After a decade-long respite in growth through annexation, San Antonio appears poised to annex two prospering commercial corridors outside Loop 1604, one along Interstate-10 West, the other along U.S. 281 North. At the same time, it looks like the City will take a pass on annexing an economically and socially depressed pocket inside Loop 1604 along I-10 East that is landlocked between four suburban municipalities.
For more than two hours Wednesday, Mayor Ivy Taylor and City Council listened to an extensive briefing from Deputy City Manager Peter Zanoni and then quizzed Zanoni and other city officials on staff’s proposed two-phase, two-year annexation proposal. All 10 Council members had multiple questions and observations, a measure of the ambivalence several officeholders feel about their decision. Still, the staff recommendation appears headed for easy passage with only Councilwoman Shirley Gonzalez (D5) and Councilman Ron Nirenberg (D8) likely to oppose it.
“As much as I’d like to point out this is black and white, as we’ve seen here today, the truth is somewhere in between,” Mayor Taylor said at the conclusion of the briefing. She lauded the staff, consultants, and seven community members of the Annexation Technical Work Group for leading Council through a “thoughtful, fact-based discussion and moving us forward with a more nuanced and balanced approach.”
There is nothing simple about annexation decisions. Part of the debate centers on costs and benefits, and part of the debate is political. Annexation, at least in this instance, appears to be a fiscal decision with little consideration of government’s obligation to needier residents living outside the city limits factored into the equation. There is little pretense that the 40,000 people living in the 12 square miles along I-35, a poverty-stricken pocket bounded by Kirby, Schertz, Windcrest and Converse, will be treated the same as people in the far more prosperous reaches of the county outside Loop 1604.
One snapshot statistic of the three areas under consideration tells the story: Homes along the I-10 West corridor have a median value of $287,610. Homes along the U.S. 281 North corridor have a median value of $227,365. Homes along the I-10 East corridor have a median value of $85,920.
In a City starved for tax revenues to fund infrastructure construction and maintenance, where streets and sidewalks alone account for more than a $2 billion-plus shortfall, annexation is a dollar and cents calculation. If the city’s anticipated tax collections over a 20-year time period in a given area appear certain to exceed the City’s obligations to invest in everything from streets to fire stations to libraries, then the targeted area is ripe for annexation. If the area is blighted and economically depressed and the costs of delivering services significantly outweighs anticipated tax collections, then the area is probably going to be left unannexed.
City staff projections offer a stark contrast in choices. Annexation comes at a high cost. All three areas, for example, would require newly-constructed fire stations at a cost of a $8-9 million each to meet City-mandated response times to reported fire and EMS 911 calls. The I-10 West corridor would require $69 million in streets, sidewalks and drainage work, and another $5 million for animal care services, parks and libraries. The U.S. 281 North corridor would require $29 million for streets, sidewalks and drainage, and $4 million for animal care services, parks and libraries. The I-10 East corridor would require $99 million for streets, sidewalks and drainage, and $21 million for animal care services, parks and libraries.
The comparative tax collection projections are even more dramatic. Annexing only the two recommended corridors will produce a revenue surplus of $95-100 million over 20 years, while annexing all three areas, Zanoni said, would yield at best $30-50 million. The I-10 East corridor, he said, would require $440 million in city services over a 20-year period while yielding only $300 million in tax revenues.
One other telling fact emerged in the briefings Wednesday. Fully 83% of the residents living in the City’s Extraterritorial Jurisdiction (ETJ) work in the city, and all residents in the ETJ benefit from city services in multiple ways, yet contribute only with their sales taxes, most of which flow to the state.
Projected expenditures and revenues hardly tell the whole story. Take the U.S. 281 North corridor. Staff proposes annexing only the commercial corridor while leaving 12 square miles and 25,000 residents unannexed until 2034 and thus not having to pay real estate taxes.
Some council members challenged staff and asked if they reason for the exemption was that the 15 Homeowners Associations in the area had hired a lobbyist to win them a long-term reprieve to match the exemptions granted their neighbors, Timberwood Park to the west and the JW Marriott San Antonio Hill Country Resort & Spa to the east. Also, residents along the corridor strongly oppose annexation. In the view of city planners, they enjoy all the city services available to them but do not want to contribute to the tax base to support those services.
“If you are asking for my opinion, I would say we go forward with full annexation of 281,” said Councilwoman Rebecca Viagran (D3).
One other irony: While the majority of residents living north and northwest of the city limits vehemently oppose annexation, those living along the I-10 East corridor much closer to the urban core strongly support annexation and the urban-level services that would come with it.
