SALISBURY — With county and city leaders at odds over the city’s current approach to annexation, a state representative has introduced legislation that would curtail Salisbury’s ability to claim land.

Rep. Harry Warren on May 31 introduced House Bill 1165, which would temporarily strip Salisbury of its ability to annex land outside of its extraterritorial jurisdiction. An extraterritorial jurisdiction, or ETJ, is the area up to a mile outside the city’s corporate limits in which the city can exercise land use and zoning regulations. Warren’s bill would be “effective when it becomes law and expires on Dec. 31, 2023.”

Warren’s goal in introducing the local bill is to catalyze a compromise.

“It is my hope that the filing of the bill will encourage and motivate them to meet, discuss it and come to a resolution,” Warren said. “In the meantime, I’m advancing the bill.”

The bill comes at the request of the Rowan County leaders, who are asking the city to pull back on annexing property outside of their ETJ — particularly by using an ordinance amendment that was passed by city council last year.

“Specifically what we’ve asked is for them to grow within their ETJ,” County Commissioners Chair Greg Edds said. “If it’s outside of their ETJ, it needs to be with a developer agreement that is voluntary and not mandatory.”

Annexation is a common method for municipalities to grow by bringing new properties into city limits. An annexed property is subject to city regulations and property taxes, but also receives city services, such as fire and police response. About a decade ago, the North Carolina legislature essentially eliminated involuntary annexation, referred to by critics as “forced annexation.”

Before and since then, municipalities have annexed land through a voluntary process, which is when a property owner requests it.

In September, the Salisbury City Council unanimously passed an ordinance amendment requiring property owners outside of the city’s limits to request voluntary annexation before being allowed to connect to Salisbury-Rowan Utilities’ water and sewer system.

Owned by the City of Salisbury, Salisbury-Rowan Utilities serves approximately 52,000 customers in the county, including residents in almost all of the county’s municipalities. Connecting to SRU is often the most inexpensive and best option for developers building a new subdivision or industrial project.

“Water/sewer as a utility is very important,” Salisbury Mayor Karen Alexander said. “It is the lifeblood of our communities, all of them that use it. And it does afford the ability to develop in an urban pattern because you can’t have small lots of very urban density and not have a utility system.”

City Attorney Graham Corriher said the ordinance amendment passed in September mirrors those of other nearby municipalities. Among those with similar rules include High Point, Kannapolis and Mocksville.

“Salisbury was beyond virtually every other similarly sized municipality in having that requirement,” he said. “We’re not unique in having this requirement, I guess is my point. We were unique, almost, that we didn’t have this requirement.”

The county’s leadership doesn’t view the requirement in the same light.

County leadership became aware of the ramifications of the new ordinance when NorthPoint, the company working on a major industrial development on Webb Road, was informed that it would need to apply for voluntary annexation into the city in order to connect to the SRU water and sewer system. NorthPoint learned of the requirement after starting construction on the parcel, which is outside of Salisbury’s ETJ.

While NorthPoint was ultimately exempt from requesting voluntary annexation because construction on the project was already underway when the requirement was added, the City of Salisbury has continued to annex other projects through the voluntary process under the new requirement.

“Since then, we’ve had other projects that are significantly outside of Salisbury’s jurisdiction that are now being annexed,” Edds said.

Edds said the city’s ordinance has also forced some developers that already had the necessary county zoning to go through the rezoning process again to be voluntarily annexed into the city. That’s resulted in unwanted delays in project start times. “And we know time to market is a significant driver of interest for these developers,” he said.

The ordinance has also sparked concern among the county’s non-municipal fire departments, which rely on taxes from their fire districts to support their operations.

“As we’re seeing growth, they’ve really looked at this coming growth as a way for them to maintain their fire departments,” Edds said. “Now when these projects are getting annexed in, that money goes away from the fire departments and it really has the potential of devastating volunteer fire departments, especially along (Interstate) 85. We’re getting a tremendous amount of calls from chiefs and firemen, asking us to figure out how to advocate.”

Edds said non-municipal fire departments and the city’s department would share tax revenue on annexed parcels, but only for a limited period of time.

The city’s annexation approach could also impact smaller municipalities that would be interested in adding nearby parcels prime for development to bring in more tax revenue, Edds said.

From Salisbury’s perspective, using the voluntary annexation requirement is a way to grow and expand its tax base.

Alexander said the requirement ensures the city is compensated for providing SRU water and sewer services.

“Obviously for us, it’s important that we’re compensated beyond just getting the water use because many of these large facilities have only a couple of bathrooms,” Alexander said.

Both the city and county have invested in extending SRU’s water and sewer infrastructure across the county. And each specific developer may take a different approach to extending water and sewer lines to its parcel, depending on a number of factors, including the property’s location relative to existing infrastructure.

Continuing to expand within the bounds of its ETJ, as the state bill would require, could prove difficult for Salisbury. Alexander said the city has grown up to its ETJ boundaries in various places, especially near I-85 where commercial demand is greatest. ETJ boundaries don’t automatically move when the corporate city limits expand.

Salisbury City Council members have been vocal about supporting growth efforts. During a budget work session on Tuesday, Mayor Pro Tem Tamara Sheffield asked new City Manager Jim Greene Jr. to grow Salisbury’s tax base. In a meeting that same day — minutes before city council met in closed session at least in part to discuss the annexation issue — Council Member Anthony Smith made a broad statement about growth.

“I just want to reaffirm our right as a city to do what we need to do to develop our economy, to bring more jobs here, to bring more tax revenue for our community, so we can do the things we want to do for the common good,” he said.

As he intended, Warren’s bill has sparked dialogue between the county and city about annexation.

Edds said conversations have been ongoing, adding that they “continue to be good and positive” and are “more focused every time.” The issue would be more difficult to work through, Edds said, if the county and city didn’t have a good relationship.

Alexander is equally hopeful that an understanding can be reached.

“We’re committed to working with (the county) through the areas in which they feel that they need our partnership for all of us to be successful,” she said. “We’re looking at that with them. I’m very committed and optimistic that we’ll work through this.”

While discussions continue, the state bill is scheduled to be heard in the local government committee on Tuesday. If it passes, which Warren said he “has no doubt it would,” it will move to the rules committee and then to the House floor.

If the bill is passed, the city would likely have no choice but to comply.

“Once a law is adopted by the General Assembly, then the city would follow it,” Corriher said. “I think we would hope it wouldn’t be adopted. We’re certainly trying to address the county’s concerns with it and work with the county as economic development speeds up in Salisbury and Rowan County and the surrounding areas.”