and city planning within urban growth areas.” RCW 36.70A.210(3)(f). The Department of Economic, Trade, and Community Development (formerly the Department of Community Development) recommends that cities and counties enter into interlocal agreements to establish joint planning responsibilities within UGAs. Such agreements should address key issues such as:

Sewer system connection and septic tank policies;
Water rights, water system connection policies, and water supply for various uses;
Zoning, subdivision, and development design standards;
Development review procedures;
Water and sewer service areas;
Stormwater management practices;
Transportation concurrency and level of service;
Capital facilities planning and financing;
Densities within and outside UGAs;
Relationship to special districts;
Joint planning;
Annexation policy;
Relationship to Indian tribes, if appropriate;
Critical areas and resource lands protection; and
Neighborhood preservation.¹⁶

The comprehensive planning process under the GMA should, thus, provide for the coordination of a city's planning and annexation policies and a framework for a city's annexation efforts.¹⁷

B. Cities Not Subject to the GMA: Comprehensive Planning for Annexation Areas

Cities are authorized under RCW 35.13.177 and 35.13.178 (RCW 35A.14.330 and 35A.14.340 for code cities) to prepare a comprehensive land use plan and/or zoning regulation¹⁸ for areas that the city might reasonably expect to annex at any future time. Preparation of the comprehensive plan or zoning regulations for future annexations is essential in a city that will want to adopt meaningful zoning measures for its new territory simultaneously with annexation. If appropriate zoning provisions are not adopted at the time of annexation, it is possible that uses of land may become established in a newly annexed territory that are incompatible with neighboring uses and with sound land use management in the city.

Although the statutes speak of adopting a comprehensive plan for areas that may be annexed in the future, the comprehensive planning for future annexations should be integrated with the existing city comprehensive plan. The statutes (RCW 35.13.177 and RCW 35A.14.330) do provide a list of matters (not included here) that may be included within a comprehensive plan or, for code cities, a zoning regulation for future annexation areas. However, these do not differ appreciably from those matters identified in the planning enabling acts (chapters 35.63 and35A.63 RCW), and they should not be interpreted as imposing any different comprehensive planning or zoning requirements for future annexations.

However, the statutes authorizing planning and zoning in future annexation areas allow cities to provide in the plan or regulations for a time interval following an annexation during which the ordinance or resolution adopting the plan or regulations must remain in effect before they may be amended, supplemented, or modified.¹⁹

C. Procedure for Adoption of Comprehensive Plans and/or Zoning Regulations for Future Annexation Areas - All Cities

The annexation statutes establish specific procedures for adoption of comprehensive plans and/or zoning regulation for areas to be annexed in the future. These requirements supersede those that apply generally to adoption of plans or regulations that are identified in the planning statutes, but they actually differ only with respect to the number of hearings and to filing requirements. Thus, if a city is adopting a new comprehensive plan under the GMA that addresses territory included in the UGAs, it is advisable that the adoption procedures comply with those identified below.

Hearings (RCW 35.13.178, RCW 35A.14.340)

After a proposed comprehensive plan or zoning regulation is prepared, the legislative body of the city must hold at least two public hearings on it. These hearings must be held at least 30 days apart.
Notice (RCW 35.13.178, RCW 35A.14.340)

Notice of each hearing must be published in a newspaper of general circulation in the annexing city and in the area to be annexed. The notice must give the time and place of hearing.
Filing, Certification, and Recording (RCW 35.13.178, RCW 35A.14.340, RCW 35.63.100, RCW 35A.63.072)

A copy of the ordinance or resolution adopting the proposed plan, any part of the proposed plan, or any amendment, together with any map referred to or adopted by the ordinance or resolution, must be filed with the county auditor and the city clerk (or, in code cities, other “appropriate official”).

The ordinance, resolution, and map must be duly certified as a true copy by the clerk of the annexing city.

The county auditor is to record the ordinance or resolution and keep the map on file.

