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Should you be worried about annexation of your township’s territory to an adjacent city? Understanding the process of annexation and what you can do about it will help you answer that question.

What is Annexation?

Annexation is the process by which territory moves from a township to a city (village annexation is a separate process for a future E-Letter). For general law townships, the annexation of their territory to cities is principally handled by a state board known as the Boundary Commission. Annexation cases can be started by a city council resolution, or by a petition filed by the property owners or electors. We most often see annexation cases in the Commission begin in one of two ways:

• A property owner who wants city water or sewer files an annexation petition with the Commission.
• A city council files a resolution with the Commission seeking to annex territory with fewer than 100 residents (because if the population is 100 or more, there is a right of election).

Once this process starts, it is very difficult for townships to win an annexation case before the Commission. The process involves a public hearing, and the Commission must apply 19 statutory criteria to make its decision; but a very high percentage of annexation cases filed are granted. So, what can your township do to avoid an annexation in the first place?

Become a Charter Township?

Unfortunately, becoming a charter township does not solve your annexation concerns and may even make your situation worse. Although some charter townships have limited protection from annexation in the Commission, the Charter Township Act has its own annexation method that makes charter townships even more vulnerable to annexation in some situations. If property owners in a charter township want to annex their property to an adjacent city, the owners simply must file a petition for an election with the county clerk, and the annexation will be decided by a vote in the city and by the residents of the area seeking to annex. The rest of the charter township has no say in the matter, and we have seen many such annexations of charter townships over the years.

In addition, to even qualify for this limited protection, the charter township must either have been formed prior to June 15, 1978, or must meet all the following criteria:

1. SEV of at least $25 million
2. 150 persons per square mile
3. Fire protection by contract or otherwise
4. Comprehensive zoning ordinance or master plan
5. Solid waste disposal by contract, license, or municipal ownership
6. Water or sewer services, by contract or otherwise
7. Police protection through own department or contract with the sheriff

Most townships do not meet these criteria, and even if they do, the Charter Township Act presents its own annexation challenges, as discussed above. As a result, we do not recommend that townships become charter townships to protect themselves from annexation. But there are other strategies we have found that do work.

Planning is the Best Defense

Planning for future land uses and needed infrastructure is your most effective long-term strategy to avoid annexation. If development of property is in your future, and it will require water and sewer services that you currently do not have, start thinking now about how you can provide those services. Consider grants (like ARPA) and other opportunities for either building or contracting for water and sewer service. Don’t wait until development is on your doorstep to do something about these needed services, because by then it will be too late.

Act 425 Agreements

You may be able to negotiate a contract under Act 425 with the city to conditionally transfer the property in place of annexation. Under such an agreement, it is possible (if the city is willing) to share the property taxes from the new development for up to 50 years, with a possible renewal of another 50 years. This option can often result in a “win-win” for both the city and the township and avoids the controversy and expense of an annexation case.

Act 108 Agreements

Similar to Act 425, Act 108 agreements allow the city and township to share property tax revenues from new development. The main difference is that, under Act 108, the property is annexed to the city immediately and permanently, rather than conditionally transferred for a term of years. But there is no time limit for how long the city and the township can agree to share the tax revenues.

“White Knight” Agreements under Act 425

If the city is unwilling to negotiate a reasonable Act 425 agreement, explore whether other nearby cities, villages, or townships would be willing to give you a better deal under Act 425. If you can make such a contract, it will prevent the city from annexing your territory.

City Detachment

If other defenses are not available, you may want to turn the tables on the city by detaching their territory to the township. Detachment starts with a petition signed by city and township electors equal to at least 1% of the combined city and township population (at least 100 signatures, and at least 10 signatures from the city and 10 signatures from the township). Detachment allows property to be removed from a city and returned to the township by an election in the city and township combined (with the result determined by the total combined township and city vote). It requires no involvement before the Boundary Commission and can be accomplished in a few months. Detachments have proven successful in several townships, even when the township’s population is less than the city’s. A detachment can also be a useful catalyst to bring the city to the bargaining table to negotiate a more reasonable agreement under Act 425 or Act 108.

Conclusion

We hope this information helps you better understand your options to protect your township boundaries. If your township is facing a current annexation threat, or if you wish to explore how you can act now to protect your boundaries in the future, our firm has a great breadth of experience in handling annexation matters and would be happy to address any questions or to assist you in defending your boundaries.

— William K. Fahey

This publication is intended for educational purposes only. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.