The Planning Division is recommending the City Council conduct a public hearing and consider a Resolution to Exclude Property described as portions of Terrace Estates Subdivision, 3rd Filing, being Lots 1-25, within Block 1, Lots 1-27, within Block 2 and Lots 1-6, 41A, 41B, 42A, 42B, 43-53, 60, 72-76, within Block 3. The de-annexation also includes all dedicated Right-Of-Way of Jack And Jill Avenue, Sage Drive, Woodland Trail, Valley Heights Road, Dewdrop Circle, Sun Valley Road and Alkali Creek Road within said Terrace Estates Subdivision, 3rd Filing, Blocks 1-3 (see exhibit attached). The deannexation would result in about 49 acres of undeveloped land being taken out of the City. Petitioners and property owners, James and Jo Ann Boyer, have signed the attached petition to request this property be deannexed. A 20-day public comment period beginning September 15, 2017 was legally noticed on September 15 and September 29. No comments have been received as of September 21. City staff has reviewed this deannexation request, and has a few concerns about the long term annexation potential in the area of this property that are noted in the Background Section of this memo, but is not against 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 35 years.  The property is within the City's Annexation Petition Area and could petition for annexation into the City at any time. This means that the City could deannex the property now and could be petitioned to annex the property again at any time. However, as described in other parts of this report, much of the property has floodplain and topographical challenges for development and delivery of City services.

Planning staff is recommending the City Council conduct a public hearing and consider a Resolution to Exclude Property described as portions of Terrace Estates Subdivision, 3rd Filing, being Lots 1-25, within Block 1, Lots 1-27, within Block 2 and Lots 1-6, 41A, 41B, 42A, 42B, 43-53, 60, 72-76, within Block 3. The de-annexation also includes all dedicated Right-Of-Way of Jack And Jill Avenue, Sage Drive, Woodland Trail, Valley Heights Road, Dewdrop Circle, Sun Valley Road and Alkali Creek Road within said Terrace Estates Subdivision, 3rd Filing, Blocks 1-3 . The zoning of Residential 9600 would remain in place on the property as single family development is possible on the property in the City or County, while the lot sizes would likely have to be much larger than the 9,600-square foot minimum of the zoning.

Staff has reviewed this deannexation petition and finds it meets some of the criteria in the City's Deannexation Policy and does not meet other criteria as follows:

The requested de-annexation is consistent with the City’s de-annexation policy in that:
1. The property is not connected to City water, wastewater, or storm drainage facilities, and appears to not be able to connect to these facilities without a significant expenditure of personal or public funds. There are topographical challenges due to rimrocks along the east portion of the property, the Alkali Creek floodplain runs through the middle of the property, and the original subdivision plat contemplated two bridges across Alkali Creek, adding some significant design obstacles to development and access for the property.
2. The property is not encumbered by any indebtedness of any improvement district of which the territory is a part.
3. The property is located on the outer perimeter of the City limits and upon de-annexation of the property will not result in a parcel wholly surrounded by City limits.

The requested de-annexation is not consistent with the City’s de-annexation policy in that:
1. The property is adjacent to public right-of-way along Alkali Creek Road. However, the road right-of-way for the unconstructed roads within the subdivision and the road right-of-way for Alkali Creek Road are proposed to be de-annexed as part of this process.
2. The property is bordered by other property within the City Limits on the north and east, and is adjacent to the acceptable limits of annexation as defined on the most recent update of the Limits of Annexation Map. The property also is adjacent to the Long Range Urban Planning Area to the north and west, making it possible that other properties around the subject property may request inclusion in the City’s Annexation Petition Area and then petition for future annexation. This could result in the property being surrounded by the City Limits at some point in the future.
3. The exclusion of the property may mar the symmetry of the City to some extent as the boundary of the City in this area is somewhat uniform.

From a service standpoint, City staff did not have any significant concerns with deannexation of the property since it has not yet been developed and service delivery and access to much of the property is challenging. Challenges to providing services include: Sewer and water are well south on Alkali Creek Road, storm water infrastructure is not close to the subject property, and the rimrocks to the east pose a significant barrier to connecting the property to storm water facilities from Terrace Estates Subdivision, 2^nd Filing.

Comments from the City Police, Fire, Public Works, MET Transit, and Planning departments expressed no significant impacts to their services if the property were deannexed. Some Departments did note the potential long-range issues for future City service delivery in this area if the property were deannexed. A summary of the specific comments from some of the Departments regarding services is provided below:

Public Works:
Water – Water service is available from Alkali Creek Road at the intersection of Sun Valley Road. It would require an extension of about 3,000 feet at the responsibility of the developer from one direction across the frontage of the property in Alkali Creek Road at this time. There is a rock ridge outcropping that extends for much of the east frontage of the property that creates physical challenges for water utility infrastructure to connect back to the southeast toward existing City water services.   

Sanitary Sewer –  Sanitary service is available, but like water it would involve major extensions for the property owner from the existing City sanitary sewer main to this property. Extensions would have to come from an existing line in Alkali Creek Road at the intersection of Strawberry Avenue and an existing line that comes down from Ginger Avenue and passes through a portion of the unconstructed Jack and Jill Avenue in Terrace Estates Subdivision, 3rd Filing.

Solid Waste division – The Public Works Department is able to serve this property, as services are already provided to property just to the south along Alkali Creek Road between the subject property and Senators Boulevard.

Public Works did note that the deannexation should be conditioned so that the existing stormwater and sanitary sewer lines at the south area of the subject property be maintained in utility easements if the plat is to be vacated or replatted in the County and existing rights-of-way and easements were to be removed or modified. A condition to reflect this has been included in the deannexation resolution.

MET Transit: The closest MET bus route is at Alkali Creek Road and Senators Boulevard. MET Transit has no plans to expand services further west on Alkali Creek Road. MET staff did note that if the property is deannexed, MET will not expand to the area in the future as the system does not provide bus service outside the City Limits.

Planning: Since large portions of the property are difficult to develop, access, and serve, it is not critical to City/urban expansion that is all be included in the City. Further, the existing dedicated park land that was provided within the subdivision is remaining in the City so it may be regulated and maintained by the City Parks Department. The main concern with deannexing the property, and specifically the developable property along Alkali Creek Road, is that the area around this property may be annexed, or is located in the Long Range Urban Planning Area of the City’s Limits of Annexation Map. This could result in the subject property being wholly surrounded by other property annexed into the City in the future. It could also result in a portion of the subject property requesting annexation into the City in the future for services to a small number of residential lots along Alkali Creek Road.

Fire: The Fire Department pointed out that this property will fall under the Billings Urban Fire Service Area (BUFSA) if it is deannexed and it will still be served by the Billings Fire Department under that service agreement.

Parks: As referenced earlier in this memo, park staff was involved in this deannexation request and ensured that the park land that was already provided in this subdivision is remaining in the City and will continue to be managed and regulated by the City Parks, Recreation and Public Lands Department. Access to the park land that will remain in the City Limits and in the ownership of the City is important for future use and maintenance of the park land areas. Access must be maintained even if the plat is vacated or replatted in the County for these City park properties. A condition to reflect this has been included in the deannexation resolution.
 

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 and City Clerk have not received any public comment about this deannexation, aside from the information submitted by the property owner.

This deannexation petition is in alignment with some of the deannexation criteria as set out in the City's Deannexation Policy and this is discussed in more detail in the Background Section of this report.