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City waives annexation requirement for Wahl Clipper

January 22, 2019

STERLING – The City Council agreed Monday to amend an ordinance that will allow Wahl Clipper to connect to city sewer services without being annexed into the city.

The company plans to add space at its Sterling headquarters, but without a city water connection, there wouldn’t be enough capacity to handle the extra bathrooms. Prior to Monday’s amendment, commercial sewer hook-ups outside city limits were not allowed without annexation of the user.

Wahl Clipper requested that it be allowed to connect to city sewer and that the annexation requirement be waived, although the property is contiguous to the city.

The waiver, however, is subject to the user’s acceptance of a sewer service agreement – another change to the sewer connections ordinance. In addition to paying its city sewer bill, the company must pay an additional fee that would be equal to the property tax the city would receive if the business were annexed.

A concern about tax equity prompted inserting the additional fee into the agreement, city officials said. Businesses and residents just outside the city limits enjoy the benefits of infrastructure, police and fire protection without paying city taxes. Annexation issues can also create a competitive disadvantage among businesses.

The fee would be phased in over a 5-year period, starting at 20 percent in the first year, and the full amount in year 5 and beyond.

This is the first time a business outside the city limits has made a sewer connection request and sought an annexation waiver, City Manager Scott Shumard said.

“There are at least a dozen contiguous businesses outside the city limits, but some already have pre-annexation agreements,” Shumard said.

Six main criteria will be used in evaluating businesses requesting the annexation waiver. They must be within 1 1/2 miles of the city limits and be a manufacturer of goods. Several economic factors are considered, such as job creation and the city’s projected revenue from the sewer charges.

While the council approved the amendment change and Wahl Clipper’s request unanimously, not all city staff were on board.

“I’m not in favor of this amendment change,” Building and Zoning Administrator Amanda Schmidt said. “I think annexation should be black and white – no ifs, ands or buts.”

The ordinance now allows the city to offer the waiver as a local business incentive under certain circumstances, City Attorney Tim Zollinger said.

“This can be used as an economic development tool,” Zollinger said. “It provides a 5-year phase-in period for annexation costs.”

Although the city can recoup its tax money through the service agreement, staying outside city limits exempts a business from adherence to city ordinances, including its building codes.

Whiteside County has started doing commercial building inspections, but city requirements can add more layers to the process.

Next meeting

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px Helvetica} The City Council next meets at 6:30 p.m. Feb. 4 in the first-floor Council Chambers at City Hall, 212 Third Ave.

Go to sterling-il.gov or call City Hall at 815-632-6621 for an agenda or more information.

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