Incorporation - Pros and Cons
Becoming an incorporated entity has numerous advantages but also carries various responsibilities. In Georgia, municipal corporations (regardless of geographic size or population) are responsible for complying with a host of administrative, reporting, and record keeping laws including those related to comprehensive planning, solid waste management planning, financial management, ethics, open meetings/ open records, and elections laws. These laws need to be understood by residents of the area interested in incorporation, because once the charter is granted, one (or more) qualified administrative staff person(s) must be able to take over the record keeping requirements.
Some benefits to becoming a city include:
- ability to elect city representatives (mayor and council/commission);
- ability to establish local ordinances and regulations, e.g., planning and zoning;
- ability to provide a higher level of services to your residents, e.g., recreation, water and sewer;
- ability to receive state and federal grants, loans, and permits;
- to preserve a community's unique or historic identity;
- eligibility for membership in or affiliation with organizations that provide training, advocacy, technical support, e.g., Carl Vinson Institute of Government, Regional Development Center, Georgia Municipal Association, etc.
The statutes that set forth the minimum requirements for incorporation are contained in the Georgia Code, mainly in Chapter 31 of Title 36. The minimum standards for the original incorporation of a municipal corporation are generally described in the following section.
State Requirements for Incorporation
Requirement for Local Act
Municipal incorporation is accomplished through the granting of a local act by the General Assembly.
The geographic area proposing incorporation must have a total residential population of at least 200 persons and an average residential population of at least 200 persons per square mile for the total area.
At least 60% of the area proposed for incorporation must be developed for residential, commercial, industrial, institutional, governmental, or recreational purposes. The area must be subdivided into lots and tracts so that a minimum of 60% of the total acreage consists of lots and tracts that are five acres or less in size. However, this lot size requirement has an exception in that the 60% calculation does not count any land that is being held for future development or subject to a contract for future use for commercial, industrial, governmental, recreational, or institutional purposes.
Requirements for Certificate of Incorporation
The author of the bill granting a municipal charter must certify that the minimum statutory requirements have been met. Evidence that the population and development requirements have been satisfied, including official census figures, maps, photographs, or surveys, must be used in order for the author to certify that the requirements have been met, but such evidence does not need to be included in the certification itself. This certificate becomes a permanent part of the charter.
Active vs. Inactive Municipalities
Beginning in July 1995, state law required that municipal corporations must meet certain minimum standards or risk becoming "inactive". Since the law went into effect, few cities have been designated inactive. The standards primarily require that the municipality provide a basic level of services, and define the number and types of services that must be provided. As a result of the passage of HB 36 in the 2005 legislative session, newly incorporated cities have two years to comply with the inactive municipalities law, as well as certain other reporting requirements.
According to the statute (Code Section 36-30-7.1), an active municipality must:
1. Provide at least three of the following services, either directly or by contract:
a. Law enforcement
b. Fire protection and fire safety
c. Road and street construction or maintenance
d. Solid waste management
e. Water supply or distribution or both
f. Wastewater treatment
g. Stormwater collection and disposal
h. Electric or gas utility service
i. Enforcement of building, housing, plumbing, and electrical codes and other similar codes
j. Planning and zoning, and
k. Recreational facilities;
2. Hold at least six regular, monthly or bimonthly, officially recorded public meetings within the twelve month period prior to execution of a certificate stating that the municipal corporation meets the minimum standards for determining an active municipality; and
3. Qualify for and hold a regular municipal election as provided by law.
The governing authority of each municipal corporation is responsible for filing certification with the Georgia Department of Community Affairs confirming that the municipal corporation meets the minimum standards for an active municipality. Failure to meet these standards results in the termination of the legal existence of the municipal corporation, resulting in the loss of all assets, property, and legal rights as a municipal corporation and causing the dissolution of any local authority created by the former municipal corporation. If this occurs, the state empowers the county to use the assets of the municipal corporation or local authority to retire any outstanding debt.
Residents in communities that are interested in becoming incorporated municipalities should familiarize themselves with the requirements for incorporation and should understand the standards for remaining an active municipality. Furthermore, it is critical that residents understand the administrative (official reporting and record keeping) requirements that will be necessary once municipal incorporation is achieved. Finally, communities should seek legal counsel from an attorney who is familiar with state laws related to local governments. Once communities have a good understanding of what is required to become (and remain) incorporated, residents should contact their state legislator to request sponsorship of a local act creating a municipal charter.