City Council Meeting Date: March 18, 2024
To: Mayor and City Council
From: Ben Martig, City Administrator
Title
Approve Orderly Annexation Agreement with Northfield Township.
Body
Action Requested:
The Northfield City Council is being asked to approve a Resolution approving a new orderly annexation agreement (OAA) with Northfield Township.
Summary Report:
An Orderly Annexation Agreement (OAA) designates a Subject Area as in need of orderly annexation and contains terms and conditions for future annexation.
The City of Northfield and Northfield Township previously entered into a joint Orderly Annexation Agreement in 2001 (attachment 4). The OAA was set to expire on December 31, 2021 but has been extended multiple times while discussions were ongoing for a new OAA.
A select committee of City Council members, City staff, and City attorneys have been working with Supervisors and the Clerk from Northfield Township to update and approve a new OAA between the two entities.
The Orderly Annexation Agreement and Exhibits, as approved by the Northfield Township Board of Supervisors at their February 11, 2025 meeting, is attached (attachments 1-3). Specific areas of the agreement are noted below in more detail:
Subject Area
The Subject Area of the OAA is divided into two areas - Area I and Area II. Area I consists of properties identified by the City that may be targeted for development during the term of this agreement. These properties will be eligible for annexation should they meet the criteria(s) identified in the agreement. Area II consists of property that will likely not be targeted for development during the term of this agreement, but the City would like to preserve as agricultural and rural property until such time as development is likely to occur. These properties will not be eligible for annexation except for the protection of the public health and safety and/or because of immediate environmental concerns as noted in the agreement. Area II will be held to the Rice County zoning requirements that are in place at the time of the signing of this agreement. Should Rice County change their requirements, the City will have the option to renegotiate or terminate the agreement.
Exceptions
Two property areas in Area II were identified by Northfield Township as exceptions to the agreement. The properties identified currently have plans in place or have recently subdivided their property and will be grandfathered into the agreement. These properties are noted in Exhibit 3 in dark gray.
Reimbursement
The City will pay Northfield Township $750 per acre at the time land is annexed into the City. This calculation has changed from the last agreement. The previous agreement reimbursement was calculated using a formula contingent on development, with payments spread across multiple years. The City and Township agreed that a simplified alternative would be more beneficial to all involved. City staff compared various payment options and after consulting the Council Township Committee, $750 per acre was the number that was determined was fair to the Township for taxes lost when property is annexed into the City.
Acreage Limits
The previous OAA had limits on how many acres the City could annex in during a five-year set period. These limits were no more than 80 acres annually or 160 acres during the set five-year periods. The updated agreement has acreage limits of 100 acres per year or 300 acres over a five-year rolling (not set) period.
The City Council approved 1.11 Annexation Policy at their February 18, 2025 meeting. It is attached for reference (attachment 5) as is a link to MN State Statute 414.0325 Orderly Annexation in Designated Unincorporated Area is attached (attachment 6). The attached OAA does differ from the recently approved Annexation Policy in several areas, such as acreage caps and the tax reimbursement amount.
Alternative Options:
The City Council can choose not to approve the agreement, but staff does not recommend this.
Financial Impacts:
There are no financial impacts of approving the OAA agreement, but as part of the agreement, the City will pay Northfield Township $750 per acre at the time land is annexed into the City.
Tentative Timelines:
ü March 12, 2025 Northfield Township Board of Supervisors approved updated OAA
• March 18, 2025 Northfield City Council asked to approve updated OAA