For at least nine consecutive years, the city of Conroe has annexed parcels of land to expand the city limits, its property and sales tax bases, and position itself in areas of future growth.
The future of Conroe annexation has been a hot-button issue during the city’s mayoral and city council election in May. However, with the mayoral and Place 1 races headed to runoffs on June 25, discussions about annexations have been placed on hold.
Since 2007, the city has annexed communities, such as April Sound, Crighton Ridge, Grand Central Park, Piney Shores and White Oak Manor as well as the Girl Scouts camp in north Conroe.
“There [are]many factors that drive annexation,” said Nancy Mikeska, assistant director of community development for the city of Conroe. “Economic benefit and growth are always at the top of the list. We also look at future growth, things that we know that are coming but the public might not know about.”
While annexations benefit the city, some residents in communities like April Sound oppose forced annexations conducted by the city in recent years. The city faces an ongoing lawsuit filed in April 2015 by 95 annexed residents hoping to nullify its 2013 and 2014 annexations.
Conroe is classified as a home rule city, meaning it is allowed to conduct involuntary annexations within the bounds of Texas law. According to city documents, the city of Conroe has conducted annual annexations since at least 2007 and added about 18.5 square miles to its city limits from its extraterritorial jurisdiction—land that can be annexed into city limits.
In addition to the tax revenue brought in by the annexed land, Mikeska said annexations benefit the city by expanding the tax base to spread the tax burden among more residents, rather than raising taxes on existing residents. The city has maintained a property tax rate of 42 cents per $100 of valuation for nine consecutive years.
While factors other than annexation also contribute to revenue increases, annual property tax revenue has increased by $9.4 million and annual sales tax revenue has increased by $14.4 million since 2007.
“Most importantly, in my opinion, when people are living on the fringes of the city, they are using our city services every day,” Mikeska said. “They drive on our roads and they use our drainage, [for example]. If the city wasn’t here, none of those would be here.”
City Administrator Paul Virgadamo said when an area is annexed, the city must provide police and fire protection and municipal services, such as water, sewer and garbage collection services as well as road repairs.
He said the city has conducted road repair projects in the Tejas Creek and Oak Tree neighborhoods and installed water and sewer lines in Thousand Trails and fire hydrants in Creighton Woods and Southwind Ridge, all communities that have been annexed by the city in recent years. Additionally, the city took over operations of Fire Station No. 6 and added police staff to serve the April Sound area.
Virgadamo said the Conroe Fire Department even has a master plan for future fire station construction.
The city has standing agreements with the Woodforest, Jacobs Reserve, Fosters Ridge and Harper’s Preserve municipal utility districts for future annexations, Mikeska said. Once complete, the communities will feature about 5,500 homes, 2,000 homes, 1,500 homes and 1,700 homes, respectively, according to community websites and a study by demographics firm Population and Survey Analysts.
“We do those [agreements]because the MUDs don’t want us to annex them before they get their project on the ground because they are going to seek bonds and debt. They want to be able to pay off that debt before it is annexed and the MUD district goes away,” Mikeska said.
Conroe annexations that went into effect in January included the Reserve at East Forest, Montgomery County Fairgrounds, a portion of I-45 and Forest Creek. Because of ongoing elections, Mikeska said annexations for 2017 could be announced as late as September.
“We certainly have been discussing annexations internally,” Mikeska said. “We have not moved forward with those because we will wait for direction from our [new]council. Although the mayor doesn’t vote, [annexations are]still a part of the vision and direction.”
April Sound history
The city annexed April Sound on Jan. 1, 2015, through a strategic partnership agreement with Montgomery County MUD Nos. 3 and 4—which provide water and sewer services to the April Sound area, according to city documents.
The City Council first voted to annex the community in December 2011 and followed a three-year process required by law to annex an area with more than 100 rooftops, Mikeska said.
MUD No. 3 President Doris Hickman said the districts wanted to fight the annexations at first but ultimately opted to pursue the agreement with Conroe to avoid being dissolved after the annexation.
By keeping the MUDs in place, the community was able to retain its utility provider and garbage collection service. The MUDs also operate a groundwater well outside of the city’s groundwater reduction plan with the San Jacinto River Authority, which Hickman said will save the community millions
of dollars over the next few years.
To avoid the dissolution of the MUDs, April Sound residents pay the city of Conroe an annual property tax as well as a reduced tax from their corresponding MUDs. Although April Sound residents pay more in property taxes than Conroe residents who do not pay a MUD tax, Hickman said the community’s tax rates have been reduced overall.
Hickman said the tax is necessary for the MUDs to fund operations of local utilities, and the tax decrease was possible because the city absorbed outstanding debt owed by the MUDs.
April Sound lawsuit
Some April Sound residents disagree with the annexation and are challenging its legality through a lawsuit filed against the city in April 2015, said Keith Armstrong, a lawsuit plaintiff and April Sound resident.
“Conroe thinks they have done it right because they have done it wrong for 35 years,” he said. “We would like to know that we stopped them in 2014.”
Plaintiffs claim the city did not follow the three-year grace period required by law because the terms of the annexation were altered along the way. The plaintiffs also contend the annexation was not legal because it is not contiguous to city limits and that a proper description of the territory’s boundaries was not provided, said Stephen Simonsen, a lawyer representing the April Sound plaintiffs.
The plaintiffs seek to reverse the city’s 2013 and 2014 annexations and recuperate taxes collected, Armstrong said.
However, John Hightower, a lawyer with Olson & Olson LLP, the Houston firm that represents Conroe, said the city believes it followed legal procedures during the annexation. The city has spent $40,763 defending the annexation to date.
In March, 410th Judicial Court Judge Michael Mayes dismissed a substantial number of the plaintiff’s claims, Hightower said. Hightower said the original trial date passed in April, and a new date has not been established by the court.
“It was something like 150 different claims [that were dismissed],” Hightower said. “The effect of the courts order was to whittle the claims down to a smaller number. The city’s plan is to show that it is entitled to win on the remaining claims.”