The City Council adopted the current Limits of Annexation Map on April 28, 2014. The City Council reviewed the City's Annexation Policy and Limits of Annexation Map in June 2015, but decided not to make any changes. 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 2017-2021 Capital Improvements Plan on April 11, 2016. The Council is expected to conduct a public hearing and take formal action on the Annexation Committee recommendations at this meeting.

In making its recommendations to expand the Limits of Annexation Map Red Area and Orange Area in 2016, staff considered the ability to serve areas outside the existing City limits with existing resources, effects on City residents, and programmed improvements, including the Capital Improvement Plan (CIP). The Committee also strives not to favor one department’s ability to provide service over another department’s limitations.

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

• Approve the Annexation Committee's recommendation that the City of Billings Amend the Limits of Annexation for 2016.
• Modify the Annexation Committee's recommendations.  This option would require that the Council delay final action until the June 13 meeting because the changes must be adopted by Resolution and staff would need a few days to amend the map and policy as directed by Council.

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 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 but because there was not a specific funding source to conduct a study, staff did not continue the discussion at that time. Staff is willing to follow up with the Council on further details for conducting a cost of service study if requested.

The City Council first adopted an Annexation Policy and accompanying Map on May 28, 2002, almost 14 years ago to the day that the current Council is considering these map and policy amendments.The original adoption of the Policy was driven by annexations in the early 2000s of areas like Rehberg Ranch 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 also makes recommendations on updates to the Policy and Map brought to the Committee from City staff.  The current adopted policy established two limits of annexation. The red area (2014-2018) coincides with the immediate five years covered by the CIP and defines an area where annexation petitions may be supported in the short term. The second time period, designated as orange (Long Range Urban Planning Area), covers areas where City services may be extended but would require additional analysis and funding to support those services.

The City of Billings has annexed more than 4 square miles since 2004 (38.65 to 42.91 sq. mi.), when the Policy and Limits of Annexation Map were further refined to be similar to what they are today. The community’s growth over this 12 year period has challenged the City’s ability to balance serving new areas and maintaining a high level of service to present citizens.  The committee has been reluctant to recommend expanding the annexation areas for the past two (2) years because expansion will make that balance even more difficult to achieve.  Public safety services have been a primary concern.  In late 2015, the Council approved funding to add 6 police officers, 6 firefighters and 4 emergency communication (9-1-1) operators, which helped the committee in recommending red and orange area expansions in 2016.  Adding these 16 employees is not a long-term solution because the community will continue growing, but it boosted the Committee’s confidence that the public safety agencies are better equipped to handle calls for service within an expanded annexation area.

The Committee has maintained the premise that since the City in the past determined its ability to serve property already in the Red Limits of Annexation Area, the City’s commitment to considering annexing property already in the Red Area should be maintained. This approach is something the Council may make further determinations on as annexations are at the complete discretion of the City Council, but the Committee wants to ensure the Council understands its approach to both Limits of Annexation Map Amendments and Annexation Petition requests annually.
 
Limits of Annexation Map Amendment Requests
The Committee has met four times from November 2015 through April 2016 to discuss revisions to the map, the status of City Public Safety funding in relation to service delivery, and the challenge of determining costs of delivering all City services. The Committee received three requests from property owners for map amendments. The Committee also is recommending a change to the name of the Red Area and associated language changes in the Annexation Policy to address this map label change. The Committee also provides a response to recent discussion by City Council members on inclusion of Skyway Drive into the Red Area for annexation. The property owner requests were as follows:

• One property owner request was to include property in the Orange Area (Long Range Urban Planning Area) of the Limits of Annexation Map. This is referred to as the Jurovich Property request.
• The second request was to include property in the Red Area of the Limits of Annexation Map. This is referred to as the Viking Land Request. This request was submitted in 2014 as well but the City Council did not amend the map to include it at that time.
• The third request was to include property in the Red Area of the Limits of Annexation Map. This is referred to as the Yegen Property Request. All three requests are described in detail below.

