The Planning Division is requesting the City Council conduct a public hearing and deny a Resolution to Exclude Property described as Lots 26, 27, the west half of Lot 28 and Lot 38, and Lot 40 of the Sunny Cove Fruit Farms. The deannexation would result in about 46 acres of undeveloped, west end land being taken out of the City. Petitioner and property owner Thomas E. Romine has signed the attached petition to request this property be deannexed. A 20-day public comment period beginning November 17 was legally noticed on November 17 and December 1. No comments have been received as of November 23, 2011. City staff has reviewed this deannexation request and does not support the deannexation of this property.

The City Council may:
• Approve the Resolution to Exclude Property to deannex the subject property; or
• Not approve the Resolution to Exclude Property and not deannex the subject property.

This property was intended to be developed in the City for residential uses and has been providing City tax and assessment revenue even as undeveloped land for the past 5 years, so there is some potential for lost tax revenue for the City if the property is deannexed. The property was annexed by the City in 2006 at the request of the current property owner with the intent to develop the property. It is within the City's Limits of Annexation designated for annexation into the City within the next 5 years. This means that the City could deannex the property now and be petitioned to annex the property again at any time. The greatest costs to the city by deannexing are lost tax and assessment revenue and the potential that the City will be asked to annex the property in the near future, which will require a new annexation review.

The Planning Division is requesting the City Council deny a Resolution to Exclude Property described as Lots 26, 27, the west half of Lot 28 and Lot 38, and Lot 40 of the Sunny Cove Fruit Farms. The deannexation would result in about 46 acres of undeveloped, west end land zoned Residential-9600 being taken out of the City.

Staff has reviewed this deannexation petition and finds that the requested deannexation is at odds with several criteria in the City's Deannexation Policy. The requested deannexation is inconsistent with the City’s Deannexation Policy in that:

• The property is currently within and adjacent on the north, east, south, and partially on the west sides to acceptable limits of annexation as defined on the most recent update of the Limits of Annexation Map. This results in the deannexation of the property being in conflict with the City's Annexation Policy and Limits of Annexation Map as it is an area where annexation would be supported and it is already in the City.
• The property also is adjacent to public right-of-way on 62nd Street West and borders 60th Street West right-of-way on both the east and west sides, as the existing undeveloped right-of-way passes through the property. Deannexation of the property would mean that the undeveloped 60th Street West right-of-way would be removed from the City as would the portion of 62nd Street West right-of-way along the west edge of the property.
• While the property is not currently connected to City water, wastewater or storm drainage facilities, and cannot connect to these facilities without a significant expenditure of personal or public funds, the City would be able to serve the subject property from existing water and sewer lines in Rimrock Road and 58th Street West. Elevation differences between the current water and sewer lines that would serve this property might require a lift station or low pressure system to tie into the existing water and sewer mains, according to the City Public Works Department. This could be considered an "unreasonable expense of personal or public funds," as stated in the City's Deannexation Policy and alluded to by the property owner in the attached deannexation petition owner statement. However, development of this property to Residential-9600 zoning densities in the City would be a significant development project that might include 150 or more single-family residential units.

The requested deannexation is consistent with the City’s Deannexation Policy in that:

• The property is not encumbered by any indebtedness of any improvement district of which the territory is a part.
• The property is located on the outer perimeter of the City limits and upon exclusion of the property will not result in a parcel wholly surrounded by City limits.

From a service standpoint, City staff did not have any significant concerns with deannexaton of the property since it has not yet been developed. Comments from the City Police, Fire, Public Works, and Finance departments expressed no significant impacts to their services if the property were deannexed. Other departments did not provide comments on the deannexation request. The conflict with this request falls almost completely within criteria in the City's Deannexation Policy; the expectation that this property will be developed in the City in the future and the removal of road and road right-of-way from the City.

The property owner petitioning to deannex is the primary stakeholder in this process. The City has followed the procedures for deannexation as per 7-2-48 of the MCA, including advertising and allowing for a 20-day comment period on the deannexation request prior to conducting a public hearing on the request. The Planning Division has not received any public comment aside from the information submitted by the property owner for this deannexation request. 

This deannexation petition is not in alignment with all of the deannexation critera as set out in the City's Deannexation Policy and discussed in more detail in the Background Section of this report.