KITCHENS, Justice, for the Court:
¶ 1. The DeSoto County Chancery Court found that the proposed annexations of both the City of Horn Lake and the Town of Walls were unreasonable and denied both municipalities' petitions for approval, ratification, and confirmation of the enlargement of their respective municipal boundaries. Because the chancellor's decision was supported by substantial and credible evidence and was not manifestly wrong, we affirm.
¶ 2. On December 20, 2007, the Town of Walls filed a petition for the approval, ratification and confirmation of the enlargement and extension of its municipal boundary, seeking to annex approximately four square miles of territory contiguous to the municipality. The City of Horn Lake filed its separate defenses, answer, and objections on March 13, 2008. Additionally, DeSoto County filed a limited objection
¶ 3. On May 14, 2008, Horn Lake filed a complaint in the nature of a petition for the ratification, approval, and confirmation of an ordinance enlarging, extending, and defining the corporate limits and boundaries of the City of Horn Lake, seeking to annex approximately nine square miles of territory immediately west of the existing city. The proposed annexation area sought by Horn Lake included almost the entire proposed annexation area sought by Walls. Walls filed an answer, affirmative defenses, and objections on June 20, 2008. The Walls Fire Protection District filed an answer and objection to the proposed extension of the municipal boundaries of the City of Horn Lake on July 21, 2008. On the same day, DeSoto County filed a limited objection to the proposed annexation by the City of Horn Lake.
¶ 4. Horn Lake filed a motion to consolidate the annexation proceedings of the Town of Walls with the annexation proceedings of the City of Horn Lake. Walls opposed the consolidation; however, the chancellor granted Horn Lake's motion on July 30, 2008.
¶ 5. Following a six-day bench trial, the chancellor issued a thirty-seven-page opinion detailing the rationale for finding that the proposed annexations by both Horn Lake and Walls were "unreasonable when viewed in the totality of the circumstances and must be denied in all respects and areas." Aggrieved, the City of Horn Lake appealed.
¶ 6. This Court has a limited standard of review for annexation matters. In re Enlarging, Extending and Defining Corp. Limits and Boundaries of City of Meridian, 992 So.2d 1113, 1116 (Miss. 2008). "The Court can only reverse the chancery court's findings as to the reasonableness of an annexation if the chancellor's decision is manifestly wrong and is not supported by substantial and credible evidence." In re Extension of Boundaries of City of Hattiesburg, 840 So.2d 69, 81 (Miss.2003). "Where there is conflicting, credible evidence, we defer to the findings below." Bassett v. Town of Taylorsville, 542 So.2d 918, 921 (Miss.1989). Moreover, "[f]indings of fact made in the context of conflicting, credible evidence may not be disturbed unless this Court can say from all the evidence that such findings are manifestly wrong, given the weight of the evidence." Id. Therefore, "[w]e may only reverse where the [c]hancery [c]ourt has employed erroneous legal standards or where we are left with a firm and definite conviction that a mistake has been made." Id.
¶ 7. "The role of the judiciary in annexations is limited to one question: whether the annexation is reasonable." Enlargement and Extension of Mun. Boundaries of City of Madison, 650 So.2d 490, 494 (Miss.1995). This Court has set forth twelve indicia of reasonableness to guide the determination of whether annexation is reasonable. Id. The twelve indicia of reasonableness are:
Id. (citing Matter of Boundaries of City of Jackson, 551 So.2d 861, 864 (Miss.1989)).
¶ 8. This Court further held that "[t]hese twelve factors are not separate, independent tests which are conclusive as to reasonableness." Id. Rather, "the ultimate determination must be whether annexation is reasonable under the totality of the circumstances." Id. Further, "municipalities must demonstrate through plans and otherwise, that residents of the annexed areas will receive something of value in return for their tax dollars in order to carry the burden of showing reasonableness." Matter of Extension of Boundaries of City of Columbus, 644 So.2d 1168, 1172 (Miss.1994).
¶ 9. The City of Horn Lake argues that the chancellor erred in finding that Horn Lake did not have a need to expand, alleging that the chancellor failed to cite evidence in support of his findings. That allegation is at odds with both the chancellor's written order and the record in this case.
¶ 10. When determining whether a municipality has a reasonable need for expansion, the following factors may or may not be considered:
In re Extension of Boundaries of City of Winona, 879 So.2d 966, 974 (Miss.2004).
