Bill would give residents final say on whether they’re annexed

Tim Mattox, an 18-year resident of River Place and a member of the homeowners association board, dreads the day when he and his neighbors in the master-planned community near Northwest Austin will be officially absorbed into the city and begin receiving its hefty tax bills.

Despite pushback over the past decade from residents like Mattox — who will pay additional taxes for what they predict will be the same or worse services — the waterfront and country club community with about 1,100 homes is next in line to be annexed by Austin on Dec. 31.

While options for fighting the action other than a costly legal battle are slim to nil, Mattox and others hope that annexation reform legislation, including one bill that passed the state Senate last week, could be the answer to their prayers.

“We said, ‘Look, this is ridiculous. We need to reach out to the state Legislature and understand if this is something that can be remedied,’ ” Mattox said. “It’s our last diving catch to try to mitigate this.”

State law allows a city every year to annex the equivalent of up to 10 percent of its incorporated land — about 18,000 acres in Austin’s case — from its extraterritorial jurisdiction, the 5-mile area that surrounds city limits.

The city doesn’t need the residents’ approval, but it does have to issue varying levels of advance notice, depending on how many people live there and whether there is a longer-term annexation agreement in place. Areas with more than 100 homes typically receive three years’ notice.

RELATED: In Hudson Bend, fear of joining Austin drives effort to incorporate

Senate Bill 715, filed by Sen. Donna Campbell, R-New Braunfels, would instead require cities to get the consent of more than half of the property owners in the area targeted for annexation. The process would involve a petition for an area with fewer than 200 residents and an election for any larger area.

“This bill makes annexation a more democratic process,” Campbell said. “It allows Texans to make a decision: Do they want to be part of the city that’s trying to grab them?”

It would also prohibit “limited purpose annexation,” a practice that allows a city to annex an area in order to apply its planning, zoning, health and safety ordinances without imposing taxes or providing municipal services such as police protection.

At least three similar bills have been proposed in the House this session.

‘A war on suburbia’

City officials in Austin, San Antonio and other burgeoning Texas cities have long stood by annexation as a tool to improve the economic base and better manage growth and development.

“Areas around the edges of town are urbanizing and continuing to attract new development,” said Virginia Collier, the Austin city planner in charge of annexation efforts. “Annexation is a tool to coordinate with local service providers to meet the communities’ needs.”

Austin-based consultant TXP Inc. conducted an economic study last year for the Texas Municipal League, which opposes SB 715 and others like it, showing that states that give cities broad annexation authority have better economic and population growth and better bond ratings than those that don’t.

“If you don’t have cities, what you have is a mishmash of special-purpose districts that don’t work well together, aren’t very transparent and tax much higher than cities do,” said Bennett Sandlin, the league’s executive director.

But opponents such as Mattox view annexation as a land grab by officials trying to boost their tax revenue by taking in high-value properties. They also say it’s unfair to residents who have little power to resist such decisions yet are subject to higher tax bills.

“I call it a war on suburbia, which, fine, the city can do that if they’d like to, but we don’t want to be a part of that,” Mattox said at a Senate committee hearing last month. “It’s not our philosophy. It’s not why we chose to live in the city we live in.”

Mattox said he had never been very involved in politics but joined the homeowners association board after learning about the community’s impending annexation, hoping he could reverse its course. His estimates show River Place residents would pay at least $350 more per $100,000 of property value in property taxes and about $1,000 a year more for electricity after annexation.

James Quintero, director of the Texas Public Policy Foundation’s Center for Local Governance, which supports SB 715, called the state policy “taxation without representation.”

“Cities can effectively force themselves onto property owners without their consent and impute higher taxes, more debt and tougher regulations,” Quintero said. “In our view, that’s not only undemocratic, but it’s also un-Texan.”

Listening to the people

Collier said Austin has been thoughtful and conservative about annexation, taking in an average of less than 1 percent of total incorporated property per year over the past couple of decades. The three-year annexation process involves two public hearings and allows time for cooperation among parties, she said.

But under the proposed legislation, Collier said, “you really might not get to that step of having the public hearing. It would kind of be pre-empted by petition or election requirements.”

Of course, cities already have the discretion to consider residents’ views. In November 2015, the Austin City Council decided not to annex an area known as the Upper Bull Creek neighborhood, off Old Lampasas Trail near Spicewood Springs Road, after all nine property owners presented a united front against the annexation.

RELATED: How nine property owners resisted Austin’s annexation efforts — and won

It’s unclear whether that 6-4 decision will become a lasting precedent: Two members of that narrow majority, Sheri Gallo and Don Zimmerman, lost their re-election bids last year.

Mayor Steve Adler, voting with the minority, argued in that case that what matters is whether an area meets the city’s criteria for annexation.

“Ultimately, I’m not comfortable leaving the decision about whether or not we annex to a popular vote of the people being annexed,” Adler said at the Nov. 10, 2015, meeting.

Both Collier and Sandlin said last week they would be supportive of elections if they also included city residents, who subsidize services for unincorporated residents who don’t pay city taxes. Proponents of annexation reform disagree that current city residents deserve a say.

Would bill help River Place?

Even if SB 715 becomes law — a process that hinges on a companion bill clearing the state House and earning the governor’s signature — it might not help the residents of River Place.

An amendment in SB 715 says the election requirements would not apply to entities such as the River Place Municipal District, which signed “strategic partnership agreements” with a city.

In River Place’s case, the agreement says that the area will make the transition into full annexation in December while retaining a limited district, which would keep its ownership of parks and other open space.

Mattox was not part of discussions at the time but said that according to other board members, negotiations were “one-sided,” given that they could not refuse annexation. He said district members signed the agreement in an attempt to delay the inevitable annexation as long as possible.

The River Place Homeowners Association has hired a lobbyist to promote annexation reform legislation, and Mattox said residents hope that as SB 715 moves to the House, the amendment will be removed. But even if not, he said, the bill’s passage would be a victory.

“At least the rest of Texas going forward will be protected, which I think will be a plus for the state,” he said.

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