ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Mark E. GiaQuinta Edward L. Murphy, Jr.
Robert W. Eherenman Larry L. Barnard
Haller & Colvin, P.C. Miller Carson Boxberger Fort Wayne, Indiana &
Murphy LLP
Fort Wayne, Indiana
J. Timothy McCaulay
Helmke, Beams, Boyer & Wagner ATTORNEY FOR AMICUS CURIAE
Fort Wayne, Indiana INDIANA ASSOCIATION OF
CITIES AND TOWNS
D. Randall Brown
Barnes & Thornburg
Fort Wayne, Indiana
IN THE
SUPREME COURT OF INDIANA
CITY OF FORT WAYNE, )
)
Appellant (Respondent Below), ) No. 02S05-0109-CV-412
) in the Supreme Court
v. )
)
CERTAIN SOUTHWEST ANNEXATION AREA ) No. 02A05-0002-CV-77
LANDOWNERS, ) in the Court of Appeals
)
Appellees (Petitioners Below).)
APPEAL FROM THE ALLEN SUPERIOR COURT
The Honorable Robert C. Probst, Special Judge
Cause No. 02D01-9702-CP-234
March 12, 2002
SHEPARD, Chief Justice.
In 1996, the City of Fort Wayne annexed nearly thirteen square miles
with a population of 22,500 residents, postponing the effective date to
2006. Remonstrators contested the annexation. The trial court found the
Fiscal Plan for annexation legally deficient for several reasons, largely
because it predicted the costs of services in 2006 by calculating current
costs and adding inflation. This was in effect a “judicial audit” of a
decision that is legislative in nature. We reverse.
Facts and Procedural History
On December 3, 1996, the Common Council of Fort Wayne passed
Annexation Ordinance X-03-96 and approved a Fiscal Plan for annexation as
required by Ind. Code Ann. § 36-4-3-13(d)(West Supp. 1996) (“Section
13(d)”). The Mayor of Fort Wayne signed the Ordinance into law on December
5, 1996. The Ordinance deferred the effective date of annexation to
January 1, 2006, as Ind. Code Ann. § 36-4-3-8(1)(West 1997)(“Section 8(1)”)
allowed.[1]
On February 4, 1997, Remonstrators challenged the annexation,
claiming that the Fiscal Plan was legally insufficient. On January 11,
2000, the trial court issued its Findings of Fact, Conclusions of Law, and
Judgment in favor of the Remonstrators. The City appealed, arguing that
there was insufficient evidence to support the trial court’s conclusions
that:
1. the City’s Plan was deficient in calculating cost estimates for
the planned services to be provided to the annexed area;
2. the City failed to provide in its Plan that it would deliver
noncapital and capital improvement services to the annexation
territory within the statutorily fixed periods of time;
3. the City improperly used a City-wide standard in comparing
services to be provided to the annexation area to services
currently provided within the City; and
4. the City was required by statute to provide a neighborhood park
in the annexation area similar to a neighborhood park located in
the comparable area of the City.
(See Appellant’s Br. at 5-9.) The Court of Appeals affirmed, finding the
first issue dispositive. In re Ordinance No. X-03-96, 744 N.E.2d 996, 1003
(Ind. Ct. App. 2001). We granted transfer, vacating that opinion. 761
N.E.2d 412 (Ind. 2001).
I. Standard of Review for Annexation Challenges
A. The Trial Court’s Role. We recited the limited role courts play
in annexations in today’s decision in Bradley v. City of New Castle, No.
33S01-0104-CV-195 (Ind. March 11, 2002). Annexation is essentially a
legislative function. Rogers v. Mun. City of Elkhart, 688 N.E.2d 1238
(Ind. 1997).
Indiana Code §§ 36-4-3-11 through 13 establish requirements for
remonstrances;[2] give trial courts authority to hear and enter judgment on
remonstrances;[3] and direct courts to order annexation provided that the
city meets specified requirements on matters such as contiguity and has
adopted a fiscal plan showing that it will provide municipal services to
the annexed area that are equivalent to those enjoyed by residents in
similar areas of the municipality.[4]
Although the municipality bears the burden of proof when properly
challenged, we afford the municipality’s legislative judgment substantial
deference. Therefore, a trial court should not “audit” a challenged fiscal
plan. Rather, it should focus on whether that plan represents a credible
commitment by the municipality to provide the annexed area with equivalent
capital and non-capital services.
