Houston's Long Shadow

Senator Gonzalo Barrientos (D-Austin) just hates to say "I told you so." But he couldn't help but admonish his fellow senators last week for not supporting Austin during the last two sessions when the capital city was under attack over its annexation and regulatory powers. He then cautioned his colleagues to protect Houston's rights, under attack this session: "Be careful how you vote. You could lose out and wait for action on your city." In other words, your city could be the next target for bashing. Certainly Houston has figured that out. A bill currently on the floor would basically force Houston to dis-annex its suburban communities of Kingwood, an area with 54,000 primarily middle-income residents the city annexed just last December.

Sponsored by Senator Michael Galloway, a Republican from The Woodlands north of Houston, Senate Bill 313 would require Houston to grant Kingwood residents a public vote on whether they want to be part of the city. Since most of those residents resisted the annexation in the first place and would likely vote no, the bill would essentially strip Houston of its state-given powers to expand its borders without the consent of the suburban residents it intends to annex. Despite objections from Senator Mario Gallegos (D-Houston), the bill passed on third and final reading this week, and will be presented to the governor for approval.

It all may have started with Austin, but the battle over cities' rights has grown, as Barrientos predicted, and is taking its place -- along with property taxes, electric industry deregulation, and water supply regulation -- as one of the hottest topics of this legislative session. Certainly, most city leaders from Houston, as well as from Austin, consider a city's right to annex its lifeblood. "What is really at stake is the economic health of our city over time," says Austin Councilmember Beverly Griffith, who recently opposed a wastewater service contract with nearby Davenport Ranch which was to be given before full annexation of the area. Griffith says she's taking the long view -- one shared by many urban economic experts -- that without the ability or choice to annex, a city experiencing suburban sprawl and a subsequent loss of middle- and upper-income residents will slowly die, taking the suburban communities with it.

Sen. Galloway listened to fellow Senator Mario Gallegos' (D-Houston) impassioned and angry plea that senators recognize Houston's need to be compensated for the investments it makes on behalf of its suburban commuters. But Galloway said the issue at hand is that "Houston violated the spirit of the state's annexation laws" by annexing land connected to its borders only near the Houston International Airport, which itself was an annexed piece of land. What Galloway and other suburban legislators are arguing is that cities have to be reined in from a land grab for high-dollar property.

Many suburbanites, after all, are former city dwellers who moved to get away from big city problems, and now that they face annexation, they are getting organized. A coalition of Kingwood municipal utility districts (MUDs), along with groups like the Central Texas Area Utility Districts, are flourishing and have proven their influence -- particularly this session. A flurry of Houston-bashing annexation bills -- nearly 80, in fact -- were filed in early March and are being considered by the House and Senate this session. The majority of them seek to reduce cities' powers over the communities within their extraterritorial jurisdiction (ETJ), the five-mile area around a municipality which is subject to some regulation and eventual annexation. Most of Austin's city leaders are just happy that those 80 bills, which were written in response to the Kingwood situation, mean that Austin is slightly off the dart board. They even attribute the change on the hill to what they perceive as a new-found respect among legislators for Austin's ability to get along with its surrounding communities -- as with the negotiated annexation agreements with Anderson Mill and Davenport Ranch that are currently in progress.

Austin's Governmental Liaison John Hrncir acknowledges that the biannual whipping Austin bore during the 1993 and 1995 sessions appears to be in abatement this time around. "The forces that we generally have to contend with are those in the suburbs who want something," he explains. For instance, HB 2334, sponsored by freshman Rep. Terry Keel (R-Austin) this session, prevents Austin from annexing a MUD that has a wholesale wastewater service agreement with a municipality if the MUD is not 80% developed. The bill was written for the benefit of Travis MUD #1, and since that area is not expected ever to be developed to 80%, it essentially prevents Austin from future annexation. Such bills are the exception this session, but were the rule last time. Austin has 23 MUDs ringing the city -- it is a designation granted by state law (and supported in the mid-Eighties by Barrientos), that allows them to remain free of Austin's regulatory powers even though they lie within Austin's ETJ. When Austin attempted to enforce city water quality regulations on properties in its ETJ, or attempted to annex MUDs, the city was met with fierce resistance from developers and MUDs, who ran to the legislature for help. "We were often in the position of opposing bills," says Hrncir, a stance that often leaves legislators with the impression that Austin is simply a naysayer. "But the anger at the Legislature towards Austin is much lower now. One of the reasons you can tell is that legislation in direct antithesis of the city's goals and tied to a single personality -- a Jim Bob Moffett bill, a Gary Bradley bill -- has not emerged. Or they're getting better at hiding it."

