ASK THE MAYOR
Annexation choice financially clear
MAYOR PHILLIP SPENRATH

Annexation has been a very difficult, and yet much needed economic development project for our city.

Annexation is one of the strategic economic components addressed in El Campo's 2020 Comprehensive Plan that was adopted seven years ago. In June of 2007, annexation and the many facets of this economic tool were brought to council as an agenda item to be explored.

Council and staff reviewed the importance and rationales for annexation. First, it is pertinent to promote El Campo's economic growth and development through the protection of our boundaries. By designating land use, through proper zoning, El Campo will be able to entice new business to invest in our community knowing that needed utilities and services are readily available.

Second, annexation is a widely successful practice among many of our progressive neighboring cities for expanding their city's tax base and generating much needed local revenue. As gasoline and other operating expenses continue to climb, your City Council and staff must explore and research potential sources for obtaining new revenue in order to continue providing and improving our current utilities and services.

At present, the estimated

At present, the estimated cost for annexing the five approved areas is $4.5 million. This is the estimated financial breakdown by area: (1) Sandy Corner and Hwy. 71 North, $3.7 million; (3) tract of land opposite the new middle school $0.00; (4) Wilbeck and Peters Estate located to the east and south of middle school, $0.00 because these tracts are entered into the non-development agriculture agreements; (5) Wharton County Electric Co-op tract and agriculture-related areas, $184,500; and (6) part of the West Loop, South Meadow Lane and U.S. 59 South, $636,000.

From the existing Utility General Fund Balance, your City Council and staff have designated $865,000 of surplus savings to be expended toward offsetting our total annexation costs. Thus, the adjusted total estimated cost of annexation for all of the recently passed areas will be $3,635,000. This $3.6 million projection is significantly lower than many of the recent predictions of $7-9 million.

Further, the chief engineer for El Campo's annexation project, Craig Kankel, has notified me that the aforementioned estimates will remain firm for only six months from the time they were presented in November. Therefore, it is imperative that your city staff promptly enter into all the applicable construction agreements with due diligence so that the city of El Campo will be guaranteed that the material and labor costs are locked in and not subject to future rate increases.

During our annexation workshops, your City Council initially calculated that annexation could increase our existing city tax base by $42.5 million dollars. Using the 2006 Wharton County Appraisal District tax figures, the original five areas would have generated a tax base of approximately $26

a tax base of approximately $26 million real property and $16.5 million personal property.

In addition, the city could potentially recognize several hundred thousand dollars in sales tax revenues and utility fees.

Based on these figures, it becomes clear that our current annexation project could not only control and protect our boundaries as desired, but it could also generate much needed new revenue sources to help offset the uncontrollable rising costs of operation.

After informative workshops and two public hearings, your City Council has since 1) eliminated Sunset Terrace, due to limited financial investment returns; 2) removed over 70 residences located on the west side of Sandy Corner due to legal constraints that prevent a municipality from annexing an adjoining area with over 99 residents; and 3) removed all of Area 4 (Middle School) and most of Area 5 (U.S. 59 toward Wharton) due to state mandated ag non-development agreements.

Consequently, our current annexation project should increase our existing tax base by approximately $22-25 million - $12.5 million real property and over $10 million personal property.

In addition to the added tax revenue, the city of El Campo should experience increased revenues through additional local sales tax dollars.

Annexation has been a very difficult, and yet much needed, economic development project for our city. For me, it comes down to a business decision as to what is in the best interests of the city and citizens of El Campo. There are no personal issues or agendas.

One of my primary goals has and will continue to be providing every citizen with credible information along with open access to your city government. El Campo is entering a very exciting period of economic growth and development. As citizens, we must unite as a community in order to protect the future growth and integrity of our great city.

- Comments may be addressed to askthemayor@sbcglobal. net.