Orange Area Request
Jurovich Property (West Billings)
C/S 2735, Parcel 3; C/S 1941, Parcel C; C/S 2735, Parcel 1A; C/S 2735, Parcel 2A.
The Annexation Committee received a request from members of the Jurovich family to include a 112 acre parcel of land south of Grand Avenue, just west of the intersection of Grand Avenue and 60th Street West, and just north of the 64th Street Drain (Hogan's Slough) into the Long Range Urban Planning Area on the Limits of Annexation Map. The Jurovich's requested the map amendment because there is already a portion of their property included in the Red Area of the Limits of Annexation Map between Trails West Subdivision and the subject properties and they would like to begin long range planning of the property as a whole. They did not want to plan for a portion of the property in the County and a portion in the City if they could prepare longer range plans that the entire property might someday be in the City and developed at urban densities and service levels. The property is currently zoned Agricultural Open Space and has been used for agriculture.

Annexation Committee Comments: Overall, City staff supported including this property in the Long Range Urban Planning Area on the Limits of Annexation Map. The Committee looked at the location of the Jurovich property in relation to other areas in the immediate vicinity in regard to the Long Range Urban Planning Area and the Red Area and City service delivery and availability. The Committee found that given the proximity of Cottonwood Park, the new Ben Steele Middle School, Fire Station #7, and nearby water and sewer to the east, it appeared that the area roughly bounded by 64th Street West on the west side and south of Grand, and 62nd Street West on the east side and north of Grand was a logical area to study for future annexation and City development. The current Limits of Annexation Map has property northeast of the Jurovich property in the Red Area already and in the City Limits where Foxtail Meadows Subdivision is located. Further, land that is on the east side of of 62nd Street West is already in the Red Limits of Annexation Area. It appears bringing the Jurovich property into the Long Range Urban Planning Area is a first step toward further analysis of that property for future City service delivery and annexation. If this map amendment is made, additional analysis by the property owners and the City will be necessary to look at the future potential to bring the property into the Red Area of the Map to facilitate future annexation. The Annexation Committee also agreed that when it reviews map amendments in the Fall of 2016 it will review the Long Range Urban Planning Area boundary for adjustments in the Grand Avenue corridor as well as in other areas of the Map.

RECOMMENDATION FOR JUROVICH PROPERTY
The Annexation Committee recommends that the City Council amend the Limits of Annexation Map to include the Jurovich property in the Orange Long Range Urban Planning Area.
 
Red Area Requests

Viking Land Request
Tracts 2, 3, 4 and 5 of C/S 234, 2nd amendment; Tract 6-A-1 of amended Tracts 6-7 of C/S 234, 2nd amendment; and the unplatted North ½ of the Southwest Northeast & the North ½ of the Southeast Northeast of Section 24, Township 1 North, Range 25 East
 
Property owner Viking Land, LLC first submitted a request and Urban Planning Study in November 2014 to include its property in the Red area on the Limits of Annexation Map. The Annexation Committee did not support amending the map to include this property in the Red at that time due to significant public safety service delivery concerns and the Council agreed. Viking Land resubmitted its request in November 2015. The property is about 98 acres in size. The latest Urban Planning Study that accompanied this reapplication is attached to this memo and also is available for review at the City-County Planning Division Office.
 
The property is currently zoned Planned Unit Development with underlying allowances for residential and commercial development and is used for sod farming operations by Tvetene Turf. The property owners still have a few years left on the sod farming lease for the property and have no immediate plans for development, but would like to begin positioning it for commercial uses with City services.
 
Department Comments: Below are comments regarding this map amendment request provided by the various City Departments through the Annexation Committee. Overall, City staff supports including this property in the Red Area on the Limits of Annexation Map.

Public Works: Public Works found that based on a project in the City’s CIP for construction in FY16 it could serve the property with water and sewer. The City Council on April 25, 2016 approved the $1.3 million project to run a water line under the railroad and Interstate 90 corridor and down the East Lane corridor to Elysian Road. The water line under the Interstate provides better service capacity to the entire southwest portion of the City, including this property.Public Works stated that the Street and Traffic and Solid Waste divisions also are able to serve the property, and the City will eventually handle snow removal on Elysian Road and East Lane as they are Collector Streets.

