PROVIDENCE VILLAGE — An appeals court has ruled in favor of the Mustang Special Utility District in its dispute with Providence Village over the right to provide water to the town.
Providence Village town leaders last week requested an extension from the Second District Court of Appeals to file their request for a rehearing of the Sept. 27 decision.
The appeals court overturned a September 2011 decision that denied Mustang governmental immunity, which opened the door for town officials to sue in an attempt to block the transfer of utility rights between water providers Mustang and the Providence Village Water Control and Improvement District.
The appeals court reinstated Mustang’s governmental immunity, which protects governments from some lawsuits.
The appeals court noted that Providence Village’s original lawsuit did not claim that Mustang operated beyond the scope of its powers.
However, town officials say they believe Mustang is in violation of the “reserved powers doctrine,” which is a legal principle that prevents earlier governments from ignoring equal governing powers of their successors.
Providence Village leaders said they were left out of the decision to determine who controlled the town’s water services, but Mustang officials say the town does not have any decision-making rights to the water services.
Providence Village has about 1,850 water customers and 1,600 wastewater customers. Officials and residents say their elected officials should decide what’s best for the community.
But Mustang officials said an agreement regarding utility rights was made years before the town was incorporated in spring 2010.
In 1985, Mustang obtained a Certificate of Convenience and Necessity to provide water service in northeast Denton County.
In 2000, Providence Village was developed as a master-planned community and the developer, Huffines Communities, and the Denton County Commissioners Court created the Denton County Fresh Water Supply District No. 9 to finance a water and wastewater line to the area. The freshwater district was created in an area covered by Mustang.
To attain road and police powers, the water district was converted to a Water Control and Improvement District in November 2010 and was later renamed the Providence Village Water Control and Improvement District.
The water district agreed it would contract with Mustang for the right to operate and provide water and sewer services.
In 2002, Mustang became a utility district with a publicly elected governing board.
Between 2005 and 2007, the water district and Mustang entered into an agreement to transfer all water distribution facilities to Mustang by Oct. 1, 2011.
In February 2011, the Providence Village Town Council voted to protest the transfer to Mustang, and in June the town sued Mustang and the water district, stating the town has the right to control its water and sewer services.
In September 2011, Denton County District Judge Doug Robison ruled that the town of Providence Village could sue Mustang and the water district over the contract that transfers service from one to the other.
Mustang appealed and last month the appeals court decision overturned Robinson’s ruling.
Chris Boyd, Mustang’s general manager, said Mustang will continue to oppose whatever Providence Village leaders decide to challenge.
“They have no rights to the water,” Boyd said. “We believe the ruling will stand, but we will continue to oppose any actions they take to prolong the case.”
Mustang’s attorney Robert Harris said it’s unlikely a court will grant Providence Village a hearing unless new material is presented.
Providence Village Mayor Brian Roberson and town leaders say the water and sewer services should belong to the town and its residents. He has said the underlying reason for the suit is that the town had no input into the decision.
He also said that much of the infrastructure was financed with bonds, which are still being repaid by the Providence Village residents at a rate of $1 per $100 valuation.
If Providence Village follows through with its request for a new hearing, the appeals court could rule Dec. 12 on that request.
JOHN D. HARDEN can be reached at 940-566-6882. His e-mail address is firstname.lastname@example.org .