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SEPTEMBER 30, 1987




The City of Greenville (Greenville) appeals from an order of the Chancery Court of Washington County declaring Greenville's annexation ordinance to be unreasonable. We affirm in part, reverse in part, and render.

This case was previously before the Court in Western Line Consol. v. City of Greenville, 465 So.2d 1057 (Miss. 1985). Upon examining the chancellor's finding that the annexation was reasonable, we noted in that case that he

 had erroneously viewed his role as being only a ministerial one. We therefore remanded the cause for the chancellor, in his judicial role, to "balance the equities of the parties by weighing all relevant factors to determine if the city's claim of need is defeated by inequitable consequences to those in the annexation area." Id. at 1060.

 The chancellor conducted a second hearing at which the parties were given the opportunity to supplement the evidence presented at the original trial. After considering all of the evidence and briefs of counsel, the chancellor found the annexation to be unreasonable. The evidence and the reasons for his finding are discussed in the chancellor's opinion:

 Annexation proceedings pursuant to statute were filed by the City of Greenville on August 20, 1982. Following publication and objections, pretrial, and motions and lengthy hearings on the merits, a decision allowing and affirming the annexation was rendered by the trial court July 8, 1983. This decision was appealed to the Supreme Court, which rendered the cause to the trial court under Rehearing Opinion on March 6, 1985. In view of the Opinion of the Supreme Court, the trial court heard such further and additional evidence as the City and remaining objectors desired to present in August, September and October, 1985, called for and received additional briefs and hereby renders its decision.

 . . .

 1. Greenville's Need For Expansion:

 There has been no major change in the facts since the first hearing. Greenville's census population in 1960 was 41,502. In 1970, it was 39,648. In 1980, it was 40,613. There were six annexations between 1960 and 1980, which increased the area of the City 3.68 square miles, and added significant population. It is inescapable that the City has not been increasing in population; in fact, the population

 density inside the city limits has diminished since 1960, and the relatively stable total population count has only been sustained by the six annexations.

 . . .

 Considered as a whole, the City of Greenville's "need to expand" is not the result of increasing population, but is the "urban sprawl" that has occurred outside the present city limits as a consequence of economics, and a deliberate policy, participated in by the City, permitting lands outside the corporate limits to develop urban character, utilizing municipal services. (This Court does not consider fire protection in the annexation area a service rendered by the City. Although 165 fire calls were answered by city forces in the annexation area between October, 1982 and July, 1985, these were made under a cooperation agreement between the City and Washington County, with the County paying $250.00 per call; it therefore appears to be a service provided by the County and not a humanitarian gratuity of the City).

 . . .

 The undisputed testimony of the City's expert was that the present municipal limits are 85% built up. This hardly comports with Exhibit 46, Vacant and Developable Land, for my triangulation of the lands marked in yellow on the Exhibit within the corporate limits exceeds 15%. In addition, additional large open fields exist as shown in the aerial photograph, Exhibit 211. They may be below the 100 year flood plain, but could be developed at greater expense, as the same expert admitted in his testimony.

 Further, casual travel through the City shows vacant lots, empty houses,

 stores and other structures. It is obviously beyond the financial capabilities of any objector or combination of objectors to pay the cost of an accurate survey of the City to develop the data to dispute the City's expert testimony.

 It follows that Greenville's "need for expansion" relates to an internal need for additional population, need to integrate areas in urban use, and need to enlarge the municipal tax base rather than because the City is "bursting at the seams," and the City's case is weak on this criteria.

 2. Whether the Area to be Annexed is Reasonably Within the Path of Such Expansion.

 The City of Greenville is bordered on the west by Lake Ferguson, connected to the Mississippi River; consequently, the only directions any development could occur are north, east, south and southwest as the River curves west. Urban development, whether it be termed growth, sprawl or spread, does exist at least clustered along the major roads and highways leading to and from the City to the north, east and south. The proposed annexation includes all these "fingers" and huge areas between, as the area proposed to be annexed "wraps around" the City from Lake Ferguson on the west, north of the City, east of the City, south of the City, and southwest of the City approaching the Mississippi River. If these fingers of urban development are to be termed expansion, then they at least are "in the path of growth," and some reasonable argument can be made to include the undeveloped areas between these "fingers," as the City proposes to do, comparing the factual situation that existed in Lowe v. City of Jackson, 336 So.2d 490 (1976), wherein an annexation of some 40 square miles

 was approved.

 3. The Potential Health Hazard from Sewerage and Water Disposal.

 Exhibit 42 shows the alleged health hazards detected by the City in the annexation area. Many of these are unsightly and doubtlessly unsanitary solid waste collection sites; some are raw sewerage; and all could perhaps contaminate drainage water affecting the municipal public health. . . . The City has a legitimate interest in controlling and eliminating these hazards to the extent that they are a genuine threat to municipal health, which to some extent would involve their distance from the municipality.

 4. The City's Financial Ability to Make Improvements and Furnish Municipal Services as Promised.

 The proof shows that the City is in sound financial condition, and with the projected revenues from the proposed annexation area, can well afford the modest if not meager capital improvements proposed and provide the requisite municipal services. There are two caveats here however. One is the City's actual and contingent commitment to the "Boeing Project" testified about by the witness Tommy Hart and others at the set of hearings after remand.

 The City is now committed to a project of industrial development at the old airport facility owned by the City (which can provide 400 to 600 additional jobs), and it appears to involve a capital commitment totaling $17.8 million. The testimony was somewhat confusing to the Court, but apparently, the City is committed absolutely to a $2.5 million bond issue, the County to a $2.5 million issue, and $4.5 million should come from a state grant. This leaves $8.3 million to be raised

 otherwise, which seemed to the Court to pose a contingent risk against bond capacity to that sum, a condition not involved in the record at the first trial.

 The Court computes as follows:

 Assessed Value Greenville Plus the Entire Annexation Area: $146,894,700.00

 General Obligation Bond Limit @10% $14.7 million

 General Obligation Bond Limit @15% $22.0 million

 *Outstanding General

 Obligation Bonds $4.345 million

 Committed Boeing Project Bonds ...

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