Although a specific timeline has not been set, the populations in Sugar Land and Missouri City will surge in the next 10 years or so as a result of the annexation of local industrial centers, retail corridors and master-planned communities.
Annexation can be used as a growth tool for municipalities and typically brings a larger tax base to a city's budget. In return, these cities are required to provide utilities, such as water and sewer services, to the annexed area.
The process begins with the respective city council authorizing an annexation plan, said Gary Smith, director of development services with Missouri City. Following council approval, which describes how city services will be delivered, public meetings are held to help the city gather feedback from residents.
"The benefits to annexation is that the [community] will then receive full city services," Smith said. "Through our zoning ordinance, the newly annexed area will receive the benefits and protections in the development. The nearby uses will be consistent with our zoning regulations."
Areas awaiting annexation are outside of the city's utility service area and typically are located in the city's extraterritorial jurisdiction. The ETJ is the unincorporated area adjacent to the city limits. Municipal utility districts that serve these areas have helped the development of several master-planned communities throughout the area, such as Greatwood and Sienna Plantation, by fronting infrastructure costs and providing basic city services to residents. MUDs can incur bond debt, which is paid off over time through resident's property taxes.
When an area is annexed, the out-of-city service charge is eliminated and taxpayers stand to save money, said Jennifer Brown, director of finance with the city of Sugar Land.
"City codes and ordinances apply in the annexed areas," she said. "[The city] tax bill is typically lower than MUDs tax bills, and fire protection becomes part of the service covered by the tax bill versus paying a fee for the service."
MUDs are formed at the inception of a development to provide the necessary infrastructure to accommodate growth. As residents' tax dollars continue to pay off the debts associated with local utility districts, the cities make plans to begin the annexation process.
"During annexation, a municipality is not allowed to annex a portion of a MUD," Smith said. "The city must annex all of the MUD and assume its indebtedness."
Since the debt service of a MUD can sometimes be greater than the tax revenues from the annexed properties, cities typically prefer not to annex a MUD and assume its debt unless the numbers at least break even.
"This issue may be significant in determining when [Missouri City] will proceed with annexing area that is developed within its ETJ," Smith said.
