They went kicking and screaming, but anti-annexation homeowners will become city neighbors in December 2008.

A Dallas judge has ruled Midlothian's basic service plan meets the state's requirement for residents in two tracts set for annexation next year. The ruling - the first in the state to fully test an annexation process enacted by the Legislature in 1999 - was heralded as a victory by city leaders and as a confusing defeat for Rural Citizens Against Annexation.

"The statute limits an arbitrator's role to working with the service plan," said Brad Young, of RCAA. "We feel the arbitrator couldn't say 'yea' or 'nay' to annexation. She didn't bring both sides closer together and we found that surprising."

The legal battle started two years ago when Midlothian announced intentions to annex two unincorporated 'donut holes.' The tracts contested included McAda, Daisy, Kirk and Clinton streets just south of FM 1387 and a larger tract south of town that includes Starwashed, Clearview, Belmont, Allen, Apple and King Arthur streets.

The two tracts total about 1,240 acres and 500 homes.

"We're elated and relieved the process worked," said Midlothian Mayor Boyce Whatley. "We're pretty exhausted. No wonder why other cities in Texas have held off on annexing populated areas - waiting for someone else to go first under the new state laws. This has been one huge effort that seemed to go on forever, that tapped our resources and challenged our resolve. But with a circumspect and fair arbitrator - we made it. The state laws were certainly not written to favor our Texas cities."

RCAA members feel it was obvious state law doesn't favor individual Texas landowners either.

Young said there is an appeal process but he doesn't know if RCAA will pursue it.

"We've already incurred $60,000 to $70,000 in legal bills and that is part of the reason most have not followed this process to arbitration," said Young. "We will take this to our group and see if they want to pursue it any further."

Midlothian's two-day arbitration process followed months of negotiations with annexation representatives appointed by the Ellis County Commissioners Court.

The city also hosted two community meetings last year where the city ventured out into neighborhoods adjacent to the areas to be annexed to hear from those who would be affected most. Those meetings saw more than eight hour of public comment with city councilmen called communists and annexation compared to Iraq's invasion of Kuwait.

Councilmen were repeatedly threatened that if they annexed these two tracts those new city voters would vote them out of office.

City councilmen and staff listened politely, answered questions and moved forward with the annexation process.

City officials then offered the annexation areas an "enhanced" service plan that included parks, improved roads and fire protection, streetlights and waving fees for city services. Annexed areas would have been at the top of the list for these improvements under the city's enhanced service plan.

"We offered them a lot and were very disappointed when their (RCAA) leadership turned it down," said Whatley. "We will work in those improvements but they will be on a list just like every other neighborhood in the city."

Young said he is not a lawyer, but he felt the judge missed the point of arbitration - bringing two passionate sides to an agreeable compromise.

"I feel she exceeded the scope of her duties and the spirit of the law as it was intended by state lawmakers when they enacted it," said Young. "This ruling is a big deal to us and to all Texans living outside the city limits."

Dallas-based arbitrator Laird Lawrence issued her findings on Nov. 16, ruling Midlothian's basic service plan did meet the requirements of state law, thereby removing Midlothian's last hurdle to officially bring Tract A and Tract B into the city, effective December 2008

City Manager Don Hastings said he was disappointed when RCAA turned down the enhanced plan and surprised they decided to take their chances with arbitration.

"The city had negotiated in full good faith," said Hastings, "and committed to things that no other city in Texas has ever placed in an annexation plan, such as an offer for customized, community-prepared rural zoning regulations, five years of fee waivers, accelerated capital improvements and enhanced services that would have exceeded the standards of comparable city neighborhoods."

Midlothian adopted a plan to annex the areas referred to as Tracts A and B on Nov. 22, 2005, citing the fact that Tracts A and B are located relatively close to the city center and are entirely enclosed by city jurisdiction.

Midlothian's rural appeal has attracted thousands of residents to town over the past five years. Midlothian had a city population of roughly 7,000 people in 2001 and the city now has an estimated 14,000 residents.

"These are not far-flung communities more related to Maypearl or Mansfield or Waxahachie," said Whatley. "These neighborhoods are very much a part of the Midlothian community, yet are not paying property taxes and are not participating in the local planning and political process."

City officials have repeatedly said annexation is more than just cleaning up a curiously drawn map - it's making all who use city services pay their fair share.

"We just completed a cost of service study for fire and EMS services, and it clearly shows that city residents are providing a sizable subsidy for ETJ (Extra Territorial Jurisdiction) residents, who pay only seven-cents per $100 of taxable property, while the true cost of service is close to double that amount," said Hastings. "We welcomed the RCAA or others to review the methodology and findings of this study, but no one has successfully challenged it yet."

Hastings said other city services used by county residents are subsidized by current Midlothian taxpayers.

"One-half of all our parks and recreation users live in the ETJ and don't pay city property taxes," said Hastings. "Yet city property taxes pay the lion's share of the parks budget.

"Annexation is a normal and natural process that's been used across Texas for decades now to spread the costs of services and ensure taxpayer equity," Hastings explained. "In fact, nearly all Midlothian citizens and properties were annexed at one time or another. That's just the way Texas cities grow."

Whatley advises existing city residents to contact the council with their concerns and comments about annexation and the need to achieve greater fiscal equity.

"We always hear from the opponents of annexation," said Whatley, "but rarely from the city residents who otherwise benefit from lowered tax rates achieved by spreading the cost of service among all those who benefit - regardless of what side of the city boundary line they live on."

Midlothian City Hall can be reached by calling 972-775-3481.

RCAA can be reached by calling Young at 972-723-0608.