March 22, 2004
Dear City Attorney:
You have the following questions:
1. Can the city annex a certain piece of territory without providing sanitary sewer service
to it?
2. If the city must provide sanitary sewer service to the annexed territory, what is a
reasonable time frame for the provision of such service?
Unfortunately, the answer to neither question is clear. However, it is my opinion, that
Chapter 1101 contemplates that sewer service must be provided in annexed areas on a reasonable
schedule.
You pointed out to me that there is a belief on the part of some board members that
because sewer service is paid for by fees rather than taxes, sewer service is not among the
services that cities must provide in the plan of services. Let me dispose of that issue before I
analyze the application of Chapter 1101.
It is true that utility services are generally what are called “proprietary services,” as
opposed to “governmental services,” and that the cost of the former are paid for by fees for
services, and the cost of the latter are paid for by taxes. But the courts have made it clear in
Tennessee (and every other jurisdiction in the United States) that municipal proprietary services
are as much subject to the control of the state legislature as are governmental services supported
by taxation. There is absolutely no question that it is within the authority of the general assembly
to prescribe rules and regulations for the operation of municipal utilities. Indeed, municipal
utilities in Tennessee have been held to be agencies of the municipal government, and the general
assembly has virtually plenary authority over municipalities and their agencies.
The pertinent provisions of Chapter 1101 that deal with plans of services are codified in
Tennessee Code Annotated, ' 6-51-102(b). That statute provides that:
Before any territory may be annexed under this section by a
municipality, the governing body shall adopt a plan of services
establishing at least the services to be delivered and the projected
timing of the services. The plan of services shall be reasonable
with respect to the scope of services to be provided and the timing
March 22, 2004
Page 2
of the services.
[Subsection (b)(1)]
That provision by itself does not require any specific services be provided in an annexed
area; however, it does provide that the plan of services must be “reasonable” in two aspects:
- scope of services;
- timing of services.
The same statute further provides that:
The plan of services shall include, but not be limited to: police
protection, fire protection, water services, electrical service,
sanitary sewer service, solid waste collection, road and street
construction and repair, recreational facilities and programs, street
lighting, and zoning services. The plan of services may exclude
services which are being provided by another public agency or
private company in the territory to be annexed other than those
services provided by the county. [Subsection (b)(2).]
Subsection (b)(2), standing alone, requires that the plan of services “shall include” all of
the services enumerated therein, except those services provided by another public agency or
private company in the territory other than those services provided by the county. However,
subdivision (b)(2), when read in conjunction with subdivision (b)(1) arguably requires only a
“reasonable” scope of those services, but contains no clue as to what is “reasonable.”
Subdivision (b)(3) further muddies the waters on the question of whether all of the
services contained in subdivision (b)(2), including sewer services must be provided in annexed
territory. It provides that:
The plan of services shall include a reasonable implementation
schedule for the delivery of comparable services in the territory to
be annexed with respect to the services delivered to all the citizens
of the municipality.
At first glance, it can be argued that under subdivision (b)(3) the “reasonable scope of
services” required to be provided by the city under subdivision (b)(2) is services comparable to
those received by all other citizens of the city. That argument might be strong where a city does
not have a sewer system and provides no sewer service to any of its residents, or where the city’s
sewer service is provided by a utility district or private company. In the first case, the city does
March 22, 2004
Page 3
not provide any of its citizens sewer service, and in the second case, the city has no control over
the provision of sewer service to its citizens. However, that argument it is not as convincing
where a city has a sewer system and provides sewer service to even some, of its citizens. It is not
logical to me that if a city provides sewer service to say, 65% of its citizens (I pulled that number
out of the air; it could be any figure), it can annex territory without including sewer service in the
annexed area on the ground that it does not supply sewer service to “all” of its citizens.
Tennessee Code Annotated, ' 6-58-102 contains the policy statements supporting
Chapter 1101, one of which is that, “With this Chapter, the general assembly intends to establish
a comprehensive growth policy for this state that....(3) more closely matches the timing of
development and the provision of public service.” The major complaint with plans of services
that predate Chapter 1101 generally did not involve general municipal services, such as police,
fire, etc.; those services were usually provided in annexed areas immediately upon annexation.
The major complaint was with sewer service. Many plans of services that predate Chapter 1101
did not include sewer service, or made such vague promises about that service that it was clear
such service were never going to be provided, at least not in the foreseeable future. For that
reason, it is likely that the lack of sewer service was the primary problem that the plan of services
provisions of Chapter 1101 attempted to address.
There is no doubt that both the policy statement and the plan of service provisions in
Chapter 1101 could have been clearer with respect to the question of whether sewer service was
required to be provided in newly annexed areas. But it seems to me totally inconsistent with the
policy and letter of Chapter 1101, that a city which provides at least part of its citizens with
sewer service can annex territory and add to the number of citizens that the city is not going to
provide with sewer service.
Some cases decided by the Tennessee courts following the passage of Chapter 1101 hint
that the provision of sewer service is an important factor in determining whether an annexation is
reasonable. In the unreported case of State ex rel. Boren v. Town of Orlinda, 2000 WL 1514296
(Tenn. Ct. App.), the Court, holding the town’s annexation unreasonable because the residents of
the annexed would not benefit from the annexation, pointed to the fact that the plan of services
did not include sewer service, and found it “troubling,” that the town had annexed certain
territory 11 years earlier and had not even provided the area with sewer service. [At 1 and 4] In
Cathey v. City of Dickson, 2002 WL 970429 (Tenn. Ct. App.), the question of whether the
plaintiff could proceed with her challenge to an annexation ordinance after the city had repealed
it, but the Court noted with respect to her claim that the plan of services was unreasonable, that:
The code requires that “the governing body shall adopt a plan of
services establishing at least the services to be delivered and the
projected timing of the services. The plan of services shall be
March 22, 2004
Page 4
reasonable with respect to the scope of services to be provided and
the timing of the services.” Tenn. Code Ann. ' 6-51-102(b)(1)
(1998). Section 102(b)(2) lists the minimum services to be
included in such plan. Tenn. Code Ann. ' 6-51-101(b)(2) (1998)
[At 2] [Emphasis is mine.]
City of Kingsport v. State ex rel. Crown Enterprises, Inc., 562 S.W.2d 808 (Tenn. 1978),
antedates Chapter 1101 by many years, but there the Tennessee Supreme Court outlined the
factors the courts should consider in determining whether an annexation is reasonable. Those
factors probably still apply to annexations done after Chapter 1101:
1. The necessity for, or use, of municipal services;
2. The present ability and intent of the municipality to render municipal services when
and as needed;
3. Whether the annexation is for the sole purpose of increasing municipal revenue
without the ability and intent to benefit the annexed area by rendering municipal services. [At
812]
There may be services that the City can provide to the annexed territory, but even if it
could be successfully argued that under Chapter 1101, sewer services are not required to be
provided in an annexed area on some reasonable schedule, that service is important to the
question of whether the annexation is reasonable. Moreover, it seems to me impossible to
successfully argue that sewer service has not achieved much greater importance with respect to
that question under Chapter 1101.
Unfortunately, I do not any specific ideas about what is a “reasonable” sewer service
implementation schedule. The courts are fond these days of adopting a “totality of
circumstances” test to determine whether something is or is not reasonable. I suspect they will
do the same thing when they are confronted with the question of what is reasonable scope of
services, and what is a reasonable implementation schedule, under Chapter 1101.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
SDH/