CAROLINA POWER v. City of Asheville
| Decision Date | 25 June 2004 |
| Docket Number | No. 631A03.,631A03. |
| Court | North Carolina Supreme Court |
| Parties | CAROLINA POWER & LIGHT COMPANY v. The CITY OF ASHEVILLE. |
Van Winkle, Buck, Wall, Starnes and Davis, P.A. by Larry S. McDevitt and Craig D. Justus, Asheville, for plaintiff-appellant.
Robert W. Oast, Jr. and William F. Slawter, Asheville, for defendant-appellee.
This case concerns legislative policy and procedure as it relates to undeveloped land desired to be annexed by a municipal governing board, pursuant to N.C.G.S. § 160A-48 which defines the "character" of an area to be annexed. Specifically, the issue before this Court on appeal is the proper interpretation of the exception set forth in N.C.G.S. § 160A-48(d)(2) as it relates to areas of land that are not developed for urban purposes, an issue of first impression for this Court. The Court of Appeals' majority opinion concluded that the language of this subsection of the statute allows for annexation of the non-urban or undeveloped parcels at issue because the parcels, on at least sixty percent of their external boundary, are adjacent to areas which are developed for urban purposes. Because we conclude that this is not what the statutory language proposes and intends, we reverse the decision of the Court of Appeals and remand this case to that court for further remand to the trial court.
On 22 February 2000, the City of Asheville ("the City") adopted a resolution of intent to annex approximately 1,500 acres in the Long Shoals Area, including properties owned by Carolina Power & Light Company ("CP & L"). This acreage was being utilized in a variety of ways. The largest single property and use within the entire area is the steam-generated electrical power plant owned and operated by CP & L. This property includes the power plant, Lake Julian, and other associated facilities.
An annexation services plan ("ASP") depicting the boundaries of the Long Shoals Area to be annexed was approved by the City on 15 March 2000. The ASP purported to qualify the Long Shoals Area under one of the five available standards or tests specified in N.C.G.S. § 160A-48 for determining whether an area is "developed for urban purposes," which test is set forth in subsection (c)(3) and is known as the "Urban Use/Subdivision Test." This test, in essence, provides that an area is developed for urban purposes if at least sixty percent of the total number of lots in the area are used for residential, commercial, industrial, institutional, or governmental purposes and is subdivided into lots such that at least sixty percent of the total acreage of the area, not counting that used for commercial, industrial, governmental, or institutional purposes, consists of lots three acres or less in size. N.C.G.S. § 160A-48(c) (3) (2003).
Richard Cowick, a consultant from Benchmark, Inc., was hired by the City to classify the character of the property to be annexed. Cowick reported that 101 out of 134 lots or tracts in the Long Shoals Area, or 75.37 percent, were actively used for residential, commercial, industrial, institutional, or governmental purposes. Cowick and the City also reported that only 114.06 acres in the Long Shoals Area were undeveloped areas or developed areas being used for residential purposes. Of that total, it was contended that 72.17 acres, or 63.27 percent of the undeveloped or residential areas, consisted of lots or tracts three acres or less in size, thus bringing the Long Shoals Area within the standards set forth in N.C.G.S. § 160A-48(c)(3).
In its ASP, the City classified 288.21 acres out of the 1,500 acres of the Long Shoals Area as "non-urban," or not developed for urban purposes. The City excluded this acreage from the subdivision test calculations. These 288.21 acres are separated into five, noncontiguous tracts denominated as Non-Urban Areas 1 through 5. The external boundaries for Non-Urban Area 1 and Non-Urban Area 4, consisting of 122.75 acres and 66.51 acres respectively, are not adjacent to the City's existing municipal boundary line.
On 23 May 2000, a public hearing was held concerning the annexation of the Long Shoals Area. On 13 June 2000, the City adopted Ordinance 2708, which purported to annex the Long Shoals Area, including the CP & L property, effective 1 July 2001. With the adoption of the ordinance, the City modified some of the calculations for the Urban Use/Subdivision Test referenced in its ASP, determining that 63.08 percent of the total acreage of lots undeveloped and lots used for residential purposes consisted of lots or tracts three acres or less in size. The City did not modify any of its prior determinations from the ASP for Non-Urban Area 1 and Non-Urban Area 4. Within Non-Urban Area 1, there is a farm of over thirty acres that is not contiguous to the existing city limits which the City unsuccessfully attempted to classify as urban and annex in a prior case. See Asheville Indus., Inc. v. City of Asheville, 112 N.C.App. 713, 436 S.E.2d 873 (1993)
.
