Opinion
No. COA10-1259
Filed 7 June 2011 This case not for publication
Appeal by petitioners from order entered 1 July 2010 by Judge Phyllis M. Gorham in New Hanover County Superior Court. Heard in the Court of Appeals 9 March 2011.
Eldridge Law Firm, PC, by James E. Eldridge, for petitioners-appellants. Carolyn D. Johnson, Attorney for City of Wilmington, Parker Poe Adams Bernstein, L.L.P., by Anthony Fox, Benjamin Sullivan, and Susan W. Matthews, for respondent-appellee.
New Hanover County No. 09 CVS 3086.
Where annexation did not actually take place in 2010, petitioners argument that the City violated N.C. Gen. Stat. § 160A-47 by failing to project cost for that year is moot. The accuracy of the City's prediction of the system development charges and sales tax revenues associated with annexation is beyond the scope of our appellate review. The trial court properly granted summary judgment in favor of the City where petitioners failed to show prejudice arising out of allegations that certain persons were not able to be heard at the public hearing.
I. Factual and Procedural History
On 3 February 2009, the City Council of Wilmington, North Carolina ("the Council") adopted a resolution stating its intent to consider annexation of an area known as Monkey Junction into the City of Wilmington ("the City"). On 17 February 2009, the Council approved the annexation service plan for Monkey Junction. The plan proposed the addition of the following personnel and necessary corresponding equipment to extend municipal services to Monkey Junction: two maintenance personnel for stormwater management; six police officers; and a two year contract with existing private waste hauling firms currently operating in the area and hiring three additional solid waste workers. The plan also laid out an extensive proposal for extending water and sewer lines to Monkey Junction. Under the plan, Cape Fear Public Utility Authority ("CFPUA") was to complete the water and sewer infrastructure improvements. CFPUA would impose charges for the water and sewer connections (system development charges "SDCs"). The plan provided that the City would pay the SDCs for the connection of existing developed properties to the CFPUA water and sewer system.
"The City plan[ned] to finance the extension of General Fund services and cost of the Installment Financing for constructing the extension of water distribution and sewer collection lines by using the General Fund revenues generated by the Monkey Junction Annexation Area." The annexation was to take effect on 10 June 2010. The fiscal year for the City runs from 1 July to 30 June each year. The City projected $0 in cost for extending services to Monkey Junction in fiscal year 2010, but did project revenues and expenditures for fiscal years 2011 through 2014.
Public information meetings were held on the proposed plan on 26 March 2009 and 2 April 2009, and a public hearing was held to consider the plan on 7 April 2009. There was conflicting evidence before the trial court as to whether everyone requesting to be present and heard at the public hearing was given an opportunity to be heard.
The annexation plan was amended on 5 May 2009. The amended plan reduced the number of additional police officers needed from six to five, and the number of water meter and sewer service connections requiring payment of SDCs was adjusted from eighty-eight to eighty-nine for water service connections and eighty-seven to eighty-eight for sewer service connections. The annexation ordinance for Monkey Junction was adopted by the Council on 5 May 2009.
On 6 July 2009 Royal Palms MHP, LLC, E. Alan Rusher, Robert D. Ellyson and his wife, Deborah K. Ellyson, and Walter D. Harris, III and his wife, Diane E. Harris (collectively "petitioners") filed a petition seeking judicial review of the annexation ordinance. This petition alleged that the City failed to substantially comply with the requirements of N.C. Gen. Stat. § 160A-47 (2009) to set forth the method by which the City planned to finance the extension of services to Monkey Junction for the fiscal year the annexation became effective (the period from 10 June 2010 to 1 July 2010) and that the City failed to comply with N.C. Gen. Stat. § 160A-49 (2009) by denying City residents and persons resident or owning property in the Annexation Area the opportunity to be heard at the public hearing. On 27 July 2009 the City filed a motion to dismiss, answer, and motion to expedite hearing. On 23 April 2010 the City filed a motion for summary judgment. On 1 July 2010 the trial court granted the City's motion for summary judgment.
Petitioners appeal.
