City annexes north Austin land along city’s edge

City annexes north Austin land along city’s edge

Written by Rachel Youens Friday, 07 December 2007

When developers built the Anderson Mill subdivision in the ’70s, the area was just outside the city limits and thus not served by Austin utilities. The developers applied for Austin annexation, and when the city responded that they weren’t in a position to take on the area, citizens decided to run their own water and wastewater through a Municipal Utility District without becoming Austin annexed.

In 2008 Northwest Austin will grow by 1,362 acres as the city annexes this area and other land on the fringes of Austin. Much of the Anderson Mill area, previously a hole in the city’s annexed land, will join as full purpose Austinites, and will become one of the last northern areas to be annexed as the city uses up the last of the unclaimed land north of the city.

“The way the annexation program works is that we track development,” said Virginia Collier, principal planner for the Austin annexation department. “Areas outside the city limits, but adjacent to limits, come in and file a site or subdivision plan and request utility extension, and as they’re getting ready, we look at annexing them. The city limits really follow the developing properties. Sometimes unannexed holes form in the city because there’s not a lot of benefit in annexing something that’s not developing yet.”

Growth through annexation is necessary to a city’s viability. First, it protects the city’s tax base. When a city annexes land area, new commercial or residential development that moves into the area gives the city new sources of property and sales tax.

Secondly, annexation allows the city to grow in a way that is more efficient and with higher quality of life. When an area is annexed, the city can begin to apply the zoning and development standards that ensure new areas are compatible with the rest of the city. Annexation also requires the city provide utilities such as trash collection, wastewater and even libraries, so by annexing an area, it ensures that new parts of Austin will keep with the rest of the city’s quality.

Although annexation comes with the benefit of gaining all of these services, it does not come without costs, particularly for water and wastewater. Fees newly annexed residents will pay to the city include a $55 tap connection inspection, a $180 water drop-in fee and a $75 plumbing fee. In addition, the areas will pay normal city taxes.

Municipal utility districts

Before annexation, unannexed areas still need utility service even if the city is not prepared to provide them, leading to the creation of Municipal Utility Districts.

The Anderson Mill MUD, one of two Northwest Austin MUDS set to be annexed in the next three years, compares itself to a school district in its role as a government entity with limited power. A MUD’s primary purpose is to provide water and wastewater services, and to that end they are able to levy taxes, charge for services and issue bonds.

Besides its water system, the Anderson Mill MUD has also used its powers to increase quality of life in the district. The MUD has entered into an agreement with the Williamson County Sheriff’s Department allowing them to use former MUD office buildings as a substation so that the officers can have a base in north Austin rather than traveling from their headquarters in Georgetown.

“One of the nice things about living in this MUD is that homeowners have access to everyone from the president of the board on down,” Anderson Mill MUD General Manager Michael Bamer said. “You don’t have to go to a city manager, you can just go directly to the president of your board and they are available 24/7. In fact, we have our board members’ phone numbers in our newsletter, and meetings are right here in our district.”

Before agreeing to annexation, the MUD formed a strategic partnership with the city to segway into annexation and set specific terms.

“Strategic partnership agreement is something a MUD and city enter into where they agree to certain terms, when it will be annexed and steps the city will go through before they do that. There is a transition for those customers to go from MUD to city utility users,” Collier said.

A feature that the MUD prides itself on is its parks and pool. In order to be able to maintain these facilities after annexation, the Anderson Mill MUD specified in their strategic partnership that they will join Austin as a Special Utility District, retaining its ability to levy small taxes.

“When it’s annexed, the MUD will be dissolved,” Collier said, “but it is still like a mini-MUD. They will still have a board of directors, but won’t provide utility service.”

Future of annexation

Besides areas that have requested annexation, the city identifies areas applicable for annexation by looking at its Extra Territorial Jurisdiction. The future of Austin’s northern annexation lies in the ETJ.

The ETJ is the land in the five miles outside the city boundaries that is not part of another city, or part of another city’s ETJ. Those people in the ETJ are subject to city approval on subdivisions and the city has some control over special districts forming, like MUDs. The city has no taxation power and no obligation to provide services to the area.

When it comes to annexation the city has two options: limited purpose and full purpose.

“Limited-purpose annexation allows the city to have planning regulation, but doesn’t extend taxing jurisdiction so it gives the city a little more control over the development that will occur,” Collier said. “Like in Robinson Ranch, for example: The way we set it up, the whole property comes into the limited-purpose control. As development occurs and properties are moved from agricultural exemption and are developing, we will bring them into full purpose. It’s a baby step into full purpose.”

Full-purpose annexation gives the annexed area full rights as part of the city, including municipal services and voting privileges. It also allows the city to take full advantage of the area as part of the city through taxation.

Limited-purpose annexation applies all city ordinances and regulations to the area, such as zoning, but does not require the city to provide services to the area or allow them to tax residents in the area. One part of the agreement is that an area that is limited-purpose annexed may become full-purpose annexed after three years. Robinson Ranch was annexed in June 2004.

The city has nearly exhausted its northern growth and is beginning to bump up against the city of Cedar Park, just on the other side of Toll 45 and RM 620. Collier says that as the northern area becomes tapped out for annexation, the city will likely look east for new growth.

Annexation dictionary

Full-Purpose Annexation - Requires the city to provide municipal services, and extends zoning and voting privileges. The city may also collect property and sales tax in annexed areas.

Limited-Purpose Annexation - A type of temporary annexation that keeps landowners from having to start paying property tax and keeps the city from having to start providing services. Limited purpose annexation may last for three years and allows the city some development control.

Extra Territorial Jurisdiction - Land five miles outside of the city that is not a part of another city or in the ETJ of another city. This is land the city may annex.

Municipal Utility District - A government entity that provides water services to an area. A MUD can levy the collection of property tax, charge for services and issue bonds for water services and parks.

Taxes before and after annexation

After annexation some neighborhoods’ or MUDs’ taxes may change. For example, Austin’s 2007 property tax was 41 cents per every $100 valuation. Anderson Mill MUD’s was 46 cents. Below is a comparison by Austin of how the Anderson Mill area’s taxes could change after annexation.

Other North Austin Municipal Utility Districts

1 - Canyon Creek Municipal Utility

Also known as the Northwest Austin Municipal Utility District #1, this MUD is managed by Real Manage, a firm that runs communities all over the nation. Recently this MUD has been in the news for challenging the Voting Rights Act after the MUD was fined for changing a voting location.

2 - Rattan Creek

Also known as North Austin Municipal Utility Disrict #1, this MUD is run by ECO Resources Inc., a company that operates and maintains utility systems, including 25 MUDs in Central Texas. This MUD also offers private tennis courts, playgrounds and athletic fields.

3 - Wells Branch

This MUD also uses ECO Resources for utility management. The MUD also offers parks, pools and a Community Center.

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