Bumping borders

Some expansions lead to conflicts between cities

Posted: October 22, 2017 at 1 a.m.

James Simpson of Bentonville speaks Wednesday as he prepares to cut grass in a field on his property on Scoggins Road in Cave Springs. Simpson is a fourth-generation farmer whose family owns property in Benton County, Cave Springs, Rogers and Bentonville and has land which is involved in an annexation debate.

Dueling claims between Bentonville and Rogers to annex the same tract of land has gone to court, but many cities in the region are quietly expanding boundaries.

"Booming Benton County"

"Washington County annexations"

Roofers repair shingles Oct. 11 on a house under construction in the Scissortail development west of Arkansas 112 in Rogers

Methods of annexation under Arkansas law

1 city Election doing : Residents the annexing of the and of the area to be annexed vote in an election scheduled by the annexing city. The most votes overall decides if the annexation goes through.

2 completely Ordinance: surrounds If a city an unincorporated area, its governing body may annex the area by ordinance. Other laws on the books now prevent cities from creating new “islands” by surrounding unincorporated areas.

3 cent Petition of the : When landowners 100 per-with clear title to 100 percent of the acreage to be annexed petition to come into a city, the city’s governing body can accept the request by ordinance.

4 of Majority landowners : When with a majority title to a majority of the land to be annexed petitions for annexation, the proposed annexation is put through a waiting period of 30 days. During that time, any interested party can challenge the annexation in circuit court.

Source: Northwest Arkansas

Regional Planning Commission

Cities in Benton and Washington counties have added about 30,343 acres within their limits since 2006, figures from the Northwest Arkansas Regional Planning Commission show. If all the annexed land was put into new city, it would be the second largest city by area in Northwest Arkansas. Fayetteville has 35,453 acres, according to commission figures, and Springdale has 30,298.

Gravette’s land area in Benton County grew by 280 percent, mostly from one annexation in 2012, commission records show.

The annexation trend has accelerated in recent years. No city in Washington County annexed land in 2012 nor 2013, according to a review of records by the Washington County Clerk’s office. The county recorded only one in 2014.

Those records then show five annexations, three to West Fork and two to Spring-dale, in 2016 and three so far in 2017, one each to Greenland, Fayetteville and West Fork.

Benton County cities are annexing at a faster pace, with six in 2012 and eight in 2013, county records show. Last year saw 14 annexations with another 15 so far this year. Centerton has accepted four of those 15 annexations this year while Bentonville has acted on three.

Benton and Washington county governments face the prospect of declining revenue from sales taxes as cities grow and the unincorporated areas of the counties shrink.

The growing cities, meanwhile, increase revenue from both the sales taxes and property taxes collected in the annexed areas. The residents of the targeted areas have little chance of stopping a city if it wants to annex them.

No city is ever going to turn down growth, said Sen. Uvalde Lindsey, D-Fayetteville. Lindsey was the longtime director of the Northwest Arkansas Council before his election to the Legislature in 2009. The council fosters regional cooperation and coordination.

“Every entity wants to be successful, if you will,” he said. The benefits of annexing developing property will almost always outweigh the cost of extending city services because city services are already in place and their fixed, baseline costs are already being paid, he said.

“That is the natural draw of expansion and economic development: More people mean more resources,” he said. “More resources means better city services. More city services attracts more growth. Nobody wants to be stagnant. Historically that has been the process, and I don’t think it’s going to change. And you need density to provide some kinds of services that won’t work without it. Things like public transportation rely on density.”

DRIVING FORCES

A booming economy has created the region’s tightest housing market in at least 12 years, figures from the University of Arkansas show. The opening of new schools and improvements to roads, along with other infrastructure work, means areas outside current city limits attract more residents and the attention of cities looking to expand, city leaders say.

Northwest Arkansas is one of the fastest growing in the country, and the fastest-growing metropolitan statistical area anywhere in the south-central region, including much of Texas, said Sam Harris of Armstrong Bank. Harris, along with fellow Armstrong loan specialists Nathan Hill and Laura Bradshaw, recently spoke to the Real Estate Investors of Northwest Arkansas.

