While future annexations may be on the horizon for the city of Winona, the island city still has a long way to go before it will have paid for its last annexation agreement, and even longer before those investments pay off.
The city has spent $2.6 million to date on sewer and water lines for properties within the 2005 Orderly Annexation Agreement (OAA) with Wilson Township. So far the city has received $279,438 in utility connection fees from newly annexed properties.
Sparsely built subdivisions in the annexed area have meant that 21 properties have been annexed so far and approximately 110 properties have yet to request annexation. There is considerably more spending for sewer and water service still ahead for the city, though exactly how much is unclear.
The controversial 2005 agreement between Wilson and Winona did resolve, at least temporarily, land disputes between the two governments. The agreement protects Wilson from further annexation for residential and commercial use until 2015, and allows the city to freely annex property within the OAA area upon landowner request.
Two housing developments were part of the OAA. Phillips subdivision on County Road 17 in Pleasant Valley has plans for a total of 102 lots. Sweetwater subdivision past Garvin Heights Vineyard on County Road 44 has room for about 40 lots. Unfortunately, the city's and the subdivisions' shared dreams of development were put in motion just before the 2008 housing market crash. Phillips currently has six finished homes, and one foundation. The Sweetwater site has yet to be platted for new homes.
More spending ahead
The $2.6 million figure is not the end of city spending for the OAA. Public Works Director Keith Nelson said that the city has plans to build a $750,000 in-ground water tank on the side of a bluff along County Road 17 at some point in time. Once Phillips and the rest of Pleasant Valley is fully developed, the tank would be needed to provide water supply and pressure to homes, Nelson said.
The city has more pipes to lay, as well. Sweetwater and many of the existing homes in OAA do not have access to city water and sewer. According to City Public Works Director Keith Nelson, no estimates of those costs exist. Nelson agreed that the costs may be considerable, but claimed that the city does not make any assessment of potential costs for such projects until a project request is made.
Since the OAA specifies that after a property owner requests annexation, the city has only three years to provide sewer and water or deny the annexation request, Nelson would have to work quickly to prepare cost estimates so that city leaders could decide how and if the city could fund such projects.
In the absence of better information, the length of roads that would need to be serviced by city sewer and water may provide taxpayers with some sense of the cost of future projects.
The city spent $700,000 on providing sewer and water lines to approximately a half mile of Pinecrest Road and Valley View Drive. There are over one and a half miles of roads within the OAA yet to be serviced by such pipes.
The city spent $1.9 million on "trunk" lines running roughly two and a half miles along County Road 17. About one mile of trunk line would be required to service the Sweetwater subdivision.
However, the terrain where new pipes would be laid and the amount of subsequent roadway repair needed affects the cost of installing pipes. That means that costs vary greatly, City Engineer Brian DeFrang explained.
So, eight years after the OAA, the public, never given a total cost estimate for the annexation, is still in the dark about the final cost of the annexation.
Connection fees: will sewer and water funds be replenished?
Individual property owners who annex to the city pay a $12,000 connection fee to access city water and sewer lines. When property owners subdivide their property, which could mean a large housing development-style subdivision or a single parcel splitting in two, they pay $17,000 per developable acre of land. Those annexation fees, along with service costs paid by existing residents, go into city sewer and water funds, the same funds that were tapped for the $2.6 million Pleasant Valley pipes.
"I expect someday the city will recoup [its expenses] just based on access fees," Nelson said. That expectation is based on three assumptions: first, that the Phillips and Sweetwater subdivisions will be filled; second, that all or nearly all of the land owners within the OAA will request annexation; and, third, that a large number of those land owners subdivide their property, triggering more connection fees for the city.
City Planner Mark Moeller agreed that recovering the city's expenses through connection fees was possible, though it would take a long time and require a large number of the existing properties in the OAA to subdivide.
Assuming that Phillips and Sweetwater are fully developed and assuming that all of the existing properties in the OAA are annexed and pay connection fees, recovering the costs of current pipes and the Pleasant Valley water tank will require about 57 developable acres to subdivide for residential development. Repaying the unknown costs of future pipes will require even more.
"This was not done as a one-decade project," Moeller said. "It is something that will be absorbed over a long period of time."