06/02/04 — Annexation lawyer says suit wil be filed soon

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Annexation lawyer says suit wil be filed soon

By Barbara Arntsen
Published in News on June 2, 2004 2:03 PM

Goldsboro can expect to be served with an anti-annexation lawsuit within the next couple of weeks, says the lawyer hired by the group fighting the city's latest annexation decision.

In April the council voted to annex property on the east and west sides of Salem Church road and on the north and south sides of Buck Swamp Road. Some subdivisions, or parts of subdivisions, have been included. They are Ashby Hills, Fallingbrook Estates, Morgan Trace, Buck Run, Pineview Acres, Tarklin Acres and Canterbury Village.

Jim Eldridge, a Wilmington lawyer specializing in annexation laws, was hired by Good Neighbors United to fight the annexation. Good Neighbors United is a group of several hundred people fighting Goldsboro's decision to annex their property.

Eldridge met with over 100 citizens from the area Tuesday at the Belfast Fire Department to discuss the group's legal fight against the annexation.

"I am hiring a real estate attorney, an expert, to look at whether the city complied with the requirements in several recent voluntary annexations," Eldridge said.

That includes the voluntary annexation in 2000 of the Lane-Howell property. The property contains 360 acres on the east side of Salem Church Road between Stoney Hill Road and Fedelon Trail. That annexation made the recently annexed property contiguous to city limits, a criteria for the involuntary annexation.

Eldridge said he would also be looking at the city's procedures and policies relating to the current annexation.

He is also looking at how the city plans to finance the annexation.

The city was scheduled to sell $7 million in general obligation bonds on May 11, but the state's Local Government Commission has told the city that the bonds may not be issued now.

City Finance Director Richard Durham said that the bond attorney from the Local Government Commission said the bonds couldn't be sold while there was pending litigation.

Durham explained that the Local Government Commission oversees debt issues for municipalities and won't allow a city to sell bonds and simply hold the money without a project under way.

That is a problem because the city's authority to issue the bonds expires next year.

"We have to have a signed contract or be close to starting the project," Durham said. "And we don't know when that will be."

In 1998, Goldsboro voters approved $28 million in sewer and street bonds. The sewer bonds passed by a margin of 5-1 and the street bonds by 6-1.

The city had planned to use the $22 million in sewer bonds to expand its wastewater treatment plant, make improvements in the sewage system and meet environmental regulations designed to reduce pollution in the Neuse River.

But the city opted not to issue the bonds for the improvements in the sewage system. Instead, it received a $15 million low-interest loan and a $3 million loan from the Clean Water Revolving Loan Fund. The interest rate on the state loans was about half what it would be from the sale of the city bonds.

The city then decided to use $7 million of the sewer bond money for extending sewer lines to the annexed area.

Durham said that the sewer bond proposal had been written broadly because at the time city officials did not know the specifics of the project. That is how bond money is often used for annexations.

But as long as the legal fight with residents of the recently annexed area continues, the city can't get the money from the bonds.

State law says that bonds must be issued within seven years of voter approval. That gives the city until 2005 to sell these bonds, unless it receives an extension from the state. The extension would be for no more than three additional years.

If the city can sell the bonds, it is set up on a 19-year repayment program.

Eldridge is continuing to review the more than 500 pages of documents relating to the voluntary and involuntary annexations the city sent him in late May. Copies of those documents cost $287.