B. The Appellate Court’s Role. When a trial court enters special
findings, as is the case here, we review issues of fact for sufficiency of
the evidence and look to the record only for evidence favorable to the
judgment. Ind. Trial Rule 52; Rogers, 688 N.E.2d at 1240. We do not set
aside findings and judgments unless they are clearly erroneous. T.R. 52.
We review questions of law de novo. Rogers, 688 N.E.2d at 1240.
II. What the Statute Requires
At the time the City passed the Ordinance, Section 13(d) required
annexing municipalities to develop written fiscal plans and establish
definite policies, by contemporaneous legislative resolutions, to include
the following:
1) The cost estimates of planned services to be furnished to the
territory to be annexed.
. . . .
4) That planned services of a noncapital nature, including police
protection, fire protection, street and road maintenance, and
other noncapital services normally provided within the corporate
boundaries, will be provided to the annexed territory within one
(1) year after the effective date of annexation, and that they
will be provided in a manner equivalent in standard and scope to
those noncapital services provided to areas within the corporate
boundaries that have similar topography, patterns of land use,
and population density.
5) That services of a capital improvement nature, including street
construction, street lighting, sewer facilities, water
facilities, and stormwater drainage facilities, will be provided
to the annexed territory within three (3) years after the
effective date of the annexation, in the same manner as those
services are provided to areas within the corporate boundaries
that have similar topography, patterns of land use, and
population density, and in a manner consistent with federal,
state, and local laws, procedures and planning criteria.
Ind. Code Ann. § 36-4-3-13(d)(West Supp. 1996).
In Bradley v. City of New Castle, slip op. at 12, we observed that
Section 13 is a pretty straightforward directive: a court shall order
annexation if a municipality satisfies Section 13’s requirements. The
question we address in this case is whether the trial court examined this
Plan under too powerful a microscope.
III. A Credible Plan
A. Why Require Fiscal Plans? In City of Hobart v. Chidester, 596
N.E.2d 1374 (Ind. 1992) (“Chidester I”), we outlined the three purposes of
fiscal plans. First, “the publication of a written plan permits landowners
to make an intelligent decision about whether to accept annexation or
remonstrate.” Id. at 1377-78. Here, this purpose of the Plan was plainly
met because more than an adequate number of citizens in the annexation area
raised a timely challenge.
Second, “requiring a written plan makes the opportunity for
remonstrance and judicial review more realistic. As a practical matter,
more than vague promises are needed for a court to test a city’s ability to
provide like services to the annexed territory.” Id. at 1378. Here, the
trial court’s extensive findings and conclusions again make clear that this
Plan allowed for thorough review.
Third, “a fiscal plan needs to be in writing to protect the right of
landowners to institute proceedings to force an annexing city to provide
the services promised under the plan.” Chidester I, 596 N.E.2d at 1378.
Our analysis of each of the City’s contentions will focus on whether the
Plan fulfills this third purpose.
B. Must Cities Forecast the Future? The trial court held that
Section 13(d) requires annexing municipalities to project cost estimates
forward to the effective annexation date. (R. at 532.) The Court of
Appeals agreed, saying “we believe that cost estimates for noncapital
services must be figured from one year after the effective date of
annexation and for capital improvement services, three years after the
effective date of annexation.” In re Ordinance No. X-03-96, 744 N.E.2d at
1002.
We think the statute is not so prescriptive as that. Section 13(d)
does not speak in terms of projections, forecasts, or inflated costs; it
merely requires cost estimates. These cost estimates are not, as the Court
of Appeals said, “irrelevant and arbitrary” if they are stated in current
dollars. Id. at 1003. They are the means by which the municipality
demonstrates its financial capacity to provide the services described in
Sections 13(d)(4) and (5) at the time it authorizes an annexation.[5]
Here, the City undisputedly provided cost estimates. The trial court
found, “The written annexation Fiscal Plan for the Southwest Extended
Annexation Territory . . . showed: . . . . B) Cost[] estimates of planned
services to be furnished; . . . . ” (R. at 510.)
