The city of Austin is cautiously taking steps toward annexing 28 houses in the Turtle Creek 1 neighborhood in Austin Township, northwest of Austin.

A majority of residents want to be annexed into the city to receive sewer and water services, but city officials are reluctant to schedule a sewer project until they create a new annexation policy to deal with complications from the Lansing sewer project completed in 2011.

The Austin City Council recently froze assessments on 33 of the 209.5 properties under the Lansing sewer project after Mower County District Judge Donald Rysavy overturned the $15,000-per-parcel assessments for three property owners in March. The other 30 properties were set to challenge their assessments as well, but Rysavy’s ruling that declares the city’s original assessment process was flawed has city officials rethinking their policies. The council discussed the annexation during its work session Monday.

Turtle Creek 1 residents approached the city last year about a potential annexation for sewer upgrades after 26 of the 28 houses were found to have noncompliant sewer systems by the Minnesota Pollution Control Agency, according to Public Works Director Steven Lang. The annexation could take place as soon as 2014, but the city and Austin Township have yet to start the annexation process.

An informal survey taken last month found the owners of 24 of those 28 houses wanted to be hooked up to the city sewer to solve compliance problems, with one homeowner yet to return a survey. In addition, several Turtle Creek 1 residents spoke favorably of the annexation to council members Monday.

Council members encouraged city staff to continue work on the potential annexation, but city officials say they won’t want to pursue a sewer project and subsequent assessments until every home agrees to the project.

“We have to wait and see what we’re going to do with Lansing,” Mayor Tom Stiehm said. Stiehm described the city as “snakebit” over the Lansing affair, and city officials agreed to wait on assessing properties until they figured out a new assessment policy.

Preliminary estimates for a sewer project at the Turtle Creek 1 neighborhood show each household paying about $19,000 over 15 years, though city officials have yet to officially assess the property. Lang told the council the city was looking into grants from the MPCA and the Public Facilities Authority, which would cut assessments for each household in half.