II. Summary Judgment
In their only assignment of error, petitioners contend that the trial court erred in allowing the City's motion for summary judgment. We disagree.
A. Standard of Review
N.C. Gen. Stat. § 160A-50(f) (2009) provides in part that when a trial court reviews an annexation ordinance:
The review shall be conducted by the court without a jury. The court may hear oral arguments and receive written briefs, and may take evidence intended to show either
(1) That the statutory procedure was not followed, or
(2) That the provisions of G.S. 160A-47 were not met, or
(3) That the provisions of G.S. 160A-48 have not been met.
This court held in Ashley v. City of Lexington that:
The scope of judicial review of an annexation ordinance adopted by the governing board of a municipality is prescribed and defined by statute. . . . These statutes limit the court's inquiry to a determination of whether applicable annexation statutes have been substantially complied with. When the record submitted in superior court by the municipal corporation demonstrates, on its face, substantial compliance with the applicable annexation statutes, then the burden falls on the petitioners to show by competent and substantial evidence that the statutory requirements were in fact not met or that procedural irregularities occurred which materially prejudiced their substantive rights. "In determining the validity of an annexation ordinance, the court's review is limited to the following inquiries: (1) Did the municipality comply with the statutory procedures? (2) If not, will the petitioners suffer material injury thereby? (3) Does the area to be annexed meet the requirements of G.S. 160A-48 . . . ?"
Ashley v. City of Lexington, ___ N.C. App. ___, ___, 704 S.E.2d 529, 534 (2011) (quotations omitted).
This case was decided on summary judgment.
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." On a motion for summary judgment, "[t]he evidence is to be viewed in the light most favorable to the nonmoving party." When determining whether the trial court properly ruled on a motion for summary judgment, this court conducts a de novo review.
Id. (quotation omitted).
B. N.C. Gen. Stat. § 160A-47
N.C. Gen. Stat. § 160A-47 provides that a municipality seeking to involuntarily annex an area must prepare a plan for extending services to that area. The plan must state how the municipality plans to finance the extension of the services and the financial impact the annexation will have on the municipality.
i. Fiscal Year 2010
Petitioners contend that the City violated N.C. Gen. Stat. § 160A-47, because the annexation plan did not project the cost of extending police, solid waste, or stormwater services to Monkey Junction in fiscal year 2010 notwithstanding the additional hires, equipment, vehicles, and operating cost the plan stated would be needed to extend those services on the effective date of annexation, 10 June 2010.
The annexation's original effective date was 10 June 2010; however, the annexation was stayed pursuant to N.C. Gen. Stat. § 160A-50(i) pending resolution of this appeal. Because the annexation did not actually take place in fiscal year 2010, this argument is moot and will not be reviewed. We further note that the effective date of the annexation was less than a month from the end of the City's 2010 fiscal year. This type of hyper-technical argument would have no merit even if the issue was not mooted.
ii. System Development Charges
Petitioners contend that the annexation plan fails to accurately state the total cost of the SDCs which the City obligated itself to pay for connecting existing developed properties to CFPUA's water and sewer systems.
In Parkwood Assn., Inc. v. City of Durham, 124 N.C. App 603, 611-12, 478 S.E.2d 204, 209 (1996), this Court held that accuracy of the calculated cost of annexation was not a proper subject for judicial review.
As to the accuracy of the City's statements regarding the financial impact of the annexation, we find nothing in the statutes which requires the City to provide the projected costs of providing services to the annexed area. The statute merely requires the City to provide information on the method of financing these services, which petitioners admit the City has done in this case. Therefore, the trial court had no jurisdiction to decide this issue and properly excluded any evidence on the subject.
Although the courts have no jurisdiction to review these issues, we find some merit in petitioners' argument that even if not required, when the City does include information on these subjects in the annexation report they should be required to provide accurate information. While not required by law to be included in the report, such information is informative to persons in the proposed annexation area, and to be of the greatest possible benefit, should be as detailed and accurate as possible. These issues, especially the proposed costs of the annexation, involve whether the annexation will result in a net benefit or loss for the City, an important consideration to both petitioners and the City. However, it is not the role of the reviewing court, but the role of the elected officials, to determine the wisdom of a proposed annexation. The proper forum for attacking the accuracy of projected costs and other items in the report not required by statute is the hearing before the City Council provided under N.C. Gen. Stat. § 160A-49. The role of the reviewing court is simply to determine whether the city has committed to provide a nondiscriminatory level of major services to the annexed area.
