Nearly 50 properties along Houston Drive have been placed at the top of the city’s priority list for possible annexation.

During a March 3 work session, Whitefish City Council directed city staff to proceed with possible annexation of the neighborhood.

The city has cited a need for annexation in a few areas adjacent to city limits as a way to have residents pay for the city services they already use. The water quality of Whitefish Lake also has been noted as a reason for annexation. The Houston Drive area has been considered a priority because some, but not all properties have sewer mains available to them.

Mayor John Muhlfeld cautioned that city staff will still need to further evaluate the Houston Drive area for possible annexation before a resolution would come before council for a vote.

“We are not annexing properties tonight,” he said at the work session. “If, and when, that comes to fruition you will have an opportunity to attend public hearings and comment.”

City Manager Chuck Stearns told the Pilot on Monday that city staff will immediately begin further analysis of the Houston Drive area and that the matter could return to council within the next six months.

A half dozen Houston Drive residents are already speaking out in opposition to the annexation.

Houston Drive resident Ben Cavin told council that his use of city services isn’t a reason to annex his property.

“We do not use much in the way of city services,” he said. “We have our own sewer and water. The county maintains Houston Drive. I think that’s not really applicable. We’re already severely taxed. Further increasing taxes tends to drive longtime residents from their homes.”

According to Stearns, the reason to annex comes down to financial equity between those who live within city limits and owners who are adjacent to city limits.

“Cities have often felt that for properties close to the city limits, those who are already using services aren’t paying a lot of direct taxes for what they are using,” he said.

Montana law provides six methods of annexation. For Houston Drive, the wholly surrounded land method is begin considered. For a property to be considered wholly surrounded it must be surrounded by property within the city and be impossible to reach without crossing through city limits. State law allows cities to annex wholly surrounded properties despite any and all protests.

Councilor Andy Feury said he has reservations about annexing properties because of the likely increase in property taxes faced by homeowners as a result. However, he noted that the Houston Drive lots are being considered for annexation because they are wholly surrounded.

“For residents to think they don’t use any city services because they don’t have water or sewer service is naive at best,” Feury said. “Quite frankly, unless you are able to fly a hovercraft to not ever go on our streets or use City Beach or use anything in this community outside your lot, then you do impact us. To think that your neighbors don’t pay for that while you’re getting it for free is frankly not a good way to think.”

Feury acknowledged that the city has attempted to annex Houston Drive before — in 1983 and 2000 — but because of the threat of litigation it hasn’t happened.

“It’s a guaranteed lawsuit,” he said. “We have to ask ourselves is the ultimate benefit worth taking ourselves through that process.”

Whitefish attorney Sean Frampton questioned whether the properties are actually wholly surrounded. He represents both the Houston Lake Shore Property Owners Against Annexation and the Stocking Addition Property Owners Against Annexation.

Frampton claims Houston Drive isn’t wholly surrounded because Whitefish Lake is on one side. He notes a 2005 city ordinance that annexed the lake that states the city “assures the public that Whitefish Lake is not being annexed for the purpose of facilitating future annexations.”

Stearns said the city agreed not to use the lake to establish contiguity for many areas of the lake where it did not exist — such as the north end of the lake. However, that policy does not apply to areas such as Houston Drive that are considered to be wholly surrounded.

In the case of Houston Drive, the lake is considered to be a barrier of access requiring property owners to cross through the city to access their property, Stearns noted.

Frampton also says the portion of the state law the city is using to annex Houston Drive doesn’t apply, and that it specifically prohibits the city from annexing two or more tracts at the same time.

“You can’t take a whole chunk,” he said. “Legally you can’t take everything at once — you have to take it one at a time.”

Stearns pointed out that in 2012 the city annexed multiple properties on Highway 93 South in one annexation resolution. He feels the city can do that again with the wholly surrounded method.

There are benefits for properties that are annexed, Stearns said. Residents get to vote in city elections, they get the benefit of Municipal Court and city attorney services, their garbage and recycling costs typically decrease and if they’re already on city utilities they no longer have to pay a surcharge on their water and sewer bills. City residents have a higher level of police service and also get a $200 discount on any ambulance bills.

As a result of annexation and the added city services, however, residents can expect property tax increases of about 20 percent. The cost to hook up to city sewer is anywhere from $5,000 to $15,000.

Houston Drive resident David Calabretta said if septic and water systems are working, owners shouldn’t be forced into being annexed or to connect to city services.

“I don’t see the point,” he said. “We, as a group, have come before and said we don’t want to pay more — we still don’t want to pay more. If our septic fails and water is no good then we should connect, but otherwise I don’t see the point.”

The city only requires homeowners to connect to sewer if their septic fails and the sewer main is within 200 feet of the property.

Stearns has suggested the council consider some limited financial incentives to help with annexations around the lake. He said the city could pursue grants or create special improvement districts to lower the cost to extend sewer mains or provide a one-time incentive for those that connect within one year of annexation.

Council in August 2013 set a priority list for annexation for a number of properties around the city. First on the list was Jennings Landing and East Lakeshore area, followed by Houston Drive area, West Lakeshore Drive area and Ramsey Avenue area.

City staff did preliminary research on each area and presented that to council during its work session.

Jennings Landing/ East Lakeshore area, with 16 properties, was listed as a top priority because it was believed that the city had a majority of properties who had petitioned to annex. However, staff found the city didn’t have the petitions. Annexation would have been a longer, more involved process as a result, according to Stearns.

Council decided for now to place the Jennings Landing/East Lakeshore and Ramsey Avenue areas on the back burner. It will keep the West Lakeshore Drive area as a second priority.