PILOT POINT — City Council members postponed their decision to give consent to a landowner’s request to create a municipal utility district in the city’s extraterritorial jurisdiction, or ETJ.
Because of the city’s recent history with utility districts, City Council members are hesitant to give their consent and they want each party’s attorney to discuss any possible conflicts.
“There are still so many questions we need answered,” Mayor Pete Hollar said Monday. “We want to know the impact this district will have on the city before agreeing to it.”
Eland Farms would be the city’s fourth district if approved in Pilot Point’s ETJ and it will be created on a tract of land adjacent to and east of FM1385 and approximately a mile south of FM455.
A utility district is an independent government entity that exists separately from cities and counties and a city’s consent is needed for a landowner to develop a district through the state Legislature. However, if consent isn’t granted, a developer can bypass the city and petition the Texas Commission on Environmental Quality for the district and the city’s consent is presumed.
In other words, a city can work with a developer and have some input, or refuse consent and have none.
The landowner and developer, Van Nichols, initiated talks with Pilot Point officials in an effort to form a developer’s agreement with the city to form a suitable scenario for both the city and his development before approaching the TCEQ.
Under the proposed agreement, the City Council will consent to the district’s creation as long as it is allowed to annex, or absorb, the district into its city limits 15 years after the development is completed.
By annexing the district, the city will be able to collect property taxes and other revenue. A city cannot collect taxes in its ETJ, which is outside city limits.
An ETJ is an area designated by the state as a method of defining potential areas for growth and future service boundaries for cities.
However, Nichols said he doesn’t want Pilot Point to annex his property. He said he and the city have already agreed to several agreements, but the city wants more than he’s willing to give.
“We’ve already agreed to give up a portion of our sales tax to the city for emergency services and we are allowing the city to annex a portion of our land so it can extend its ETJ,” he said.
If the city and Nichols cannot reach an agreement, Nichols said he will proceed with petitioning to get his district approved through the TCEQ.
Three districts already exist in Pilot Point’s ETJ. Four Seasons Ranch, Tally Ranch and Smiley Road were created between 2005 and 2007 and are expected to have large master-planned communities.
With the ability to incur debt and set and collect property taxes, developers use utility districts to reimburse themselves for the cost of installing infrastructure such as roads, water and sewer.
Four Seasons and Smiley Road were created by the Legislature with Pilot Point’s consent, but Tally Ranch was created by the TCEQ.
Each of the districts is still undeveloped. Landowners are waiting for the commercial growth, set to follow the Dallas North Tollway expansion, before developing their residential communities.
Because the developments are in Pilot Point’s ETJ, the city won’t be able to collect property taxes and cash in on the commercial and residential developments.
“It’s likely that when conditions are right for one district to develop, then conditions should be right for all of them to develop,” Hollar said. “We don’t know what the impact on our city and schools will be and who knows if we’ll be able to afford the growth.”
The city and Nichols are still working out an agreement and will address future plans at the next City Council meeting.
Nichols said he’s willing to work out an agreement with the city so both sides can benefit.
“I’m trying to be the good guy here because districts work when both sides can agree,” he said.
JOHN D. HARDEN can be reached at 940-566-6882. His e-mail address is email@example.com .