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MUD plans draw flak

Profile image for By John D. Harden / Staff Writer
By John D. Harden / Staff Writer

Impact of proposed municipal utility districts concern area mayors

AUBREY — Residential communities planned for the city of Aubrey’s extraterritorial jurisdiction have nearby municipality leaders concerned about the impact the population growth will have on their cities.

Cross Roads and Krugerville mayors have contacted Denton County leaders and expressed their concern about the effect the growth would have on schools, emergency services and infrastructure.

The main cause of concern for the municipal leaders is that the developers seek to establish municipal utility districts, or MUDs, to support their communities, which are expected to hold several thousand homes.

Utility districts are similar to school districts in that they have their own boundaries, tax rates, governing-board members and power to issue debt.

They are primarily used in Denton County to establish water and wastewater infrastructure to support residential growth.

However, a utility district is not required to provide schools, police or fire services for its residents, thus leaving the county and nearby municipalities to provide support out of their own pockets.

“I am opposed to the creation of any municipal utility districts,” Cross Roads Mayor Steve Smith said. “The only person who sees a benefit is the developer.”

Until annexed, a city cannot collect property taxes on homes in a utility district, meaning the city does not see any revenue from the growth.

Smith said a utility district can be beneficial to everyone, but he said the districts in Aubrey and surrounding cities’ ETJs are being created without much input from other leaders.

“They are developed under the radar and they aren’t planned for long-term stability,” he said.

The two districts raising the most questions are Venable Ranch and The Lakes Fresh Water Supply District of Denton County.

Krugerville Mayor Dave Hill said he’s against the creation of the districts and said he will keep voicing his opposition as plans move forward.

Venable Ranch property owners want to develop a residential community on approximately 2,300 acres located on the northwest corner of Blackjack Road and U.S. Highway 377.

The Lakes is about 1,800 acres in size and will be developed off Ike Byrom Road, just north of Providence Village, Aubrey City Planner Chantal Kirkland said.

The development is expected to have more than 5,000 homes.

Property owners for both developments have been in talks with Aubrey for months, and in December, Aubrey officials entered into a developers’ agreement with the owners of The Lakes.

A developers’ agreement is required before a district can be created in most cases and officials are now working on a developers’ agreement with Venable Ranch property owners.

Though The Lakes is also in the ETJ of Cross Roads and Krugerville, property owners never approached the respective cities, Smith said.

A phone call and e-mails to the developers of The Lakes on Monday were not returned.

One advantage to developing a utility district is that they promote growth, said Sara Bronin, a professor at the University of Connecticut School of Law and the author of a 2007 law review paper, “Wrestling With MUDs to Pin Down the Truth About Special Districts.”

But Bronin said one downside is that an area may grow faster than services can support.

In recent months, several regional leaders have also voiced opposition for utility districts. In Pilot Point, talks with a developer stalled earlier this year after the city and property owner could not reach an agreement on annexation.

And city planners in Little Elm called utility districts a burden on city services.

In a report to state legislators last year, lawmakers said they recognize that utility districts are flawed, but in the long run, districts provide a strong economic drive for growth.

Smith said he’s going to continue voicing his opposition against utility districts until the way in which they operate changes.

But Bronin said a change may be unlikely because it can be unpopular for lawmakers to introduce legislation that seeks to limit or control the way property owners develop their land.

JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.