Annexation Agreements

AuthorDavid L. Callies/Daniel J. Curtin Jr./Julie A. Tappendorf
city passed the costs on to the consumers at a direct rate—not making any
profit.685 Plaintiffs contended that these new charges were really impact fees
and violated the terms of their development agreement.686 Because the city
does not make a profit, but bases the charges on those charges it must pay to the
regional authority, with no money going toward capital improvements, the
court found that the charge was simply cost-based and within the parameters of
the development agreement.687
Courts regularly label sewer systems as a typical government function, but
consider general water and stormwater systems to be proprietary. Thus, on bal-
ance, a development agreement often provides that the subdivision developer
install the water and sewer lines needed both within the subdivision and to con-
nect the subdivision to existing lines. Sometimes the development agreement
also requires payments for upgrades to the city’s water facilities to manage the
greater flow requirements of the new development. In return for the improve-
ments, the city agrees to maintain the pipe infrastructure within and connected
to the subdivision.
IV. Annexation Agreements
A. Introduction
As discussed above, a developer desires to protect its ability to develop its prop-
erty once it has obtained all land use and discretionary approvals. One way to
protect the developer from changes in land use and zoning laws and permit the
developer to complete its development is for the developer to enter into an
agreement with the local government to freeze these regulations. One type of
agreement used frequently,particularly in Illinois, is the annexation agreement.
B. Bargaining Away Police Power
The issue of whether a local government bargains away its police power by en-
tering into an agreement under which it promises not to change its land use reg-
ulations during the life of the agreement is the same for annexation agreements
as it is for development agreements. Although specific statutory authorization
is helpful to show the necessary public purpose that is recognized by the state,
only a handful of states appear to have adopted legislation enabling local gov-
ernments to enter into annexation agreements.688 Apparently,the prevalence of
statutory annexation provisions, together with a recognition that local govern-
ments have the powers they need to exercise their authorized powers (such as
685. Id. at 10.
686. Id.
687. Id. at 11.
688. Ariz. Rev. Stat. Ann. §9-500.05; 65 Ill. Comp. Stat. 5/11-15.1-1; Minn.
Stat. §414.0325; N.C. Gen. Stat. §160A-58.21 (1989); Wash. Rev. Code

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT