McKinney | May 2023

Reform recap Annexation reform has seen state-level action in recent years, limiting city officials’ goal of growing McKinney’s city limits through the process of annexation.

We are proud to help you Spend Life Wisely. Meet the Team who works the numbers behind your loans.

2014-16 The city of McKinney conducted annual involuntary annexation to fill in strategic areas of city limits for infrastructure planning purposes. Late 2016 McKinney city limits included 67.6 square miles of land, with about 48.4 square miles of land in the ETJ. Aug. 15, 2017 SB 6 was passed by the Texas Legislature, requiring voter approval before unincorporated land is annexed into city limits.

May 24, 2019 HB 347 was passed, ending forced annexation by municipalities. March 16, 2021 McKinney City Council approves the annexation of two properties totaling 133 acres for the development of single-family homes. Early 2022 McKinney city limits include 69.1 square miles of land with 45.8 square miles of land remaining in the ETJ.

Comparing costs Taxes paid by residents in city limits differ from those paid by county residents. Collin County tax rate: $0.152443* | Pays for public safety, law enforcement, the county legal system, public works and other county programs City of McKinney tax rate: $0.457485* | Pays for parks and recreation, libraries, public works, public safety and other city services. McKinney Municipal Utility District tax rate: $1.019* | Pays for maintenance and operations as well as debt service of the development’s infrastructure * PER $100 VALUATION

McKinney

Jenna Hopkins Portfolio Manager NMLS #2051231

Hunter Evans Credit Analyst NMLS #2052874

detailed strategies including develop- ment partnerships, leveraging McKin- ney’s Capital Improvement Program and updating the development codes as ways to encourage ETJ developers to consider annexing. “Historically, at least in McKinney’s ETJ, annexation has been very polar- izing,” Quint said. “What we’re trying to do is take the polarization out of it The challenge of growing city lim- its has been up for debate in the state Legislature. In 2017, SB 6 passed, limiting forced annexation by municipalities. “[Neighborhoods] can’t be annexed unless [they] want to be annexed,” Collin County Commissioner Darrell Hale said. Hale represents Precinct 3, which includes parts of McKinney. He noted Collin County is the sole provider of vertical permits, including building permits, in unincorporated areas. However, annexation reform bills pose a challenge to cities still looking to expand their city limits. through partnerships.” State-level legislation “I’m extremely concerned, SB 6 … was some of the worst legislation as far as long-term city planning that’s ever been passed,” Fuller said. “I know it was not intentional, but the unintended consequences have been horrific.”

The city’s inability to annex and pro- vide municipal services, such as police and fire support, could create a higher demand on the county, Hale said. HB 1279, authored by Rep. Carl Tep- per, R-Lubbock, would “significantly reduce” the boundaries of a city’s ETJ, Tepper said in a statement. The bill is pending in the Texas House of Repre- sentatives as of early May. ETJ boundaries are determined by population and can reach up to 5 miles from city limits. The proposed bill would reduce those limits to a maxi- mum of one-half mile. “The ETJ was created to ensure that areas surrounding a municipality would grow uniformly with a munici- pality’s building and land standards,” Tepper said in a statement. “Given the now-voluntary nature of municipal annexation, the ETJ no longer serves its intended purpose.” The end of forced annexation has added additional assurance for ETJ homeowners and prospective buyers, Cox said. “[The legislation] allows people to make decisions to spend money on developments without the fear of the city coming in and taking them over without a vote,” Cox said.

Noyonika “Coco” Chakraborty

Credit Analyst NMLS #2376513

Keiran Branson Credit Analyst

Jay Villarreal Credit Analyst

McKinney Craig Ranch 6401 S. Custer Rd. McKinney, Texas (972) 569-8301

McKinney Redbud 1700 N. Redbud Blvd. McKinney, Texas (972) 548-3010

FirstUnitedBank.com

For more information, visit communityimpact.com .

Member FDIC.

MCKINNEY EDITION • MAY 2023