¶ 11. The chancellor found that the spillover developments that Horn Lake attributed to its need to expand were actually subdivisions and other developments that were part of an area that Horn Lake previously had annexed in 2002. Specifically, the chancellor found that the "subdivision developments, particularly along and either side of State Highway 302[,] also known as Goodman Road, within the first square mile of the city's western municipal boundary and other developments are the result of spillover growth from Horn Lake... that were in place and largely developed prior to Horn Lake's 2002 annexation[,] which extended its municipal boundaries along that state highway for a period of one and a half to two miles." Further, the chancellor opined that "a municipality
¶ 12. The proposed annexation area sought by the City of Horn Lake almost entirely encompassed the proposed annexation area sought by the Town of Walls. At trial, Chris Watson, the Town of Walls's expert, explained the concept of spillover growth. Specifically, he said that "[s]pillover development can have different meanings. One meaning ... is literally a cup runneth over type spillover, and that would be ... where development occurred within the municipality, and that development began literally falling over ... the city limits." Watson stated that neither Horn Lake nor Walls fit that form of spillover development.
¶ 13. Another approach to spillover development requires consideration of the location of the development. Specifically, Watson evaluated the development of the Delta Bluff subdivision and an apartment complex near that subdivision, which were developed separately and apart from any other municipality in DeSoto County and were not spillover development from either the Town of Walls or the City of Horn Lake. Watson opined that those developments occurred at a point in time when several events were taking place: (1) flight out of Memphis, (2) development of a significant employment base from the gaming industry that had developed in Tunica County in the early 1990s, and (3) the transportation corridors provided by Highway 61, Interstate 55, and Interstate 69. Watson further reasoned that those events had led to an influx of people working at the Tunica County casinos, but living in DeSoto County, Tate County, and the surrounding area.
¶ 14. Watson also theorized that the Twin Lakes subdivisions that Horn Lake sought to annex were developed as a result of existing sewage infrastructure that was developed by North Mississippi Utility Company, which the City of Horn Lake later acquired. However, Arthur Michael Slaughter, the City of Horn Lake's expert, deduced that the Twin Lake subdivisions and newer developments have expanded because of spillover growth from the City of Horn Lake.
¶ 15. The chancellor was presented conflicting, credible evidence from experts for both municipalities, and the chancellor's finding that the subfactor of spillover development did not favor annexation by Horn Lake was supported by substantial, credible evidence, was well within his discretion, and was not manifestly wrong.
¶ 16. The chancellor found that approximately 797 people, annually, have moved into the corporate limits of Horn Lake since 2002, which was the year of the municipality's most recent annexation. Further, the trial court found that several subdivisions and housing developments had been commenced in Horn Lake since 2000. However, the chancellor also found that, except for one large apartment complex, the majority of those developments were largely vacant and/or undeveloped.
¶ 17. Slaughter testified that the population of the City of Horn Lake in 2000 was 14,099, according to the U.S. Census Bureau, and that by 2007, the population had grown to 24,133. While the population had greatly increased, Anita Rainey, the director of planning for Horn Lake, testified that residential construction had come to a complete standstill. In fact, no new residential building permits had been issued during the year 2009. Further, two
¶ 18. Faced with the foregoing evidence, the chancellor's findings that the subfactor of the city's internal growth weighed against annexation by Horn Lake was supported by substantial, credible evidence, was well within his discretion, and was not manifestly wrong.
¶ 19. The chancellor relied on Horn Lake's evidence to find that the city had 3,146 acres of vacant, unconstrained land, which equated to 30.1 percent of the existing City of Horn Lake. The trial court further found that Horn Lake had an additional 1,411 acres of vacant, constrained land on which development could occur within the existing corporate limits of Horn Lake. The amount of vacant, constrained land that was suitable for development equated to 13.5 percent of the existing city. Horn Lake did not dispute that it had 3,146 acres of vacant, unconstrained land that were suitable for development. It did argue that the 1,411 acres of vacant, constrained land were largely in the flood plain and floodway, that the areas outside of the flood plain and floodway have severe slopes, and that this land could not be developed because of utility easements.
¶ 20. The chancellor did not state whether this subfactor weighed for or against the reasonableness of annexation by the City of Horn Lake, which was not error, as the reasonableness of annexation is determined by the totality of the circumstances. In re Enlargement and Extension of the Corporate Limits of the City of Madison, 983 So.2d 1035, 1042 (Miss.2008).
¶ 21. The chancellor noted that Horn Lake's proposed annexation area was subject to the planning and zoning services provided by DeSoto County. The planning and development services provided by DeSoto County are equivalent to those provided by municipalities within the county. Because DeSoto County provides municipal-level planning by providing building inspectors, code enforcement officers, planning commission and geographic information services, the chancellor found that there was no exigent need for further zoning and planning in the annexation area. The chancellor also found that Horn Lake had failed to provide any long-range planning for the proposed annexation area.
