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Council declines to annex Entrada tract

Friday, September 8, 2017 by Jo Clifton

With the backing of Council Member Jimmy Flannigan, Council Member Ora Houston at last Thursday’s City Council meeting asserted her intention to oppose annexation for approximately 246 acres of land in northeastern Travis County known as Entrada. The property, owned by Lennar Homes, is contiguous with Houston’s District 1.

Council then proceeded to approve setting annexation public hearings for three other tracts of land. Mayor Steve Adler pointed out that by not setting the public hearing on Entrada, Council was effectively deciding not to annex the area.

Greg Guernsey, director of the Planning and Zoning Department, confirmed what the mayor said and noted that any new annexations will be done under new rules set by the state legislature this summer.

As she briefed Council a little bit later, Brie Franco, the city’s government relations officer, said the new annexation legislation, which the city opposed, would take effect in December.

“And that will now fundamentally change how annexation is done in Texas. It used to be that Texas gave cities broad authority for annexation because the property tax is the base for cities and counties to use for revenue. Now the areas being annexed will have to be approved by the residents and property owners in those areas if there’s more than 200 people living in the area. If there’s less than 200, we will have to get approval through a petition. So that is a fundamental change to how cities can manage growth and manage their property tax base,” Franco said.

Houston explained that the Entrada property owners are working with Travis County to set up a public improvement district for the property. She said she had “a lot of issues,” with the annexation, including the fact that the Capital Metropolitan Transportation Authority is not willing to provide transit service there. “I’m against it, period, but I’m willing to have the other annexations go forward.”

Flannigan then made a motion to approve having public hearings for the other three parcels. Those include HOLT CAT Subdivision in southern Travis County, about 27 acres along I-35 contiguous to District 5; the Mooreland Addition, approximately 34 acres in southwestern Travis County east of Manchaca Road, also contiguous to District 5; and River Place Outparcels, approximately 212 acres in northwestern Travis County adjacent to the boundary of the River Place Municipal Utility District, contiguous to District 6.

Michele Rogerson Lynch of Metcalfe Wolff Stuart & Williams, who represents Lennar, confirmed that Lennar wants to develop the property under a county PID. She said her clients are ready to move forward but they have to wait for the Travis County Commissioners Court to adopt a new PID policy, which she hoped would happen this month. After Lennar reaches an agreement with the county, the city has the right to object, but Lynch said she has never heard of that happening.

Adler told the Austin Monitor on Wednesday, “I think in the last several annexations that were before this Council, it appeared that this Council was not inclined to annex areas that had residents that expressed a desire not to be annexed. From a policy standpoint, I have concerns about that because people that live just outside of the city are able to take advantage of all the amenities and things that come with the city. We should split the cost of that among all of us, not just have people inside the city pay for amenities that are available to everybody.

“But in any event the legislature acted to remove from cities the ability just to annex. So in some respects, Entrada is the last one to come up,” before the law changes “that has residents that are not inclined to get annexed. I don’t think there were the votes on the dais to pass it, but that’s the world we now live in … and all cities, Austin included, are going to have to make that part of their planning.”

Council had voted to indefinitely postpone annexation of Entrada in January, with Mayor Pro Tem Kathie Tovo the only no vote.

On Wednesday, Tovo said she was disappointed. “I think our staff recommended it for the right reasons, it met our criteria and I believe we should have considered it for annexation,” she said.

As the Monitor reported when the annexation was indefinitely postponed in January, staff projections show that Austin would lose more than $23,000 in ad valorem taxes by failing to annex this year. If annexation is deferred to 2053 to coincide with the retirement of the proposed PID bonds, “‘(T)his equates to a loss of $35.7 million ad valorem city taxes (based on the developer’s build-out assumptions and the current city tax rate),’ according to a memo from city staff.”

Guernsey said he expects to use the new annexation process at some point. “We still will have property owners who come to the city of Austin and ask for annexation because they want certain services, water or whatever. We’ll still have developments that want to be part of the city of Austin. We won’t have as many is my guess. And those areas that are fully developed or have populations – they may push back. It may shift more of the burden (for services) onto the county.”

He added, “Certainly those things that we provide like zoning codes will be lost,” because the county does not have the authority to enact zoning regulations.

Hearings for the other three properties will be on Oct. 12 and Oct. 19 at City Hall.

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