Despite new law, the residents of Shady Hollow MUD continue fight for right to vote on impending Austin annexation


As of December, Austin no longer has the same authority it once did in managing and directing the growth of its borders because of a new annexation law that shifts power to property owners outside the city.

Under the new law—effective Dec. 1—cities with larger populations, such as Austin, that wish to widen their jurisdiction must gain official consent from a majority of the desired properties’ landowners through petition, or in some cases, an election.

Previously Texas cities were able to annually absorb any land within their extraterritorial jurisdiction—land within a 5-mile buffer of its proper borders—as long as it did not belong to another municipality and did not exceed 10 percent of the city’s existing land area. All it took was a strategy to properly provide city services and a green light from a city’s city council.

For decades, cities leaned on the old annexation law to widen borders, increase tax base and manage and plan for growth. Since 1951, Austin has exponentially expanded its borders and suburban tax base through the execution of 1,489 annexations, according to city documents.

Although residents of the area support the new law, it does not change the fate for the Shady Hollow Municipal Utility District, located off Brodie Lane south of Slaughter Lane, which will become a part of Austin in 2020 without a vote by its residents due to a strategic partnership agreement between the city and the district.

Strategic partnership agreements are essentially deals initiated early on between the city and a developer to bring a development on the outskirts into Austin when the city is able to provide adequate services. Although these agreements are no longer possible under the new law, a last-second amendment to the state’s bill grandfathered in all existing agreements—such as the Shady Hollow MUD and the River Place MUD in west Austin.

Former Travis County Judge Bill Aleshire, a Shady Hollow resident, has been a vocal opponent of what he called Austin’s “predatory” annexation practices.

“Shady Hollow is the classic case example of how things can go wrong and how cities use predatory annexation power to do nothing good for the people they are annexing,” he said.

Aleshire and his neighbors worked tirelessly during the legislative session to lobby for the bill, yet he said they were disappointed by the last-second strategic partnership agreement clause.

“I don’t think we’ve given up,” Aleshire said. “The possibility of litigation is not over.”

Aleshire said residents of the Shady Hollow MUD have much to lose should the city succeed in annexation. He called the agreement between the city and MUD “unconscionable” and heavily one-sided as Shady Hollow MUD had little negotiating ability due to the power the old law gave to the city. Aleshire expects taxes to increase threefold, while services such as road and parks and recreation maintenance and police presence are set to decrease.

He said the city would also inherit a $4 million fire station—which Shady Hollow residents paid for—with no compensation to the residents.

“I don’t like abusive government power,” Aleshire said. “And this was an area where [Austin was] just abusing their power.”

Representation before taxation

Under the new annexation law, if Austin wants to annex an area populated by less than 200 residents, the city must get a majority of the area’s property owners to consent through an official petition.

However, if Austin wants to annex an area with 200 or more residents, a majority of residents must consent through an official election.

If the majority of registered voters do not own a majority of the land, the annexation must be approved by a majority of property owners through a petition.

Virginia Collier, principal planner for Austin, said previously the city’s planning team would seek out areas annually where an annexation would provide mutual benefits. Collier said typically these would be located where new development was occurring. In turn for providing city services, such as water/wastewater connection and public safety, Austin would expand its tax base and manage development in the area to match the city’s holistic vision.

“Instead of a process we’ve followed for years—bringing forward areas annually and recommendations [for growth], we’re going to look more toward property owners that are coming in and asking for annexations,” Collier said. “It will be [property-] owner driven.”

Life on the outskirts

Austin annexed the Anderson Mill Limited District under the coordination of a strategic partnership agreement in 2008. The residents had no say in the process, but they were able to negotiate the creation of a limited district—a quasi-governmental entity that collects extra taxes from property owners to fund certain services.

Mark Maxwell, the district’s general manager, said the district was created because residents had the same concerns over decreased service as the Shady Hollow MUD. District residents pay an extra 11 cents on their tax rate to maintain the parks and pools, collect trash, and enforce deed restrictions.

“I think we would have voted against being annexed,” Maxwell said.

The residents of Shady Hollow MUD have roughly three years until they become a part of Austin. Although Aleshire says they have exhausted most options, he and his neighbors will continue to fight it. He said a lot could happen between now and then.

“There is another legislative session in 2019,” Aleshire said. “I am never going to give up on the possibility.”

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  1. Well, and they say communism is dead! Obviously, it is alive & well in the “Peoples Republic of Austin”! This is the most horrific example of political despotism I have ever heard of in this country. What a tragic abuse of power. For what one woman’s opinion & action is worth, I am THROUGH shopping in the City of Austin! It isn’t much, but it is one thing I CAN do! Good Luck to Mr. Aleshire in his efforts. I remember his tenure in county government – we need more like him.

Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following two years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun and USA Today. He is a graduate of the University of Maryland's Philip Merrill College of Journalism.
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