¶ 22. The chancellor's findings with regard to this subfactor were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 23. The chancellor acknowledged that Horn Lake had experienced a significant issuance of commercial and residential building permits in years past, but also noted that this trend had ceased in 2007. Based on uncontradicted testimony by Rainey, nine commercial building permits were issued in 2008, no commercial permits were issued in 2009, twenty-six residential building permits were issued in 2008, and no residential building permits were issued in 2009. Further, Horn Lake admitted that no new homes were under construction at the time of trial.
¶ 24. The trial court's findings with regard to increased new building permit activity were supported by substantial, credible evidence, were well within his
¶ 25. The chancellor found that Horn Lake, like most municipalities, had a need to maintain and expand its tax base for financial benefit; that no environmental influences would affect the proposed annexation area; that the need to exercise control over the annexation area was minimal; that only minimal sales tax revenues would be brought in as a result of the proposed annexation; that there were minimal geographical limitations on future expansion; and that no person from the proposed annexation area had come forward and evinced a desire to become part of Horn Lake.
¶ 26. Based on the totality of the circumstances and consideration of the subfactors of the reasonableness of Horn Lake's need for expansion, the chancellor found that there was no need for the City of Horn Lake to expand. That finding was supported by substantial, credible evidence, was well within his discretion, and was not manifestly wrong.
¶ 27. In determining the indicium of reasonableness for the path of growth, this Court has held that a "city need only show that the areas desired to be annexed are in `a' path of growth [sic] this does not mean that the area is `the most urgent or even the city's primary path of growth.'" In re Enlargement and Extension of Boundaries of City of Southaven, 5 So.3d 375, 378 (Miss.2009) (quoting City of Winona, 879 So.2d at 977). The path-of-growth factors to be considered are:
Id.
¶ 28. The chancellor found this indicium to favor annexation by Horn Lake. Horn Lake does not dispute the chancellor's findings.
¶ 29. Horn Lake alleges that the chancellor's finding that the indicium of potential health hazards in the annexation area weighs against annexation by Horn Lake is manifestly wrong and ignores substantial, undisputed, credible evidence. That allegation is contrary to the chancellor's written order and the record in this case.
¶ 30. This Court has established the following factors which may be considered when evaluating reasonableness as related to potential health hazards:
In re Enlargement and Extension of Boundaries of Macon, 854 So.2d 1029, 1038 (Miss.2003).
¶ 31. The chancellor found some evidence of open dumping of garbage, standing water and sewage, and health hazards from sewage and waste disposal; however, he also found that the municipalities of Horn Lake and Walls had more problems with those issues than the proposed annexation area. The chancellor gleaned from
¶ 32. Additionally, the trial court found several homes in the proposed annexation area had on-site septic systems, and that those on-site septic systems were of little consequence to Horn Lake, as its proposal in the facilities and services plan for the proposed area of annexation indicated that only seventy-two homes were in need of sewer connections. Based on those findings, the chancellor opined that potential health hazards within the proposed annexation area were minimal. However, the chancellor found that Horn Lake had no ordinances which would require residents to connect to a central sewer system if it were available, deeming the indicium of potential health hazards to weigh against annexation by Horn Lake.
¶ 33. Because Horn Lake had no plan to require residents to connect to a central sewer system if available, there would be no ordinance to correct the use of septic tanks in areas where the soil conditions are not conducive to on-site septic systems and no ordinance to correct potential health hazards from those septic systems in the annexed areas. Moreover, evidence at trial demonstrated that the Rolling Green subdivision, part of Horn Lake's 1987 annexation, still had problems with raw sewage, and that Horn Lake had taken nearly twenty-two years to provide that annexed area with sanitary sewers. Accordingly, the chancellor's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 34. Horn Lake argues that the evidence before the trial court overwhelmingly established that the City had reasonable financial ability to deliver the services and improvements it had committed to provide the residents and property owners of the proposed annexation area.
¶ 35. This Court has considered the following factors in determining whether there is reasonable financial ability for the annexation:
City of Winona, 879 So.2d at 981-92.
¶ 36. When considering the financial condition of Horn Lake, the chancellor found that:
(Emphasis in original.)
¶ 37. The trial court's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 38. The trial court found that over the last five years, Horn Lake's sales tax receipts had grown from $3,864,329 in 2004 to $4,054,885 in 2008; however, sales-tax diversions had reduced approximately $103,000 from 2007 to 2008. Horn Lake's general tax fund collections had increased from 2003 to 2007; however, the chancellor found that to be a reflection of an increase in the tax rate for Horn Lake from thirty mils in 2003 to the current forty-two mils in 2007. The chancellor stated that the tax increase of 2007 was the second highest among all municipalities in DeSoto County.