Fire Department: The City Fire Department currently serves the subject property as it is within the Billings Urban Fire Service Area. However, the current sod farming operation on the property is very different than proposed residential and commercial uses that could be developed if the property were brought into the Red Area and then annexed into the City. The Fire Chief stated that the Department does not want to be in a position of  limiting growth. He said the Fire Department is adding 5 firefighter positions, but any expansion of the Departments service area is a challenge even with added staff.  Fire crews from Station 5 and Station 2 would respond to this property. The Chief stated that the Department must approach any expansion of its service area carefully to maintain equitable service levels to all City residents. He stated that the Department's FY 17 budget requests include revisiting and updating a 2003 Fire Service Study, which will look at service levels and facilities.

MET Transit: MET has no service in the area of the Viking Land property, and no immediate plans to provide services based on funding limitations. MET is proposing changes to its fares and routes in 2016 but funding limitations from the Federal Transit Administration and the annual mill levy do not allow for the significant expansion of services to reach the Viking Land property.
 
Police Department:  The Police Chief stated that the Department is in much the same situation as the Fire Department. He stated that the Police Department has been approved to hire 5 additional police officers in 2016 and adding staff will be a significant improvement. However, he cautioned that training of the new positions will mean the new officers will not be out on the street until late 2016 or in 2017. The Chief stated that the further the distance Police must go to respond to calls, the response times increase, but that the officers will get there. He said Elysian School is already in the City after being annexed last year and the area has not been a high service call area. 
 
Parks: The Parks  Department believes that this area along the fringe of the City could use a community park (Pioneer Park is considered a community park) if annexations continue and the proposed development of significant housing occurs in the area. Staff stated that the City has not kept up with the demand for larger community parks and that the City population has increased by 40,000 since the last community park was developed. As additional property is added to the City and developed, the City will need to identify funding sources, like its Park District, as well as locations for community parks.

Schools: Facilities Manager for Billings Public Schools Scott Reiter pointed out that the property is served by the Elysian School District for K-8^th grade and then students go to one of the high schools in Billings. He stated that the Billings School District has completed a redistricting plan for the high schools and that this property would fall into the Senior High and West High areas when the redistricting plan takes effect.

Planning: Planning staff supported adding the Viking property to the Red Area but cautioned it could be a longer term process to provide all City services such as transit and parks at the level needed for full development. Planning staff also pointed out that there is existing residential development in the County north of the property as well as existing County industrial development south of the subject property that may preclude additional amendments to the Limits of Annexation Map to the west, north and south in this area.

RECOMMENDATION FOR VIKING LAND
The Annexation Committee recommends that the City Council amend the Limits of Annexation Map to include the Viking Land property in the Red Area.
 
Yegen Property (Billings Heights)
Section 11, T1N, R26E, South 13 acres and west of RY in S2SW9 Less 3,303 square feet of Bench Boulevard Right-of-Way

Property owner Zellah Yegen Trust B and Trust C submitted a request and Urban Planning Study in November 2015 to bring the subject property into the Red Limits of Annexation Area. The property is about 13 acres in size and is zoned Agricultural Open Space. It is located at the northeast corner of the intersection of Main Street, Highway 87, Highway 312, Bench Boulevard, and Mary Street. The property is bounded on the west and south by property already in the City and property within the red Limits of Annexation Area to the east. The Urban Planning Study that accompanied this request is available electronically and for review at the City-County Planning Division Office.

Department Comments: Below are comments regarding this map amendment request provided by the various City Departments through the Annexation Committee. Overall, City staff supports including this property in the Red Area on the Limits of Annexation Map. The Committee did have some initial discussion about how the property would be accessed since the proposed Billings Bypass would run through the south-central portion of the property when it is completed. Owner representative Charlie Yegen explained that the approaches were not yet identified but that coordination and discussion with the Montana Department of Transportation was ongoing as the Bypass right-of-way acquisition process continues.

County Water District of Billings Heights:
The Heights Water District can serve the property through a water line in Mary Street, although there might be access challenges to be worked out in the area with the future Bypass project running between Mary Street and the portion of the subject property that would eventually be developed. The subject property is within the Heights Water District service area but would need to be annexed into the District for services to be provided prior to development.
 
Public Works:
Public Works is able to serve the property for sewer via an existing sewer main in Mary Street. Public Works is also able to provide other services to the property, including street and traffic and solid waste. 
 
Fire Department:
The Fire Chief stated that the Fire Department is supportive of this map amendment as it is already servicing the area now since there is City property and County property in the BUFSA in this area. He said access issues would need to be addressed at time of development. 
 
