The City Council adopted the current City Annexation Policy on May 23, 2016. The Annexation Policy requires the City to review and consider updates to the policy and map whenever the Capital Improvements Plan is revised. Council approved the 2018-2022 Capital Improvements Plan on March 27, 2017. The City Annexation Committee brought proposed amendments to the City Council at its Work Session on February 21, 2017. The Council directed staff to bring the proposed Policy changes back for consideration at a regular Council meeting. The Council is expected to conduct a public hearing and consider taking formal action on the Annexation Committee's recommended amendments to the City Annexation Policy at this meeting. It is expected that the Council will consider amendments to the Limits of Annexation Map at a future meeting.

↵In making its recommendations to amend the City Annexation Policy, the Committee is seeking to enable the City to address unusual circumstances that some Limits of Annexation Map amendment requests from property owners may create, and provide process and protection for the City as it continues to make decisions on Annexation Map amendments in the future.

In considering the Annexation Committee's recommendation, the Council may:

• Approve the Annexation Committee's recommendation to amend the City Annexation Policy.
• Modify the Annexation Committee's recommendation to amend the City Annexation Policy.  This option would require that the Council delay final action until the May 22 meeting because the changes must be adopted by Resolution and staff would need a few days to amend the policy as directed by Council.
• Not approve the Annexation Committee's recommendation to amend the City Annexation Policy, leaving the Policy as it is.

Annexation of property to the City of Billings increases the City’s tax base. At the same time, the City bears the cost of additional service demands. The Annexation Policy and the Limits of Annexation Map are management tools to help City staff and the Council balance this cost versus benefit of adding property to the City and providing services to that property. The proposed Policy amendments would have an impact on future annexations as some properties that are located outside of the City Annexation Petition Area and Long Range Urban Planning Area could be brought into the City Annexation Petition Area directly and then annexed into the City, requiring City services be provided.

The Annexation Committee in 2015 recommended that the City Council consider conducting a cost of service analysis to help in determining the cost-to-benefit ratio of allowing certain property proposed to be developed in certain ways to be annexed into the City. The Council favored this recommendation and the Council will be following up on discussion of a Cost of Service Study at a Work Session in September 2017.

↵↵The City Council first adopted an Annexation Policy and accompanying Map on May 28, 2002, almost 15 years ago. The original adoption of the Policy was driven by annexations in the early 2000s of areas like Rehberg Ranch, Ironwood and Briarwood that were placing significant service demands on City services and the Council realized it needed a formal process and criteria to make future annexation decisions. To provide guidance on Annexation Policy and Map amendments, an Annexation Committee, consisting of representatives from the Parks, Recreation and Public Lands, Police, Fire, Public Works, Transit, Administration, and Planning Departments, Billings School District 2, and County Water District of Billings Heights advises the City Council. The Committee reviews map amendment requests from private property owners as well as City Departments, and makes recommendations to the Council on updates to the Policy and Map brought to the Committee. In this case, the Committee reviewed a Map Amendment Request and it prompted the Committee to bring Annexation Policy Amendment recommendations to the Council.

Staley/Forbes/Oakland Request to Amend Map
This request involves about 116 acres of land at the northwest corner of the intersection of Rimrock Road and 70th Street West. The property is currently used for dry land farming with no buildings on it. The Oakland Companies would like to annex the property to the City and continue similar residential single-family development that is adjacent to the subject property to the east in Copper Ridge Subdivision. The request is unusual as the property is currently located outside of the City's Limits of Annexation Map jurisdiction. It is neither within the Long Range Urban Planning Area or the City Annexation Petition Area. The request is to bring the property directly to the City Annexation Petition Area for immediate annexation without first bringing it into the Long Range Urban Planning Area. This approach does not follow the City’s past practice of first having owners request to bring a property that is outside of the Limits of Annexation Map into the Long Range Urban Planning Area. The applicant prepared an Urban Planning Study and has taken the position that since all of the work for both a Long Range Urban Planning Area request and a Red Area request have been met, the City should consider the request and find it complies with the Annexation Policy. The Annexation Committee Members have analyzed and discussed this at length and have formulated a recommendation to the City Council for Policy amendments to address this situation.

Annexation Policy Amendments
The Committee is recommending the Council amend the Annexation Policy to address the very unusual circumstances this type of request has presented, and to provide process and protection for the City as it continues to make decisions on Annexation Map amendments in the future. The Committee found that while this property is not within the Limits of Annexation Map boundaries and is at the extreme western edge of the City:

• City water and sewer lines are sized appropriately and are already run to the eastern edge of the subject property.
• The property is directly adjacent to the City Limits.
• The property in the City adjacent to the subject property is already developed and designed to connect to the subject property.
• Most City services providers (Public Works, Police, Fire) say they are able to serve the property even with some reservations regarding the distance to City operations facilities for services like solid waste, utilities and street and traffic, and potential increases in response times for public safety services.

The Committee has drafted Annexation Policy amendments (See attached). These proposed amendments are meant to both address the unusual circumstances of requests like the Staley/Forbes/Oakland situation but also seek to clarify that most future requests must follow the progression of first requesting inclusion in the Long Range Urban Planning Area before requesting inclusion in the City Annexation Petition Area. The Committee is in agreement that it would prefer to see more requests for annexation into the City from property already in the existing City Annexation Petition Area versus requests to expand either the City Annexation Petition Area or the Long Range Urban Planning Area. These desires notwithstanding, the Committee used the following base criteria to develop the proposed Policy amendments before the Council at this meeting:

• Has an Urban Planning Study been completed on the subject property and has the City performed any long range service studies that include the property?
• Are City water and sewer lines directly adjacent to the property and sized appropriately to serve development on the property?
• Is the property directly adjacent to the City Limits?
• Is the adjacent City property already developed to City standards and designed to connect via roads?
• Are City service providers (Public Works, Police, Fire) able to adequately serve the property without immediate increases in resources.

If criteria like these are met under the proposed Policy amendments, the Council could consider adding property directly into the Red City Annexation Petition Area. However, the Policy would still allow the Council to not include the property in any Limits of Annexation area.

Public comment will be taken at the May 8 City Council public hearing concerning the Annexation Committee's recommended Policy amendments. The public hearing has been advertised as required in the Billings Times. Agents for the property owner requesting the amendment to the Limits of Annexation Map also were informed of the meeting and provided the link to this memo and proposed Policy amendments.

In making any Policy recommendations, the Annexation Committee takes into consideration many plans and policies, including, but not limited to, the City's current Water and Wastewater Master Plan, the current Storm Water Master Plan, the 2016 City of Billings Growth Policy, the 2014 Billings Urban Area Long Range Transportation Plan, neighborhood or area plans as applicable, and the latest adopted CIP. Recommendations are based on an effort to be consistent with adopted policies, plans and approved CIP projects, and attempt not to favor one department’s ability to provide service over another department’s limitation.