On 11 August 2000, CP & L filed a petition for review in Superior Court, Buncombe County, challenging the City's adoption of Ordinance 2708. CP & L contended that the City erroneously characterized as "Non-Urban," under N.C.G.S. § 160A-48(d)(2), the residential or vacant properties in Non-Urban Area 1, including the farm, and in Non-Urban Area 4, as those areas are not adjacent to the existing municipal boundary line as required by the statute. With such characterization, CP & L argued that the City erroneously excluded that acreage from the Subdivision Test in N.C.G.S. § 160A-48(c)(3), resulting in a false percentage of at least sixty percent, which ostensibly met the Subdivision Test requirements.
At trial, the parties stipulated that a 4.4-acre tract owned by the Meece family was incorrectly listed as commercial and should have been classified as a residential lot larger than three acres in size. The effect of this reclassification on the Subdivision Test was to decrease to 60.71 percent the percentage of undeveloped lots or those used for residential purposes consisting of lots or tracts three acres or less in size.
The trial court affirmed the City's Annexation Ordinance 2708. CP & L appealed the decision to the North Carolina Court of Appeals. The Court of Appeals' majority opinion affirmed the trial court's ruling, with Judge Tyson dissenting on the issue of the City's compliance with N.C.G.S. § 160A-48(d)(2) as it related to Non-Urban Area 1 and Non-Urban Area 4. CP & L appealed that decision to this Court as a matter of right, based upon the dissenting opinion. For the following reasons, we reverse the decision of the Court of Appeals.
Involuntary annexation is by its nature a harsh exercise of governmental power affecting private property and so is properly restrained and balanced by legislative policy and mandated standards and procedure. Annexation is initiated upon the decision of a municipal governing board to extend the municipal corporate limits, and upon challenge by a property owner, the extent and implementation of this decision must comply with legislative intent. The declaration of state policy for annexation by municipalities having a population of 5,000 or more persons, as set forth in N.C.G.S. § 160A-45, specifies that annexation should be done in accordance with uniform legislative standards to provide "governmental services essential for sound urban development and for the protection of health, safety and welfare in areas being intensively used for residential, commercial, industrial, institutional and governmental purposes or in areas undergoing such development." N.C.G.S. § 160A-45(2) (2003) (emphasis added).
In N.C.G.S. § 160A-48, the General Assembly has carefully specified the standards which must be met in order for any area to be annexed, so as to prevent municipalities from extending their boundaries arbitrarily or without due regard for the policy, reasons, and standards mandated by the legislature. Subsection (a) of this statute states that a municipality may extend its corporate limits "to include any area (1)[w]hich meets the general standards of subsection (b), and (2) [e]very part of which meets the requirements of either subsection (c) or subsection (d)." N.C.G.S. § 160A-48(a)(1), (2) (2003) (emphasis added). Subsection (b) of this statute begins by stating that: "The total area to be annexed must meet the following standards:", and subsection (c) of this statute begins by stating: "Part or all of the area to be annexed must be developed for urban purposes." N.C.G.S. § 160A-48(b), (c) (2003) (emphasis added). For purposes of this case on appeal, the general standards of subsection (b) are not relevant, and our focus is solely upon subsection (c)(3), the Urban Use/Subdivision Test to determine an area developed for urban purposes, and subsection (d)(2), the exception provision for including in the area to be annexed an undeveloped area if it meets the conditions specified therein.
Areas that do not meet the test of subsection (c)(3) of section 160A-48 are by implication "non-urban areas" or areas not developed for urban purposes. These areas are still subject to annexation if they meet the requirements of subsection (d). The purpose of subsection (d) is "to permit municipal governing boards to extend corporate limits to include all nearby areas developed for urban purposes and where necessary to include areas which at the time of annexation are not yet developed for urban purposes but which constitute necessary land connections between the municipality and areas developed for urban purposes or between two or more areas developed for urban purposes." N.C.G.S. § 160A-48(d) (2003). The specific wording of subsection (d), and more narrowly, (d)(2) is at the heart of this case. Subsection (d) states in part:
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