Police Department:
The Police Chief stated that the Police Department is already in the area as there is City property across Mary Street to the south and across the Highway 312/87/Main Street intersection to the west. He said there are two patrol areas in the Heights, with only two officers for the entire area at this time, and that future resource increases may be necessary as the Heights area contiues to grow.
 
MET Transit:
Transit staff stated that there is bus service close to this property across Main Street on Pemberton Lane and it does provide service to Bench Boulevard, so the subject property could utilize transit service currently.
 
Planning: Planning staff supports this map amendment. Staff found that with property in the City Limits to the west and south and there being property to the east within the Red Limits of Annexation Area, considering this property for future annexation fit with the area and the Annexation Policy. Staff was concerned that the alignment of the North Bypass might significantly limit the use and access to the subject property and that this will be an important factor in future design and development. 

RECOMMENDATION FOR YEGEN PROPERTY
The Annexation Committee recommends that the City Council amend the Limits of Annexation Map to include the the Yegen Property in the Red Area.

Review of City Council Question/Discussion on Inclusion of Skyway Drive ROW in Red Areas on the Limits of Annexation MAP 
The Annexation Committee did not receive any requests from City Departments for changes to the Limits of Annexation Map this year. However, there was discussion at the City Council level regarding inclusion of the portions of the Inner Belt Loop corridor in the Red Area of the Map. This discussion centered on the constructed portion of the Inner Belt Loop (Skyway Drive) between Wicks Lane and Alkali Creek Road. The City owns the road right-of-way (ROW) in this area and the corridor begins inside the City Limits where the street leaves Wicks Lane, but it goes outside the City Limits and into the Long Range Urban Planning Area on the Limits of Annexation Map.

The Annexation Committee discussed changing to red/annexation area, the portion of Skyway Drive ROW that is in the Long Range Urban Planning Area in the County. The Committee noted that the City owns the ROW in the County and is able to maintain the roadway in both the City and County since it is under City ownership. However, the Committee does not supporte bringing the ROW into the Red Area of the Map at this time since the private property adjacent to the ROW is not in the Red Area and has not requested to be in the Red Area for annexation. Based on the City's Annexation Policy, the City must be able to provide all services to property that is in the Red Area and seeks annexation. While the City can maintain the roadway in the ROW, there is no water or sewer service in the Skyway Drive ROW and the City has not assessed its ability to provide public safety, emergency services, transit services, and other City services to the area adjacent to the street. Including the Skyway Drive ROW in the Red Area and annexation of the ROW at this time, would give the wrong idea to private property owners in the area that City services are available. Therefore, the Committee recommends the City Council not amend the Limits of Annexation Map to bring the Skyway Drive ROW that is in the County into the Red Area for annexation. The Committee believes that it should reconsider the map changes when staff and Council establish the Inner Belt Loop's final alignment. 

RECOMMENDATION FOR RED AREA NAME CHANGE AND RESULTING ANNEXATION POLICY LANGUAGE CHANGES
The Annexation Committee recommends that the City Council rename the Red Area on the Limits of Annexation Map from the current five year time period to the "City Annexation Petition Area." The Committee finds that while the Red Area is tied to the City's CIP and the annual review of the CIP that may affect City services and expansion, much of the property in the Red Area has been there for more than 10 years and so it is no longer accurate to consider it in a 5 year horizon. The Committee also believes that this name change will make it clearer to property owners that if their property is located in the Red Area, they may petition for annexation at any time. This change will not affect the Committee's review of the Annexation Map and Policy in coordination with the annual CIP update. However, the Committee is recommending some changes to the Annexation Policy language to better fit the name change and the current analysis that occurs each year.  Since the committee is recommending changes to the Map and Policy, two amending Resolutions are attached to this staff report.

Public comment will be taken at the May 23 City Council public hearing concerning the Annexation Committee's recommended Limits of Annexation Map and Policy amendments. The public hearing has been advertised as required in the Billings Times. Agents for the three property owners requesting amendments provided informal comments during the Committee meetings.

In making its 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 2008 Yellowstone County and City of Billings Growth Policy, the 2014 Billings Urban Area Long Range Transportation Plan, neighborhood or area plans as applicable, and the CIP. These 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.