D. Coordination of Adoption Procedures with Other Annexation Procedures

Questions frequently arise as to how the foregoing procedure may be coordinated with other sections of the annexation laws. These questions arise in situations where an annexation is proposed and the city involved has not previously provided for comprehensive planning and zoning regulations to apply to the proposed annexation area. While each situation must be individually analyzed, there is a time, fairly soon after an annexation is initiated, when the annexation procedures are too far advanced to allow for a “time-out” during which a comprehensive plan/zoning regulation for the area proposed for annexation can be prepared. For example, if the petition method is used for an annexation (which is the case in a large majority of annexations), the statutes require the legislative body to set a date, not later than 60 days after the filing of the initial ten percent notice of intent to commence annexation procedures, for a meeting with the parties initiating the annexation. RCW 35.13.125 and RCW 35A.14.120. The governing body at this meeting makes a preliminary decision as to whether it is interested in the proposed annexation and, if so, whether it will require the simultaneous adoption of a comprehensive plan/zoning regulation if one has been previously prepared and filed. Thus, under a strict interpretation of the statutes, the preplanning/prezoning must have been completed prior to the first meeting between the initiators of the annexation and the legislative body.

However, as noted above, prezoning statutes require at least two public hearings, at least 30 days apart, with proper notice of the hearing published in a newspaper before the hearings are held. If a comprehensive plan/zoning regulation has not been prepared and filed before the annexation is initiated, the city must take immediate action after receipt of the annexation notice of intent to prepare the plan/zoning proposal, schedule and give notice of the first hearing, hold the hearing, schedule and give notice of the second hearing, hold the hearing (at least 30 days after the first hearing), adopt the comprehensive plan/zoning regulation, and file it. This is all to be done before the legislative body meets with the initiators of the annexation, which is to be within 60 days after the filing of their notice of intent. It is highly unlikely that a city could comply with this timeline.

Cities can avoid this problem by preplanning and prezoning for all areas surrounding their boundaries that are logical growth directions of the city. GMA cities are essentially required to do this. The statutes on preplanning and prezoning permit the utilization of the procedures outlined above for “any area which might reasonably be expected to be annexed by the city or town at any future time.” RCW 35.13.177; see also RCW 35A.14.330. There is no requirement that an annexation proposal be imminent before consideration is given to planning and zoning. The most satisfactory use of the prezoning authority permits completing orderly planning and zoning before specific annexation proposals are presented.

E. Zoning for Annexation in Areas Not “Prezoned”

The foregoing procedures are directed at having proper zoning prepared prior to annexation, to be in place simultaneously with annexation. However, frequently the procedure outlined is not utilized, since the time requirements of the various statutes may be impossible to reconcile in individual cases. What happens in these cases? Cities now take several approaches to zoning newly annexed areas that have not been preplanned and prezoned. (Presumably, GMA cities that have complied with the planning and zoning requirements of the GMA will have no need for these approaches.)

Some cities provide, by ordinance, that all newly annexed territory that is not otherwise zoned shall be automatically zoned into the city's least dense residential zone, or into a general“holding” zone. This approach avoids having property being annexed into a city with no zoning designation. An example is 17.88.010 of the Gig Harbor Municipal Code:²⁰

Any lands annexed to the city...shall be deemed to be included in the zoning map as being in the R-1 residential district . . . . Within 60 days following annexation, the planning commission shall hold a public hearing to determine the best application of this title to the annexed territory. Following the hearing, the commission shall make its recommendation to the city council for the zoning of the area; provided, however, any land which has been or is included in a comprehensive land use plan provided for in the following provision and adopted pursuant to RCW 35.13.177 and RCW 35.13.178 shall be annexed with the zoning district classification as provided for in such comprehensive land use plan.

An ordinance such as this has the advantage of avoiding a time period in which no zoning is applicable to a newly annexed area. Moreover, it requires the city to take action soon after annexation to properly commence the zoning process.

However, automatic designation of a temporary zone may also have significant drawbacks. Any one zone may be entirely inappropriate to a particular tract, although that fact may not present a problem if the city acts quickly after annexation to change the zone to one more appropriate. Another drawback is that the automatic change from previous county zoning effectively constitutes a rezone, subject to specific legal, procedural requirements. The guidance of the city attorney is important in dealing with these issues.

