The fate of the River Place neighborhood—whether it will be annexed by the city of Austin or not annexed—hangs in the balance as Texas legislators meet in late July to discuss amending existing annexation laws.

The River Place Municipal Utility District is scheduled for full-purpose annexation Dec. 15 by the city of Austin. Some River Place residents oppose annexation with concerns that by becoming Austin residents, their tax bills will increase while the quality of their municipal services may decrease.

During the recently concluded regular legislative session, state Sen. Donna Campbell, R-New Braunfels, sponsored Senate Bill 715, also known as the Texas Annexation Reform Act, which would require voter approval before an unincorporated area is annexed by a city.

State Rep. Paul Workman, R-Austin, successfully worked with River Place residents to add an amendment to the bill to include their neighborhood within the bill’s protection.

The bill died on the Senate floor May 28 during a filibuster by state Sen. José Menéndez, D-San Antonio, and the regular session ended. However, Gov. Greg Abbott called for a special session to begin July 18.

Abbott said once the Texas Senate passes sunset legislation to keep certain state agencies alive, he will then add an additional 19 items that failed to pass during the regular session, including the annexation bill. Lt. Gov. Dan Patrick and House Speaker Joe Straus, R-San Antonio, guide the legislative process and will have the final say over which topics are discussed during the special session.

“We’re optimistic,” Workman said. “I think [SB 715] will get through [the Legislature] okay. I think the leadership is committed to it.”

If added to the special session, SB 715 would be assigned a new bill number.

River Place annexation history

The city of Austin began the process to annex the River Place MUD in December 2008.

A portion of the River Place neighborhood, north of Merrywing Circle, is already within city limits, said Scott Crosby, president of the River Place homeowners association and secretary of the River Place MUD. The annexation process only affects the area in the borders of the MUD, he said.

This area is approximately 1,040 acres of land in Austin’s extraterritorial jurisdiction, or ETJ, according to the 2009 strategic partnership agreement, or SPA, between Austin and the River Place MUD that established the terms of the annexation.

Austin’s ETJ is the unincorporated area within 5 miles of its city limits that can be annexed by Austin but its inhabitants do not pay city taxes, lack municipal services and cannot vote in most city elections, according to Austin City Planner Virginia Collier.

The SPA allowed River Place to delay full-purpose annexation until December, converting the development into a limited-purpose jurisdiction in the meantime. Although residents in this type of jurisdiction can vote in City Council and charter elections, they do not pay city taxes or receive full city services, Collier said.

As part of the scheduled transition, the city took over the River Place MUD’s water and wastewater services in October 2014.

If the annexation bill does not pass during special session, River Place will be fully annexed, and neighborhood residents would have the ability to vote in Austin elections, pay city taxes and receive all city services.

At the time of annexation, the River Place MUD would convert to a limited district, according to the SPA. The district will have the same responsibilities as the MUD, such as continued management of its parks and solid-waste disposal. The limited district would be funded by a tax placed specifically on River Place homeowners.

Limited district taxpayers will have the opportunity to vote in May on whether to continue as a limited district. If they choose not to keep the limited district, the city of Austin will become responsible for solid-waste management as well as park and trail maintenance.

Why annex River Place?

Austin’s full-purpose and limited-purpose city limits sometimes surround unincorporated land or other municipalities.

“As we’ve annexed, some of the areas just kind of get surrounded by newer development, and then we would go back and try and fill in those areas as we can,” Collier said. “Filling in areas that just haven’t risen to the top for annexation in the past might be something good” if the Legislature will be enacting new restrictions, she said.

Campbell called these gaps in city limits “bad city policy.”

“[Cities] go get the part they want, and they leave areas around it that they don’t want,” Campbell said. “They only reach out and get the areas that can provide a strong tax base for them.”

Collier said she disagrees.

“I wouldn’t say that annexation as a tool is really strategically seeking out tax revenues,” she said. “It’s the fact that areas in the city limits pay city taxes and support those services that everyone relies on.”

Concerns for quality of services

Collier said annexation seeks to resolve tax inequity that occurs when residents of unincorporated areas in Austin’s ETJ use Austin’s services and infrastructure but do not pay city taxes.

“You have property owners and taxpayers within the boundaries of the city paying for services and things that are of mutual interest to all the residents in the region,” Collier said. “And then you have, just on the other side of the city limit line, [people who] don’t contribute to that tax base.”

Paul Schumann, a member of the Lost Creek Civic Organization, said Austin gains tax revenue from annexed neighborhoods but does not seem to invest the income back into the neighborhood. His development, Lost Creek, was annexed by the city of Austin in December 2015.

“Being a part of the city of Austin and being annexed, you do not have the coverage of the services that you would expect [from Austin],” Schumann said.

According to state law, Austin must provide annexed areas with the same level of services and infrastructure as it provides to other areas of the city with similar topography, population and land use.

“The state law requires that the city approve a service plan as part of the annexation ordinance,” Collier said.

Austin has the ability to offer different urban services that are not available in unincorporated areas, she said.

Legislature to decide on policy

Campbell called involuntary annexation “taxation without representation.” When an area is annexed, she said property is altered and placed under zoning ordinances created by officials the residents did not vote for.

By entering into its SPA with the city of Austin, River Place has been able to vote for city officials since 2009 without paying city taxes.

If Campbell’s bill passes with Workman’s amendment during the special session, River Place will be able to vote on annexation. Workman said he will be advocating that his amendment stays on the bill during the special session.

If River Place has the opportunity and votes against annexation, the MUD may continue to provide services, and the community would need to find out how to regain control of its water and wastewater treatment system from the city, Crosby said.

“Beyond that there are many questions that will need to be answered,” Crosby said. “We will need to educate the voters on what it will mean and cost to be either annexed or not annexed.”

Emily Donaldson contributed to this story.