“The Public Be Damned!” says Legislature, Bowing to Sprawl Lobby

SB 1573 Kills local voter say on annexations
Lege Fiscal Office lies about cost
Phony “emergency” prevents voter override

There are so many bad bills in the Legislature each year that some always slip through almost unnoticed until it is too late. Prime candidate for worst such sneaker bill of 2016’s session is the Legislature’s craven giveaway to Oregon’s sprawl lobby in SB 1573.

The bill prohibits any city from following its charter and submitting proposed annexations to the voters. A number of cities in Oregon, including Salem, have municipal charter provisions allowing all the citizens — those already in the city, and those wanting in — to vote on whether to annex new lands into the city. All those provisions are now a dead letter and the new sprawl lobby gold rush could be on.

The crowning insult to the bill was the “emergency” designation, which bars citizens from gathering signatures and forcing a law onto the ballot via a citizen-driven referendum.

The grassroots citizen group Oregon Communities for a Voice in Annexations describes SB 1573 as the culmination of a long campaign by the Oregon Homebuilders Association to stop pesky taxpayers from interfering with their annexation schemes:

SB 1573 is the latest assault by the Oregon Homebuilders Association (OHBA) and its allies in a decades-long crusade to revoke citizens’ right to vote on annexations in 30 Oregon communities with a combined population of close to 600,000.  SB 1573 is extremely bad public policy.

The citizens of these communities gave themselves the right, through the initiative process, to vote on discretionary annexation proposals in their towns.  Nearly all these “voter annexation” initiatives passed by wide margins.  Corvallis voters passed the first one in 1976.  Ever since then, development interests have been trying, thus far unsuccessfully, to void them.

All previous efforts during the past 40 years to revoke these local decisions have been rejected, for good reason, by the courts and the Legislature.

OHBA drafted the language for SB 1573 in 2014. Sen. Chris Edwards agreed to sponsor it as SBs 497 & 498 in 2015.  Sen. Edwards, to his credit, apparently had second thoughts and did not allow a hearing on either bill. At the 11th hour, the language was allowed to be “stuffed” into a bill we wrote, HB 2938-A, in the Senate Committee on Business & Transportation. The -3 version ended up in Senate Rules at Sine Die. It has resurfaced as SB 1573.

This is what the proponents are claiming:

     Claim: Citizens regularly reject annexation proposals in these communities.

Fact: The vast majority of the proposals pass.  8 of them were on the ballot in our member cities in November 2014.  All passed handily.  On the rare occasions where an annexation is rejected, as was the case in Sherwood in November 2015, it was because the community simply could not afford it.

     Claim: “Voter annexation” violates state land use law.

Fact: As you can read here, voting on annexations is “not controlled by nor subject to state land use law.”

     Claim: SB 1573 would apply in only a limited number of cases.

Fact: The annexations addressed by SB 1573 comprise the most common type that occur in Oregon.  Additionally, the bill would deny citizens in all Oregon communities the long-established right to this local control measure.

     Claim: “Voter annexation” leads to un-affordable housing.

Fact: There is no hard evidence to support this. Portland and the coast have some of the state’s highest housing costs. Neither has “voter annexation.” There are a number of factors that lead to soaring property prices. There is no evidence we’ve seen that shows “voter annexation” as being among them.

     Claim: This bill needs an “Emergency” clause

Fact: There is no “Emergency.”  Voter annexation has been part of the Oregon landscape for 40 years!

The text of the bill itself:

Senate Bill 1573
Sponsored by Senator BEYER (Presession filed.)
Relating to boundary changes; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. Section 2 of this 2016 Act is added to and made a part of ORS 222.111 to 222.180.

SECTION 2. (1) This section applies to a city whose laws require a petition proposing annexation of territory to be submitted to the electors of the city.

Notwithstanding a contrary provision of the city charter or a city ordinance, upon receipt of a petition proposing annexation of territory submitted by all owners of land in the territory, the legislative body of the city shall annex the territory without submitting the proposal to the electors of the city if:

The territory is included within an urban growth boundary adopted by the city or Metro, as defined in ORS 197.015;

The territory is, or upon annexation of the territory into the city will be, subject to the acknowledged comprehensive plan of the city;

At least one lot or parcel within the territory is contiguous to the city limits or is separated from the city limits only by a public right of way or a body of water; and

The proposal conforms to all other requirements of the city’s ordinances.

The territory to be annexed under this section includes any additional territory described in ORS 222.111 (1) that must be annexed in order to locate infrastructure and right of way access for services necessary for development of the territory described in subsection (2) of this section at a density equal to the average residential density within the annexing city.

(4) When the legislative body of the city determines that the criteria described in sub- section (2) of this section apply to territory proposed for annexation, the legislative body may declare that the territory described in subsections (2) and (3) of this section is annexed to the city by an ordinance that contains a description of the territory annexed.

