An annexation request by Josh and Shelby Farnham was voted down by the Kalispell City Council on Monday.

The rejection came after the annexation question spent the last three months tabled and triggered larger talks about whether all annexations should be at least cost-neutral for the city.

“I’m not particularly comfortable annexing this property. I wanted to be. I tried so hard,” Mayor Tammi Fisher said of her vote against it.

The annexation failed 6-3, supported only by council members Jim Atkinson, Randy Kenyon and Wayne Saverud.

The Farnhams had asked the city to annex 3.5 acres and their home at the corner of West Spring Creek Road and Three Mile Drive. They wanted a business zone to operate a drive-through coffee stand that Flathead County won’t allow with its agricultural zoning and West Valley Neighborhood Plan.

Council members questioned the annexation after a routine cost-of-services analysis found the Farnham property would cost Kalispell $2,600 a year more for services than it would pay in taxes.

Such studies are done for every annexation request but use only generic, per-capita costs. Planning staffers did a more thorough and case-specific analysis and later revised that figure down to about $522 a year.

“Any additional commercial development would push it into the plus category,” Planning Director Tom Jentz wrote in a memo to the council.

Jentz recommended approval of the Farnham annexation and argued that development right outside the city limits results in the same additional demand for city services and no tax revenue for the city unless the property is annexed.

The planning office estimated that while the annexation would cost $1,775 a year for fire, police, road maintenance and park services, by denying the annexation the city would go without $744 in yearly special assessment revenue, $509 in yearly property tax revenue and $2,637 of one-time impact fees.

“If we don’t annex, the city does not get any beneficial revenue from them but they can continue to use” city services, Jentz said, pointing to use of city parks as one example.

Council member Tim Kluesner disagreed.

“Saying you’ll miss out on revenue, to me that’s kind of greedy,” he said. “We’re not missing out on anything because they’re not part of the city right now.”

Council member Bob Hafferman questioned why the Farnham annexation would not require an extension of sewer or water lines or the installation of a hydrant for fire protection. He called approval of the requested annexation a return to the “same mistakes” of the past where the city annexed land without any ability or plan to eventually extend or provide services.

A planned unit development overlay supported by the Kalispell fire chief would have required the extension of water service and the installation of a hydrant before any larger commercial development could occur on the Farnham property.

Mayor Fisher had proposed a new policy to let Kalispell negotiate and charge a special annual fee on annexed properties until they are at least a break-even deal for the city. That proposal has died with the Farnham request.

“The initial theory I thought was fabulous was we could somehow generate some sort of agreement [to cover] any deficiencies,” Fisher said Monday. “With further research, it looks like I’d be taxing and state law doesn’t allow that. Great idea, no legal basis.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.