The Town of Ballard was incorporated in January 1890 and was governed by a five-member Board of Trustees appointed by a King County Superior Court Judge. Charles F. Treat was the first Chairman of the Board and was subsequently elected mayor in the Town's first municipal election in April 1890. Ballard achieved city of the third class status in December 1890.

Ballard entered into an agreement with the City of Seattle in 1902 whereby the latter supplied water from the Cedar River watershed. The agreement was extended in 1905. The water supply for Ballard was a central issue in the movement for annexation to Seattle. Annexation first became an issue at the time the first water supply agreement terminated. However, at a special election in December 1905, the citizens of Ballard defeated annexation by a 1033-549 vote.

At the regular municipal election in 1906, an "Annexation Ticket" appeared on the ballot and its nominee for mayor, H.E. Peck, was elected. The "Annexation Club" petitioned the City Council to call a special election and in April 1907 the population voted 998-876 in favor of annexation.

Besides the water supply issue, other concerns that led to the successful annexation movement were additional city services availability, taxation, local improvements, and the city debt. At the final meeting of the Ballard City Council on May 29, 1907, the City Treasurer reported the City's assets as $307, 568.91 and liabilities as $452,404.57.

Seattle City Council ordered City department heads to investigate the Ballard city departments and make recommendations to facilitate a smooth transition of responsibilities and activities. Reports from the Engineering, Water, Police, Health and Fire departments all suggested the maintenance of Ballard offices, equipment and staff with the former city to be referred to as the "Ballard District." Ballard became a separate ward of the City with one councilmember representing the newly-annexed area.