SECTION 3. This 2016 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2016 Act takes effect on its passage.

The new law makes a dead letter of municipal votes on annexations. As a result, developers — operating without any constraint — will be able to destroy municipal balance sheets, pocketing the gains while socializing the costs of city services. Richard Reid of Salem, co-chair of Oregon Communities for a Voice in Annexations, wrote about the bill in an op-ed:

SB 1573 forces communities to accept growth by annexation. Even though a community may not want or need an annexation, SB 1573 “requires” cities to annex territory.

Municipal Home Rule gives Oregonians the right to petition our local governments on any subject. In May of 2000, Salem voters exercised their home rule rights to poll voters about the right to vote on annexations. Salem voters said “Yes!” and voted overwhelmingly to claim the right to vote on annexations. Now Salem is one of 32 cities in the state that can vote on annexations.

SB 1573 would take away that right to vote.

The Oregon Home Builders Association’s SB 1573 is contrary to everything that Oregon’s unique land-use planning system stands for.

Strictly market-driven community development steamrolls over a wide range of legitimate city and citizen concerns about safe, pure water, productive farmland, traffic, crowded schools, taxes and crime.

Real estate marketing is a major economic driver. Done poorly, it threatens sustainability and limits community options. Done well, real estate marketing can help sustain a local economy. Either way, all citizens, by voting and in hearings, deserve the right to support or reject real estate projects.

Now, with the passage of SB 1573, city council members, not infrequently developers themselves or in the pockets of those developers, are entirely freed from any risk that the sweetheart deals they cut for tax giveaways will be subject to public scrutiny that accompanies an annexation vote, formerly required by ORS 222.160 for those cities with annexation votes in their charters.

ORS 222.160

Procedure when annexation is submitted to city vote

This section applies when the city legislative body has not dispensed with submitting the question of annexation to the electors of the city. If the city legislative body finds that a majority of the votes cast in the territory and a majority of the votes cast in the city favor annexation, then the legislative body, by resolution or ordinance, shall proclaim those annexations which have received a majority of the votes cast in both the city and the territory. The proclamation shall contain a legal description of each territory annexed.

Most amusingly, the “see no evil, speak no evil, hear no evil” Legislative Fiscal Office analysis gave the legislators the green light by claiming that letting developers determine the pace and place of annexations in cities all over Oregon will have “no” fiscal impact. This is Oscar-worthy creative accounting, because the whole reason that municipal annexations are controversial and sometimes contested is that they do indeed have tremendous fiscal impacts on the citizens of the annexing municipality, who must pay for city-level urban services for the new property.

78th Oregon Legislative Assembly – 2016 Regular Session Legislative Fiscal Office

Prepared by:         Tim Walker
Reviewed by:           Matt Stayner Date:      02/24/2016

Only Impacts on Original or Engrossed Versions are Considered Official

Measure Description:Requires city to annex territory without vote upon receipt of petition for annexation submitted by all owners of land in territory provided territory is included within urban growth boundary of city or Metro and is, or will be, subject to acknowledged comprehensive plan of city.

Government Unit(s) Affected:Cities, Counties, Department of Land Conservation and Development, Metro

Summary of Expenditure Impact:See Analysis.

Local Government Mandate:This bill does not affect local governments’ service levels or shared revenues sufficient to trigger Section 15, Article XI of the Oregon Constitution.
Analysis: The bill requires city to annex territory without vote upon receipt of petition for annexation submitted by all owners of land in territory provided territory is included within urban growth boundary of city or Metro and is, or will be, subject to acknowledged comprehensive plan of city. Provides that territory to be annexed includes additional territory necessary to provide infrastructure and services for development of annexed territory at density planned in acknowledged comprehensive plan. Provides city is not required to hold public hearing and may declare territory annexed by ordinance containing description of territory.
The -7 amendment clarifies measure applies to a city whose laws require a petition proposing annexation of territory to be submitted to a vote of city electors. Requires additional criteria that at least one lot or parcel in territory is contiguous to city limits or is separated by only a public right of way or a body of water. Modifies language specifying that annexed territory includes additional territory to locate infrastructure and right of way access for services necessary to support a density equal to average residential density of annexing city.
The Department of Land Conservation and Development and Counties do not anticipate a fiscal impact due to the provisions of this bill. The League of Oregon Cities (LOC) anticipates that there may be a fiscal impact due to the provisions of this bill. If a city annexes territory without a vote, they may face litigation from citizens who were not allowed to vote when the city charter states that a vote must take place.  The costs of such litigation, if the litigation came to pass, are unknown at this time.

Annexation is the key step in what iconoclastic planner/engineer Charles Marohn of “Strong Towns” has rightly labeled “The Growth Ponzi Scheme” in a series of groundbreaking articles, reprinted below by kind permission of Strong Towns. Strong Towns is a membership organization.