Last session was a rout against Austin, particularly with two bills to benefit Moffett's FM Properties and Bradley's Circle C Ranch. The bills exempted the two developers' environmentally sensitive properties in Austin's southwest ETJ from city regulations. Both were signed into law, along with another to grant Cedar Park a portion of Austin's ETJ, and a compromise bill sponsored by Williamson County's Republican Rep. Mike Krusee and negotiated by Barrientos, to force Austin into a two-year moratorium on annexing certain MUDs unless the city forms a strategic partnership with the targeted community.

The pattern might have continued this year, but Austin has changed the rules by living within them. As Councilmember Daryl Slusher points out, the city is attempting to form those strategic partnerships with the communities of Anderson Mill, Lakeway, the Wells Branch MUD, and Creedmore. The city also has worked out agreements with Cedar Park to transfer a smaller portion of Austin's ETJ to the northern community than was called for in the bill, and has built a strong relationship with Round Rock and communities in Hays County. "We're showing that we can work with our neighbors -- that's the best legislative strategy," says Slusher. The city has fewer enemies, which means fewer of our neighbors are rushing to the Legislature.

Plus, the city has fought several court cases over Austin-bashing laws -- and won. The Texas Supreme Court ruled last year that the Maple Run legislation (sponsored by Barrientos to force the city to annex the debt-beleaguered MUD) was unconstitutional, signifying that any legislation so specifically targeted at one MUD and one city would not be tolerated. (Although state law prevents the Legislature from passing laws affecting single communities, legislators get around that by using "bracketing" language such as population limits or certain city regulations, that could only apply to one or two communities.) The city has also gone on the offensive by filing a lawsuit fighting the law that created a sovereign Circle C water district, and is appealing a Cedar Park lawsuit over the ETJ land. Two other significant decisions last year also precluded much of the anticipated Austin-bashing by anti-S.O.S. interests: FM Properties "won" their lawsuit against the city over regulations in their Lantana subdivision but were only awarded $113,000 for their trouble, and the city won the appeal of the Hays County court decision outlawing the S.O.S. ordinance.

It all seems to be working, but if anyone thinks that the abatement of legislative hate against Austin is due to a sudden love affair with this city and how it's changed, they're sorely mistaken, says Hrncir. Legislators are merely distracted by Houston-bashing, their new favorite blood sport. And Austin needs to remain vigilant, because the fallout from those battles has the potential to severely harm Austin and its sister cities all over the state. "We are more vulnerable than ever before," stresses Hrncir.

How? Scatter-shot law-writing. Some of Houston's suburban legislators are writing two versions of their bills -- one directed at Houston and one to apply to all Texas cities. "If you bracket one city, you don't get as much opposition, but you also don't get as much support," explains Hrncir. Rep. Paul John Hilbert (R-Houston), for instance, filed HB 265 and 266, which do several things: 1) call for an election of the residents in an area to be annexed; 2) prevent cities from annexing if the county commissioners court finds that the municipality wants that portion of their ETJ because it has commercial land with high tax value; and 3) prevent annexation if the commissioners find that the area "is part of a larger area in which a sense of community exists among a significant number of the residents and landowners." Hilbert bracketed both those bills to apply to cities with 1.5 million in population so that it affects Houston. But Hilbert then filed HB 1953 with identical language, bracketed for cities with 225,000 and over in population, which affects Austin. Hilbert "hopes to pick up support from suburban legislators for all his bills," notes Hrncir.

And while Hilbert's bills are still making their way through the conservative House Land & Resource Management committee, two others by Rep. Joe Crabb (R-Kingwood) and Rep. Krusee made it out last week and will be considered on the House floor as soon as their sponsors gather enough votes for passage. Crabb's HB 751, the companion bill for Galloway's SB 313, calls for the deannexation of Kingwood by Kingwood election, and Krusee's HB 1028 -- which would affect Austin -- would extend the current moratorium on annexation of certain MUDs for an additional two years.

Some bills go even farther. Hilbert's HB 1954, still in committee, makes the weighty proposal to revamp the annexation process altogether. It calls for a two-year moratorium on all annexation while a state commission reviews annexation procedures. The commission, as written by Hilbert, would be comprised of six members appointed by the lieutenant governor and the House speaker, and three members appointed by the county judges from Bexar, Harris, and Travis Counties.

All of those bills could have popular support among suburban legislators who think cities have too much power over communities in their ETJ.

Houston will have one powerful ally in the Texas Municipal League (TML), comprised of leaders from all of Texas' big cities. The group wimped out last session and did not oppose the bills targeted at Austin, stating that it was their policy not to fight bills directed at one city. But through the persuasiveness of board member Mayor Bruce Todd and of course, Houston Mayor Bob Lanier, TML changed its policy, at least when it comes to annexation bills, and is now actively defending Houston this session. But TML's past influence may not hold water with the majority of rural and suburban legislators this session. As more and more of the annexation bills wind their way to the House and Senate floor over the next two to three weeks, cities, including Austin, may find themselves taking a collective bashing.