“This is the best market we’ve seen since 2004,” Harris said. The region’s housing market is tighter than any year since 2005 at least, figures from the University of Arkansas show.

Northwest Arkansas would have enough building-ready and permitted residential lots to last 29.5 months before running out if all new projects stopped right now, Harris said, citing research by the University of Arkansas, Fayetteville. A supply of two and half years is considered exceptionally tight, both said. Three to three and a half years is a more traditional range nationally, Harris said.

Such demand spurs development, and developers and investors want city services for their prospective buyers, Harris said. So they tend to develop property in areas near city borders that can easily be annexed, he said.

Creating more dwellings within city limits often would require accommodating residential zoning in traditionally commercial and office areas. Mervin Jebaraj, interim director of the Center for Business and Economic Research at the university, said residents of established neighborhoods often oppose rezoning of commercial property to accommodate apartment or townhouse projects.

Incorporated areas appropriately zoned are a tight market, both he and Harris said.

Mayor Doug Sprouse of Springdale said the traditional method of city growth is to annex areas, but there are some signs of the type of in-city development Jebaraj describes.

Rep. Clint Penzo, R-Springdale, is a home builder who said the biggest draw to new residents are new schools.

“That is what I’ve seen in west Springdale, where wanting to be by a new school is what drives people’s decision on where they want to live,” he said.

Bernice Young Elementary School and Har-Ber High School openings west of Interstate 49 in recent years, along with shopping outlets including a grocery store in the area, clearly and immediately drove up home sales and commercial development in that area, both within and bordering city limits, he said.

Cities are drawn to the area between I-49 and the Northwest Arkansas Regional Airport, and along the roads connecting the airport with the interstate and to the cities, Lindsey said. The area is where Rogers and Bentonville are in dispute. It’s is a natural growth area, both because of the improved roads leading to and from the airport and the suitable land to develop, Lindsey said.

“You fly into an airport, and then when you drive out you see a lot of chicken houses,” he said. “We’re still a rural area.”

“There is plenty of land in Northwest Arkansas, and cities will annex rather than provide city services outside of their city limits,” Jebaraj said.

GROUND SHIFTING

County officials said the trend of new residents moving into towns, and the tendency of those towns to grow, will probably mean a major cut into the tax base of their governments.

“That’s our tsunami,” said Russell Hill, Washington County assessor. The U.S. Census of 2020 is approaching. The results will decide the distribution of county sales tax revenues, which are divided proportionately between cities and the county based on population. The county’s share seems certain to go down significantly, Hill said.

“The county’s already on thin ice with very little in reserves,” he said.

Counties in Arkansas are constitutionally mandated to provide a number of services to all its residents regardless of their share of taxes. Providing services such as jails and courts with less money will be a challenge, leaders said.

The thriving real estate market is driving up property value and the property tax receipts tied to it, Hill said, but that will probably not offset the expected drop in sales tax revenue. Benton County Tax Collector Gloria Petersen made the same points.

Washington County collector Bobby Hill estimates, based on recent population figures taken since the last census, his county will lose $1.5 million out of the $6.9 million a year in county sales tax revenue it receives now.

CAUGHT IN THE RUSH

The cities’ work to expand comes at a cost, said Larry Kelly of Gravette whose home used to be in the unincorporated community of Hiwasse. Residents of the Hiwasse community asked Gravette to annex them to get away from a rival annexation attempt by Bella Vista.

When Bella Vista declared its intention to annex Hiwasse in 2012 — and take in the proposed route of the Bella Vista bypass to I-49 — the residents of the area tried to find a way to stop it.

“The only way to not be annexed by one city is to be annexed into another, and we did not want to be annexed at all,” he said.

Some landowners in the area now sought by both Rogers and Bentonville objected to joining any city. The disputed area borders Rogers and Cave Springs on the east, Bentonville on the north and Highfill to the west. Rogers announced plans for a Nov. 14 special election to annex 2,837.8 acres of the area, along with a smaller tract farther north.