Another approach to the question of temporary zoning following annexation is to provide, by ordinance, that the zoning regulations of the county shall remain applicable pending further review and rezoning in due course by the city. Again, a time limitation on the duration of the county zoning carry-over is desirable, since it requires the city to take action almost immediately to bring the annexed area under its own zoning ordinance. This approach avoids rezoning at the time of annexation.

Nevertheless, there are also potential legal problems with this approach. First, it is not specifically authorized by state law. Second, if the county's zoning regulation is to become part of the city's ordinance and is to be enforced by city personnel, even temporarily, it may be argued that the actual zoning provisions of the county code should be incorporated into the city ordinances. This can be done by adopting the applicable county zoning provisions pursuant to the adoption by reference statutes (RCW 35A.12.140, RCW 35A.13.180 and RCW 35.21.180). The alternative would be to enact an ordinance containing, word-for-word, each relevant provision of the county zoning regulation. In any event, an ordinance adopting prior county zoning should stress the temporary, and perhaps emergency nature of the regulation. The city attorney's advice and assistance should be obtained.

Another approach to zoning newly annexed territory that has not been planned and zoned prior to annexation is to automatically zone newly annexed territory into the city or town zone which is most similar to the prior county zone.²¹ While this technique may result in a more appropriate temporary designation, it may still be challenged on grounds similar to those mentioned above.

Pending statutory or judicial guidance, any of the foregoing temporary methods may be more desirable than the complete absence of a zoning provision when territory is annexed to a city. However, all of these temporary measures still require appropriate zoning to be provided soon after annexation. The inadequacies of each of these methods of zoning newly annexed territory make a strong case for utilizing the procedures outlined above for appropriate planning and zoning of an area prior to annexation.

III. Assumption of Indebtedness

The annexation statutes authorize the city council to require property in an area being annexed to assume, as a condition of annexation, a pro rata share of the annexing city's then outstanding indebtedness that had been approved by the voters, contracted, or incurred prior to, or existing at, the date of annexation.

In each city there will be different factors that should be considered in deciding whether to require debt assumption. Some of the issues a city should examine in reaching a decision on this question are:

Was the outstanding indebtedness incurred to finance an improvement or facility that will benefit the newly annexed area?
Will assumption of a proportionate share of the city's outstanding indebtedness place an excessive financial burden on annexed property in light of other indebtedness previously placed on the property through the county or special districts, which will remain on the property after annexation?
Will the property to be annexed be forming an expensive LID for special improvements, such that requiring assumption of the outstanding indebtedness would not be equitable?
To what extent does the annexing city desire to encourage (or subsidize) the annexation?

Most cities do require the assumption of indebtedness as a condition of annexation, unless in a particular circumstance this would not be equitable. This issue may be addressed in a city's annexation goals and policies, so that the city is consistent in its requirements, and all potential annexation areas are aware of them.

IV. Community Municipal Corporations

Chapter 35.14 RCW authorizes the formation of community municipal corporations in certain annexed territory for the purpose of preserving the community identity of the annexed territory. This purpose is to be accomplished by allowing the community municipal corporation to have an effective “veto” power with respect to application of city planning and land use laws to the area it encompasses. To qualify to organize as a community municipal corporation, the area must have one of the following characteristics:

It would be eligible for incorporation as a city or town, or
It has a population of at least 300, and it has at least ten percent of the population of the annexing city, or
It has a minimum population of 1,000 inhabitants.

RCW 35.14.010. Community municipal corporations may be formed only through the election methods of annexation.

Formation of a community municipal corporation is the exception, rather than the rule, when cities annex territory. Often, annexations are not of sufficient size to allow for establishment of these organizations, or the area annexed is not sufficiently cohesive. Currently, community municipal corporations exist only in the cities of Bellevue (which has two) and Kirkland.

Moreover, cities generally do not encourage the formation of community municipal corporations. The statutes purport to give these bodies the authority to “veto” city council enactments relating to land use matters within the community municipal corporation service area. In theory, the result of a community municipal corporation's veto authority with respect to land use matters could be two or more different planning, zoning, or subdivision standards within one city.

With the passage of the Growth Management Act (GMA), an issue has been raised concerning the continued authority of community municipal corporations in GMA counties to veto city land use enactments. Coope