ELGIN – Elgin officials have reached agreements with a property owner who had threatened to sue the city over plans to annex their property into the city limits.
The Elgin City Council voted 4-0 Oct. 7 to approve annexation and economic city sales tax rebate incentive agreements with the owner of Harland Custom Homes and Harland Properties. The council also authorized the city to publish notices of presentation of petitions for annexation from the property owner, with the city paying the cost of publication.
Councilman Travis Bennett said he was pleased that the annexation dispute has been resolved.
“I’m glad this is coming to an end,” he said.
Annexation dispute Earlier this year, city officials proposed annexing four tracts of land – 12740 NE Keeney Road, 9201 State Highway 17, 12730 NE Keeney Road and 12872 NE Keeney Road – without the owner’s consent. Harland Custom Homes and Harland Properties own the properties at 9201 SH 17 and 12740 NE Keeney Road, while the remaining two parcels are privately owned.
Attorney Kaitlyn Turner, who represented Harland Custom Homes and Harland Properties, objected to the annexation proposal. Turner said at the council’s May 13 meeting that the city should not proceed without obtaining consent from the majority of property owners in the area being annexed.
Mayor JJ Francais said at the same meeting that state law spells out one set of rules for cities that want to annex property with the owners’ consent, and another set of rules for cities that want to move forward without obtaining the owners’ consent.
Turner said that section of state law was incorrect, and her law firm was assisting another city in challenging that provision.
Harland Custom Properties and Harland Custom Homes later threatened to sue Elgin over its plans to annex those properties, but a lawsuit has not been filed, said Elgin City Clerk Machelle Reynolds. She said the city’s legal counsel and the property owner’s attorney reached an agreements for annexation and the sales tax incentive agreement, which resolved the dispute. Sales tax rebates In exchange for the sales tax rebate incentive, the property owners have has agreed that they will seek voluntary annexation into the city limits, according to the agreements. The property owners will not request or support a petition to de-annex or detach the property for 25 years after annexation.
Rebates will be calculated based on the city’s general sales tax rate at the time the agreements take effect, which is currently 4%, and will not be adjusted due to any subsequent increase in the tax rate. The rebates will be paid according to the following schedule:
• Years one through three: An amount equaling 2% of the general sales tax rate.
• Years four through six: An amount equaling 1% of the sales tax rate.
The calculation will exclude any sales tax rate increase approved after the date of the agreements, as well as any portion of the rate that is either restricted by law or dedicated for specific purposes.
The city will issue the rebates once a year based on eligible sales tax collections for the preceding reporting year, which runs from April 1 through March 31, according to the agreements. Payments are due by April 15, or within 30 days after the city receives and reviews information from the Oklahoma Tax Commission.
The total cumulative amount of the rebates shall not exceed $300,000, according to the agreements. Once that amount is paid, the city will not be required to make additional payments.
The city has agreed to provide the rebates for two reasons, said the city’s legal counsel, Amanda Mullins.
“One is the annexation,” she said. “The second is, we’re also hoping to encourage additional development of sales tax-producing property.”