Property owners spoke at an Aug. 22 Rogers City Council meeting in which the annexation election was approved. Don Rone told the council city codes and other requirements could interfere with his ranch operations.

After the council vote to go ahead with the annexation vote, property owners petitioned to join Bentonville instead. If all of the landowners in a tract of land sign petitions and file with the county to seek annexation, then the county must allow it if the annexing city’s council approves it, according to state law.

The Bentonville City Council voted to annex the land Sept. 12. Rogers sued to stop the Bentonville annexation Oct. 10.

James Simpson’s family farm of four generations is in the disputed area. It has been the family’s land to do with as they want without city regulation or pressure to develop it, he said.

“We always saw ourselves as way out in the county, but we grew up in Bentonville and always thought that when a city came here, it would be Bentonville,” Simpson said.

His brother, John, is police chief in Bentonville, he said. There was no effort by Bentonville city officials to encourage the rival annexation, Simpson added.

“I don’t disagree that Rogers has an interest in annexing along Haxton Road and out by the Scissortail,” he said, referring to a local subdivision. “They need to clean up their borders. What dropped everyone’s jaw was them going all the way to the Highfill city limits.”

Simpson noted many of the landowners found out about Rogers’ annexation plans through the media, and “that didn’t set well.”

“We asked why the city was doing this, the answer we got was that the law says we can,” he said.

Most annexations in Washington and Benton counties are voluntary annexations by willing landowners, county records show.

Arkansas law also allows a city to annex land by an election. The people in the land being annexed get to vote, but so do the residents of the annexing city. This is the procedure Bella Vista was going to use in 2012 and the one Rogers hopes to use next month.

“There is no way a small, rural area can win an election like that,” Kelly said.

Brian McDonald, a resident of the area Rogers is seeking to annex, made the same objection as Kelly about the fairness of annexation elections at the August council meeting in Rogers. The area sought for annexation has 200 residents compared with the city’s 42,000.

“We would have a better chance of surviving the Alamo in a scenario like this,” McDonald told the council.

Rep. Jeff Williams, R-Springdale, is a former county assessor who has also served as a city councilman. He now sits on the House Committee on City, County and Local Affairs. Williams said cities should try to convince areas to come into a city by voluntary petitions from affected landowners whenever possible. And cities should be willing to ask residents what the city can do to entice them to that result, he said.

Both the Hiwasse annexation into Gravette and this recent case between Rogers and Bentonville show property owners push back when they are being taken involuntarily, he said.

FAMILY FEUD

Rogers Mayor Greg Hines said the geographic reality should weigh into any dispute. Rogers seeks annexation of the areas it wants on the ballot in November because they are logical extensions of its water service area. The lay of the land, which makes those proposed annexations a logical extension of the city, are an engineering reality, he said.

“If one person can tell me with a straight face how this annexation by Bentonville makes sense from a regional planning standpoint, I’d love to hear it,” Hines said.

Mayor Bob McCaslin of Bentonville has declined to comment on a pending legal matter, but said before the lawsuit was filed Bentonville had always accepted the requests of property owners who wanted to come into the city.

Williams said so far the disputes he’s seen in Northwest Arkansas are nowhere nearly as bitter as ones his committee members has witnessed in other parts of the state. Garland County in southwest Arkansas in particular has seen intense fights between Hot Springs, Hot Springs Village and the county government.

Northwest Arkansas is fortunate to have the problems to solve that are caused by growth, he said. Other parts of the state have annexations driven by declining populations and the desire to increase a share of the tax base from a shrinking total.

Lindsey likened the conflict between Rogers and Bentonville to an intense family dispute.

“The conflict needs to be resolved, and the court is the place to do that, but I hope an accommodation can be found,” he said. “I hope this never gets to the point where one side or the other will never forgive or forget, and I don’t believe it will.

“We’ve always had our fusses and fights, but the regional concept has been a principle of ours for 30 years. It’s become who we are. It is interwoven in our fabric.”

Doug Thompson can be reached by email at dthompson@nwadg.com or on Twitter @ NWADoug.