Annexation won't up water bills
By SHANNON CRABTREE scrabtree@leader-news.com

GROWING INFRASTRUCTURE: As city limit signs moved north last year, plans for extending water and sewer prompted price fears. Now city officials say annexation will pay for itself. L-N File Photo

Recent annexations won't cost the city as much as initially feared, El Campo City Council learned during their last session.

Instead, taxes and fees from new residents and businesses may cover virtually the entire cost of extending water and sewer lines.

"This should be a self-sufficient project," City Manager John Steelman said.

The most recent city projections indicate it will cost $3.7 million to extend water and sewer lines to annexed areas including the Sandy Corner neighborhood, on East Jackson to the Wharton County Electric Cooperative and along U.S. 59 south of South Meadow Lane.

On a 20 year bond, the city estimates $267,386 will be needed to make the annual payment.

Tax revenue from annexed areas should draw $142,523 yearly while the industrial agreement with industries along D-A-M Road is expected to generate an additional $16,556.

Businesses along D-A-M Road were exempted from the Dec. 11 annexations when the city reviewed the cost of extending service along the private roadway.

In lieu of the annexation, the industrial agreement ensures the city a revenue equal to property taxes in the area while keeping those industries free from the more stringent codes and oversight of the municipality.

Other revenues from annexed areas includes an estimated $48,307 in sales tax collections, fines and permits each year and the remaining $60,000 needed should come from utility fees.

That revenue is based on a conservative $50 per month bill for each of the 100 new customers over the course of a year.

"What this means is that the debt service will be served by the residents or businesses we are serving," Steelman said.

Earlier projections had indicated an overall increase might be needed in city water rates.

"So the water bill won't be going up?" Councilwoman Gloria Harris asked.

"Not for this," Steelman said.

Mayor Phillip Spenrath questioned what effect, if any, pending litigation would have on annexation costs.

"Demand drives the cost of infrastructure," Steelman said, adding costs have actually decreased slightly in recent months.