¶ 39. The chancellor did not say whether this subfactor weighed for or against the reasonableness of annexation by the City of Horn Lake, which was not error, as the reasonableness of annexation is determined by the totality of the circumstances. In re Enlargement and Extension of the Corporate Limits of the City of Madison, 983 So.2d at 1042.
¶ 40. The chancellor found that Horn Lake's services and facilities plan for the proposed annexation area contained miscalculations which reflected incorrect information regarding the assessed value of property in the proposed area of annexation and the combined city. Horn Lake argued that the miscalculations were minor,
¶ 41. The chancellor found that Horn Lake's fund balances had remained consistent, even though the city had maintained a deficit with respect to its budget over a five-year period.
¶ 42. The City of Horn Lake issued $4.5 million in general obligation refunding bonds in November 2008. The purpose of those bonds was to construct a fire station along the western boundary of the city, and to purchase a Pierce Pumper fire truck for service from that fire station. However, the chancellor found that the city will be required to finance an additional $310,000 toward the purchase of that fire truck over three years.
¶ 43. At the trial, Slaughter estimated the bonding capacity of Horn Lake to be $18.8 million. However, on cross examination, Slaughter admitted that he had made a mistake in his calculations when determining Horn Lake's bonding capacity. When considering the totality of the circumstances with regard to bonding capacity, we are unable to conclude whether the chancellor's findings were based on substantial, credible evidence or were manifestly wrong.
¶ 44. The chancellor found that the calculations of income from ad valorem taxes may be speculative because of the miscalculations made by Horn Lake's municipal finance exert and possible reduction of assessed values within the next five years as a result of the current economic recession. Additionally, the chancellor anticipated that the revenues to the municipality from permit fees, privilege licenses, and sewer taps will be reduced because of the economy. The trial judge also considered the tremendous slowdown in the issuance of commercial and residential building permits within the last two years.
¶ 45. Based on the totality of the circumstances, the chancellor found that the indicium of the municipality's financial ability to make the improvements and furnish the municipal services promised weighed against annexation by Horn Lake. The chancellor's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 46. Horn Lake argues that, although DeSoto County provides excellent county-level planning and zoning to residents of the unincorporated areas, the evidence established that Horn Lake has an excellent planning and zoning department.
¶ 47. "This Court has upheld an annexation even when a town had no zoning ordinance and presented no evidence of any urban planning." City of Winona, 879 So.2d at 982 (citing In re Extension of Corporate Boundaries of the Town of
¶ 48. The chancellor held that:
¶ 49. This Court has said that "there is little need for municipal level zoning, overall planning, or municipal services in [a] mostly rural and agricultural area." In re Exclusion of Certain Territory from City of Jackson, 698 So.2d 490, 494 (Miss.1997). At trial, Michael Bridge, an urban planning consultant and real estate developer, testified that most of the area that Horn Lake was seeking to annex was zoned agricultural residential. Based on the testimony of Bridge and Mississippi case law, the chancellor's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 50. The City of Horn Lake alleges that the chancellor erred in holding that the proposed annexation area is generally not in need of municipal level services by Horn Lake.
¶ 51. In City of Macon, 854 So.2d at 1041, this Court said that the factors to be considered in determining whether the need for municipal services is reasonable may include:
Id. (citations omitted). Further, "in sparsely populated areas, there is less of a need for immediate municipal services." Id. at 1042.
¶ 52. The trial court noted that there had been no requests for water and sewage services because those services were provided to the proposed annexation area by either the Walls Sewer District, the Walls Water Association, Inc., or the City of Horn Lake.
¶ 53. The chancellor found that Horn Lake had a plan to provide first response fire protection for the proposed annexation area; however, that obligation lies solely with the Walls Fire Protection District, which was established by the DeSoto County Board of Supervisors in 1986. Further, that fire protection district was created pursuant to Mississippi Code Section
¶ 54. Horn Lake argues that it has a fire rating, pursuant to the Mississippi Rating Bureau, of Class 6, as opposed to the Class 8 rating of the proposed annexation area. However, Larry Carr of the Mississippi Ratings Bureau testified that the Horn Lake fire services were on the downside of a Class 6 and near a Class 7. Further, Carr opined that the deficiency points making Horn Lake close to becoming a Class 7 were a result of Horn Lake's acquisition of land in its 2002 annexation. Further, the chancellor noted that Horn Lake did not produce evidence of its attempts to "stem this downward slide of classification."