Nonetheless, the trial court found the estimates legally deficient
because they reflected the status quo at the time the Ordinance was passed,
inflated at an estimated rate of three percent annually.[6] (R. at 532-
34.) The essence of the trial court’s rationale was: Section 13(d) speaks
of services to be provided, so fiscal plans must forecast each individual
service and its related costs. Projecting such services and costs ten or
more years in advance is, as various City officials admitted, extremely
difficult or impossible with any degree of accuracy. Therefore, the trial
court reasoned, this annexation fails.
The trial court’s reasoning creates an implicit limitation on
annexation deferral periods. This runs counter to Section 8(1), which in
1996 explicitly allowed unlimited deferral. We will not read Section 13 in
a way that effectively eliminates an option that Section 8(1) offered at
the time the City passed the Ordinance.
We conclude that Section 13 does not require more than credible
calculation of present costs of individual services adjusted forward to
account for inflation. Based upon the finding of fact that the Plan did
contain cost estimates of planned services to be furnished, the Plan passed
legal muster in this respect.
C. A Commitment to Deliver. Although the trial court held against
the City on grounds of inadequate forward cost projections, it entered
findings of fact covering most of the services listed in Sections 13(d)(4)-
(5), plus some that were not listed. As to police service, the court
found:
67) Upon the effective date of the annexation, the City will add ten
(10) additional police officers to provide a coverage of two (2)
police patrol officers per shift in the Annexation Territory. The
City will also add one (1) police detective and one (1) police
supervisor. The anticipated calls for service in the Annexation
Territory would be six thousand seven hundred ten (6,710) runs per
year requiring approximately five thousand (5,000) police hours. The
“call for service” is the common element that drives police staffing.
(R. at 519.) As to fire protection, the court said:
17) There are three (3) new fire stations that will be constructed to
serve the Southwest Extended annexation territory located at:
a) Getz Road and Constitution Drive
b) Scott and Covington Road
c) Liberty Mills and Ellison Road
18) The projected response times from these three (3) new fire
stations that will serve the Southwest Extended annexation territory
are within the same range as the average response times in the
Comparable area.
(R. at 510-11.) The court discussed street and road maintenance at some
length, and found:
52) The City Street Department provides a surface maintenance service
which includes anything from patching a pothole to putting an overlay
on a street in all areas of the City, and, upon annexation, will
provide the same surface maintenance service to the Annexation
Territory.
53) The City plans to provide immediately upon annexation general
street maintenance by incorporating the Annexation Territory’s
nineteen and ninety-four hundredths (19.94) miles of arterial and
collector streets and ninety-four and seventy-nine hundredths (94.79)
miles of residential streets into the City’s street maintenance
program, which level of service is standard for the City.
(R. at 516.)[7] As to water and sewer facilities:
60) The City’s Water Utility presently serves a portion of the
Annexation Territory. Presently, a privately owned public utility
provides water for human consumption to the balance of the Annexation
Territory not presently served by the City’s Water Utility.
61) Upon annexation, residents of the Annexation Territory who
utilize the services of the City’s Water Utility will pay the same in-
city rate as those residents of the Comparable Area would pay.
62) In 1996, a portion of the Comparable Area was served by the same
privately owned public water utility that services a portion of the
Annexation Territory. Upon annexation, residents of the Annexation
Territory not currently served by the City’s Water Utility will be
permitted to petition the City’s Board of Public Works for water
service extension which is the same process and procedure presently
available to residents of the Comparable Area who are not presently
served by the City’s Water Utility.
63) There are some areas of the Annexation Territory currently served
by the City’s Sewer Utility. Upon annexation, the residents of the
Annexation Territory served by the City’s Sewer Utility would pay the
same rate as would be charged customers of the City’s Sewer Utility
located in the Comparable Area.