Id.
Based upon our ruling in Parkwood, we hold that the accuracy of the City's projected cost for SDCs is beyond the scope of our review, and something more appropriately addressed through the political process, in particular at the public hearing on the proposed annexation.
Even assuming arguendo that this argument would be appropriate for judicial review, it still lacks merit. Royal Palms is a mobile home park consisting of 191 developed units, and is currently connected to CFPUA's water and sewer system through a master meter arrangement. Petitioners argue that the City inaccurately estimated the total amount of SDCs it would incur because Royal Palms has requested individual connections and meters at each of the 191 dwelling units. However, the plan of annexation did not provide that the City would provide for SDCs for properties already connected to water and sewer services through CFPUA. Where Royal Palms is already connected to water and sewer services through a master meter, they will not be permitted to manufacture an argument concerning the annexation by demanding meters for individual properties.
This argument is without merit.
iii. Sales Tax Revenue
Petitioners contend the annexation plan's projected sales tax revenues from the annexed area are unrealistic in light of current economic conditions.
Based on Parkwood, 124 N.C. App. 603, 478 S.E.2d 204, as discussed above, this is not an appropriate subject for judicial review. Matters concerning the overall benefit or cost of annexation are matters left to the political process.
Even assuming arguendo that this would be a proper subject for judicial review we hold the trial court did not err in granting summary judgment in favor of the City. The affidavit of Debra Mack, the City's finance director stated; "[s]ales taxes are collected County-wide, and the amount collected is then allocated among New Hanover County and its municipalities according to the tax value of the real property in each jurisdiction." While sales tax collected County-wide may decline, and was predicted to decline in the annexation plan,
the total value of the City's real and personal property would increase compared to that of the County and its other municipalities, and therefore, the City's proportionate share of the total sales tax distributed County-wide . . . would also increase. The City's estimate is that its sales tax revenue from the annexation for Fiscal Year 2010-2011 will increase by $122,384.
This argument is without merit.
C. N.C. Gen. Stat. § 160A-49
Petitioners contend that the City failed to substantially comply with the requirements of N.C. Gen. Stat. § 160A-49(d) in that it failed to provide persons resident or owning property in the proposed annexation area a reasonable opportunity to be heard at the public hearing.
When the record submitted in superior court by the municipal corporation demonstrates, on its face, substantial compliance with the applicable annexation statutes, then the burden falls on the petitioners to show by competent and substantial evidence that the statutory requirements were in fact not met or that procedural irregularities occurred which materially prejudiced their substantive rights.
Ashley, ___ N.C. App. at ___, 704 S.E.2d at 534; N.C. Gen. Stat. § 160A-50(g)(1).
We hold that petitioners have failed to meet their burden to show that any procedural irregularity associated with the public hearing on annexation of Monkey Junction resulted in material prejudice to their substantive rights. Petitioners contend that it was error for the trial court to grant summary judgment in favor of the City because petitioners allege that not every City resident or person owning property in Monkey Junction was able to be heard at the public hearing. However, petitioners offer no evidence as to what these individuals would have said or presented at the public hearing. Without this evidence it is impossible to predict if these individuals could have changed the Council's position on annexation, and thereby whether or not they were prejudiced by the exclusion of these individuals. Further, the minutes of the public hearing note only three individuals speaking in favor of annexation, but note twenty individuals speaking in opposition to annexation. There is no evidence presented that the individuals allegedly denied an opportunity to speak at the public hearing in opposition to annexation would have offered anything beyond what was offered by the twenty individuals that did speak in opposition to annexation. Petitioners have failed to meet their burden to present evidence that they were prejudiced by the alleged lack of opportunity to be heard at the public hearing.
This argument is without merit.
AFFIRMED.
Judges CALABRIA and BEASLEY concur.
Report per Rule 30(e).