¶ 55. The chancellor did not state whether this subfactor weighed for or against the reasonableness of annexation by the City of Horn Lake, which was not error, as the reasonableness of annexation is determined by the totality of the circumstances. In re Enlargement and Extension of the Corporate Limits of the City of Madison, 983 So.2d at 1042.
¶ 56. The chancellor found that this subfactor favored annexation by Horn Lake. Specifically, the chancellor found that the city plans immediately to provide police protection to the proposed annexation area, and that, considering the number of sworn officers, patrol units, detectives, and equipment, the protection provided by the city would be superior to the protective services the area now receives.
¶ 57. The trial court found that Horn Lake had a plan for immediately providing solid waste collection services; however, that provision would provide no greater service than that currently provided by a DeSoto County contract with an independent provider. The chancellor's findings were supported by substantial and credible evidence.
¶ 58. The chancellor found that, except for some major developments in the northeast quadrant of the proposed annexation area of Horn Lake, the area was sparsely populated and consisted largely of single family residences on large lots and agricultural areas. The chancellor's finding was supported by substantial and credible evidence.
¶ 59. The trial court found no evidence indicating that natural barriers exist between Horn Lake and the proposed annexation area. The City of Horn Lake does not dispute the chancellor's findings.
¶ 60. Horn Lake argues that the overwhelming weight of the evidence establishes that the City of Horn Lake has an excellent overall record of past performance in the provision of promised services and improvements to its existing citizens, including residents and property owners previously annexed, and that the
¶ 61. With regard to past performance of Horn Lake in providing services, the chancellor found the following:
¶ 62. The trial court's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 63. The City of Horn Lake faults the chancellor for not citing specific evidence in his determination that this indicium does not favor annexation by Horn Lake.
¶ 64. When considering the economic or other impact on residents or property owners, this Court has held that:
City of Winona, 879 So.2d at 988 (quoting City of Columbus, 644 So.2d at 1172).
¶ 65. The trial court found that:
¶ 66. The chancellor's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 67. At the time of trial, Horn Lake was 83 percent white, 12.3 percent black, and 4.7 percent other groups. The chancellor found that the combined city and proposed annexation area would result in the city's being 83.6 percent white, 11.7 percent black, and 4.7 percent other groups, and that the chancellor could not say that protected minority voting strength would be seriously damaged. The City of Horn Lake does not dispute the chancellor's findings.
¶ 68. Horn Lake argues that the substantial and credible evidence before
¶ 69. The trial court found that:
¶ 70. A thorough review of the record reveals that the chancellor's findings were supported by substantial, credible evidence, were well within his discretion, and were not manifestly wrong.
¶ 71. Finally, the chancellor considered the possible impact of annexation by the City of Horn Lake on the people residing in the area serviced by the Walls Fire Protection District. The chancellor found that the Walls Fire Protection District provided services to an area that is in excess of forty square miles, that the area included the Town of Walls, the proposed annexation area of Walls, and the proposed annexation area of the City of Horn Lake. A tax of one mil was imposed by DeSoto County for the benefit of the fire protection district on all residents in that fire protection district.
¶ 72. Following Horn Lake's 2002 annexation, the city took in six square miles of the fire protection district, which was more densely populated than other portions of the district. As a result, the citizens of that six square mile area, which now is a part of Horn Lake, were required to pay taxes for city fire protection in addition to the one mil tax for fire protection from the Walls Fire Protection District. As a result of the increased taxation, residents of the six square mile area became unwilling to make donations or other contributions to the Walls Fire Protection District's operation, acquisition of equipment, or training experiences.
¶ 73. With regard to the current annexation, the chancellor found that:
¶ 74. At trial, Michael Lee Hancock gave testimony regarding the negative impact of Horn Lake's 2002 annexation on the Walls Fire Protection District. Hancock's testimony was consistent with the chancellor's findings. Accordingly, the chancellor relied on substantial and credible evidence in finding that the impact of annexation on the Walls Fire Protection District does not reasonably favor annexation by the City of Horn Lake.
¶ 75. Because the chancellor's findings were based on substantial, credible evidence, were not manifestly wrong, were well within his discretion, and because the chancellor did not employ an erroneous legal standard, the decision of the trial court is affirmed. See Bassett, 542 So.2d at 921.
¶ 76.
WALLER, C.J., CARLSON AND DICKINSON, P.JJ., RANDOLPH, LAMAR, CHANDLER AND PIERCE JJ., CONCUR. KING, J., NOT PARTICIPATING.