64) Other portions of the Annexation Territory are served by . . . a
privately owned public utility . . . [having] a certificate of
territorial authority (“CTA”) which grants exclusive jurisdiction,
under Indiana law, to provide sanitary sewer service. The City is not
authorized, or permitted, by Indiana law, to extend City sewer service
within the CTA.
65) If additional sanitary sewer service is needed in the Annexation
Territory outside the CTA, the City’s Sewer Utility has the capacity
to provide such service. . . .
(R. at 517-18.)
The trial court found that the City had made additional commitments
beyond the services specifically listed in Section 13(d)(4) and (5), such
as:
28) The City plans to provide full advanced life support ambulance
service immediately upon annexation to the Annexation Territory
through the City’s agreement with the Three Rivers Ambulance Authority
as well as extra emergency assistance through the City’s fire
department.
29) . . . Solid Waste Manager for the City, testified that this
service is one hundred percent (100%) funded by users fees, and [the
City] will provide the Annexation Territory with the same service as
the Comparable Area . . . .
. . . .
33) Upon the effective date of annexation, the City’s Animal Care
and Control Department will add two (2) animal control officers and
one (1) animal care specialist as well as two (2) vehicles for the new
animal control officers to serve the Annexation Territory.
. . . .
39) The City’s Parks and Recreation Department operates a street
tree program within the corporate boundaries of the City, including
the Comparable Area. Upon annexation, residents of the Annexation
Territory will be permitted to participate in the Park Department’s
street tree program under the same procedures by which residents of
the Comparable Area participate.
. . . .
42) The city plans to provide to the Annexation Territory upon
annexation engineering services for traffic control which would
include investigation of the need for, and the installation and
maintenance of, traffic control devices, which level of service is
standard for the City . . . .
(R. at 512-15.)
These detailed findings of fact demonstrate that the Plan was legally
sufficient to fulfill the third purpose of fiscal plans, which is
protecting the annexed landowners’ future rights to enforce service
promises. The City has made enforceable commitments to provide all major
City services to the annexed area on an equivalent basis. That is what
Section 13(d)(4) and (5) require.
D. The Basis of Comparison. The trial court concluded that the Plan
failed, in part, because:
All of these [Section 13(d)(4)-(5)] services must be provided in the
same manner as they are and will be provided to the Comparable Area.
No one used the Comparable Area in determining the services. . . . The
Court concludes that the City is not homogeneous in nature in
noncapital and capital improvement services, and City-wide services
cannot be used.
(R. at 531-32.) This assumes that a municipality must identify a
particular “comparable area” when it annexes new territory and irrevocably
commit to providing the two areas with identical services.
The Statute’s requirements are not this rigid. In Chidester I, we
said:
The qualification in [Section 13](d)(4) and (5), that services be
equivalent to those in the city with “similar topography, patterns of
land use, and population density”, provides a guidepost for cities in
determining what services should be provided to the annexed territory.
It would be unreasonable to require the city to provide services to
the annexed territory that are not needed because of differences in
topography, patterns of land use, and population density. For
example, storm drains may be provided in neighborhoods which are very
flat and have no natural drainage; such drains are not often provided
in areas where the topography provides natural drainage. The idea is
to provide like services to like areas.
596 N.E.2d at 1378.
In Chidester II, 631 N.E.2d 908, we examined a few important services
to test the fiscal plan against the Section 13 equivalency requirements.
We take the same approach here.
One of the most important services any municipality provides is
police protection. The trial court found that “call for service” volume
drives the City’s police staffing, and that the City estimated annexation
area police staffing based on the City’s average service call volume. (R.
at 519.)
Call volume is a reasonable basis for projecting law enforcement
needs, and its application in the Plan will allow the annexed citizens to
enforce their right to equivalent services. After annexation, the City may
certainly allocate greater police resources to areas that have especially
high crime rates. If, however, citizens in the annexed area receive a
lower quality of service than citizens in similarly populated areas that
have comparable call volumes, the annexed citizens have a basis for
demanding more equitable treatment. The City’s approach therefore
adequately assures like services to similar areas, which, as we stated in
Chidester I, is the trial court’s proper focus.