As matters stand, City Council is getting ready to annex areas in the so-called sprawl zone where residents oppose the action, even as the same council members seem inclined to vote against annexing the urban pocket where citizens want to be part of San Antonio.
“I’m trying to get my head around all of this, but I oppose annexation,” Gonzalez said Wednesday. Her opposition seems centered on the inability of the City to invest more robustly in long-neglected inner city districts and attacking “deferred maintenance.”
Nirenberg said after the meeting that City staff has not met his burden of proof to justify its annexation proposal.
“I’ve said before there is a burden of proof to be met, and I don’t feel comfortable that burden has been met,” Nirenberg said. “I am not comfortable that we are leaving out a community that, excepting the numbers, is prime annexation area. The residents there want us to annex them.
“We continue to subsidize sprawl,” Nirenberg said. “If you look at what we are talking about annexing, those communities are affluent and less heterogeneous. There is a moral obligation we are ignoring, but it appears it’s going to move forward.”
Councilman Rey Saldaña (D4), on the other hand, has been a consistent inner city voice favoring annexation now as the best way to capture new tax revenues and to protect the city against efforts by members of the Texas Legislature to wrest away annexation authority from municipalities. Jeff Coyle, the City’s director of governmental and public affairs, told the council that while such legislation failed in the 2015 session, it was expected to be reintroduced again in 2017.
Even so, Saldaña acknowledged the opposing point of view.
“There is a very good argument that I have heard that when you continue to annex further and further out, where people have little interest in downtown, that you make it harder and harder to invest in downtown and in areas like the Westside and my area and other underserved areas where these other people never go.”
He joined Viagran in questioning the 20-year non-annexation agreement recommended for the 25,000 residents living in the 8,600 homes along the U.S. 281 North corridor.
“Having hired a lobbyist is not a good enough reason,” Saldaña said.
Councilman Alan Warrick II asked if the staff’s recommended annexation plan would halt or slow down continued sprawl. Zanoni responded that may be beyond the city’s control, noting that the Northside Independent School District’s planned new campus construction is all outside the current city limits.
What was not asked was this: Would excluding the I-10 East corridor with its African-American population mean that the next redistricting initiative after the 2020 U.S. Census leads to the loss of the “black seat” on Council as the population continues to shift out of the inner city and farther north? Without adding population the current District 2 likely will become so predominantly Hispanic that African-Americans can no longer count the seat as guaranteed.
Zanoni noted that the SA Tomorrow initiative aims to keep 60% of the anticipated one million people expected to move here in the next 25 years inside Loop 410, a goal most developers privately dismiss as fantasy, saying San Antonio lacks the investment capital to incentivize such urban core development, affordable housing options, or to build the kind of multimodal transportation system that would be needed to serve such a dense urban population.
Councilman Joe Krier (D9) probably best represents the council votes supporting the staff recommendations. He criticized past City Councils and “the sainted Henry Cisneros” that he said were timid about annexation. Had San Antonio not annexed, he noted, the city’s corporate job base likely would be much smaller today.
“We need to visit this issue much more often than once every 10 years,” Krier said, noting that the original study of 30 instinct target areas for annexation would have added 200,000 people to San Antonio’s population and created mayhem.
Councilman Mike Gallagher (D10) was one of several on Council who expressed fears that failed attempts to limit annexation powers in the last session of the Texas Legislature will gain traction in the 2017 session.
“I think we are going to pay a very dear price if we don’t do this faster,” Gallagher said. “I really wish we could do this without a phase one and a phase two.”
Viagran was not only the one to question staff’s 20-year exemption for residents of the U.S. 281 neighborhoods. Councilman Roberto Treviño (D1), an architect, asked what guarantees the City has that the infrastructure in those neighborhoods will be maintained properly for the ext 25 years.
“Is there any guarantee of infrastructure maintenance over the next 25 years?” Treviño asked Zanoni.
“I don’t think so,” Zanoni said.
“I want to point that out,” Treviño said. “We need to pay attention to these kind of things. Today is not the same as tomorrow.”
Correction: An earlier version of this story mistakenly attributed a statement by Councilman Rey Saldaña to Councilwoman Rebecca Viagran. The statement was, “Having hired a lobbyist is not a good enough reason.”
Top image: Council members Cris Medina (D7) and Ron Nirenberg (D8) grab coffee bar moments before a city council meeting begins in April 2016. Photo by Scott Ball.
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