1 We're glad that a councilman and the City Manager have raised the question of the moral position of the City in the current annexation process. We will show that, when all the facts are aired, the City will not hold the "high moral ground" that it seeks.
2. Lincoln City was ordered by the State to annex Roads End in the early 1970's due to problems with sanitation and water supply. The City refused to do so, saying they couldn't afford it.
3. The Water and Sewer agreements were signed in June, 1978, the Water Agreement having a 25 year duration (required by State Statute) and the Sewer agreement having no expiration date. The Water agreement has no reference to the intention of the City to annex at any time. No accompanying documents can be found indicating the City's intent to annex either during the life of the agreement or after its expiration. The fact that the City's policy at the time decreed that outside-the-City areas could only receive water service when they signed consents to annexation seems to indicate that the City was making an exception in the case of Roads End.
4. The intent of the legislature was to allow unserved areas to be annexed later while receiving services in the meantime. They anticipated full agreement in the beginning, before extension of services started, not forced annexation in order to continue receiving water. Our situation is a classic case of unintended consequences, and the City is distorting the law in order to unfairly expand their tax base.
5. The City's experience under the agreement and in the years following has been positive, fiscally, rather than a burden. Roads End and the other UGB areas have subsidized the City's users due to paying twice the rate.
6. A Federal Grant was acquired by the City to build the Roads End water system and extend the City system to include an area from 39th St. north to 50th. An LID was instituted and the project as completed cost the City nothing for the portion of the system that was in Roads End. The grant imposed conditions which remain morally compelling, even though the Federal government does not see fit to enforce them.
7. Contrary to some statements in the newspapers, a reconstituted Roads End Water District exists and negotiations for a new contract had been going on before the City filed its suit against us. Negotiations could conceivably restart, although the plan which the City is following to achieve gradual annexation would seem to make such negotiation pointless.
8. When the City filed suit against RESD and individuals who had refused to sign consents or had objected to signing, we were in receipt of letters from USDA stating that the City would be in default if they shut off water solely to force annexation and that USDA could seek a remedy of specific performance of the agreement; in other words "turn the water back on"! Later, of course, a different USDA attorney reversed that position and won dismissal from the case on grounds of sovereign immunity. The case was not dismissed at that point; the judge gave our attorneys a chance to show that we were 3rd party beneficiaries or could make claims under the granteven without being 3rd party beneficiaries, but we were not able to do so and the judge decided the case in favor of the City, for the sole reason that we lacked standing .