Fire protection is also a major component of municipal service. The
court here found that the three new fire stations promised to the annexed
area would offer response times within the same four- to seven-and-a-half-
minute range as average response times in a defined Comparable Area. (R.
at 510-11.) Again, this promise is sufficiently specific to allow annexed
landowners to enforce their future rights.
We next turn to a capital service, i.e. sewer facilities. The trial
court found that the City is already providing sewer service to those
annexed citizens it is currently authorized to serve, that other parts of
the area are already served by a private utility holding a license from the
Indiana Utility Regulatory Commission, and that “[i]f additional sanitary
sewer service is needed in the Annexation Territory outside the [private
utility’s area], the City’s Sewer Utility has the capacity to provide such
service.” (R. at 518.) Annexed citizens using City service will pay the
same rates as other charged customers. (Id.) These findings demonstrate
that the Fiscal Plan is adequate with respect to sewers.
In summary, courts reviewing annexation challenges should focus on
whether the municipality made credible and enforceable commitments to
provide equivalent services to similar areas. Courts are not authorized to
dissect the minutiae of what are essentially legislative decisions. Based
on the court’s factual findings, the Fiscal Plan suffices.
E. No Entitlement to a Park. The trial court found:
40) The services to be provided by the City’s Parks and Recreation
Department to the Annexation Territory are not equivalent in standard
and scope to the services provided to the Comparable Area because the
Comparable Area has an accessible neighborhood park and there will be
no such accessible neighborhood park for the Annexation Territory.
The City looks geographically for new parks. Parks are not located
based on population density.
(R. at 514.) The City’s final argument is that the statute does not
require it to provide a neighborhood park to the annexed area.
(Appellant’s Br. at 25.)
As the City points out, a neighborhood park is a capital improvement
and falls under Section 13(d)(5). The trial court therefore erred in
applying the “equivalent in standard and scope” requirement that appears
only in Section 13(d)(4), which covers planned non-capital services.
Capital improvement services must be provided “in the same manner” that
such services are provided to areas with similar topography, land use
patterns, and population density. Ind. Code § 36-4-3-13(d)(5). The trial
court found that the City chooses its park locations based on geographic
considerations. Therefore, providing park services in the same manner does
not require the City to create a neighborhood park in the annexed area.
Summary. Based on the trial court’s findings of fact, the City met
its burden under Section 13(d) and was entitled to judgment. The trial
court therefore erred by entering judgment for the Remonstrators.
Conclusion
We reverse and direct judgment for the City.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.
-----------------------
[1] In 1999, the General Assembly amended this provision. Ind. Code Ann.
§ 36-4-3-8(b)(1)(West Supp. 2000). Now, municipalities may only postpone
annexations for up to three years as a general rule. Id. This
significantly reduces many of the difficulties this case presents.
[2] Ind. Code Ann. § 36-4-3-11 (West Supp. 1992).
[3] Ind. Code Ann. § 36-4-3-12 (West 1992).
[4] Section 13; Chidester v. City of Hobart, 631 N.E.2d 908, 910 (Ind.
1994)(“Chidester II”).
[5] We recognize that these costs will change over time. Citizens of the
annexed areas may still enforce their rights because Sections 13(d)(4)-(5)
require absolute promises that the annexed area will receive comparable
capital and non-capital service, without regard to cost. Furthermore, Ind.
Code Ann. § 36-4-3-16(b)(West 2001) provides relief if a municipality fails
to implement a Section 13 fiscal plan on a timely basis or if “the annexed
territory is not receiving governmental and proprietary services
substantially equivalent in standard and scope to the services provided by
the municipality to other areas of the municipality, regardless of
topography, patterns of land use, and population density similar to the
annexed territory.”
[6] Remonstrators presented expert testimony that two tables in the Plan
didn’t “add up” at three percent inflation. (R. at 521-22.)
[7] The court also found that the City would provide comparable street
sweeping service, (R. at 515), fall leaf pickup, (Id.), snow and ice
removal, (Id.), right-of-way mowing, (R. at 515-16), ditch maintenance, (R.
at 516), and guard rail maintenance, (Id.), to the annexed area.