ARGYLE — Town officials reached an agreement with a second developer Tuesday night, completing a three-party deal that makes Argyle a member of the Trinity River Authority, with two developers paying the lion’s share to make it happen.

Similar to an agreement reached earlier this month with the Canyon Falls developer, Argyle will allow Realty Capital Belmont Ltd. to pursue a special taxing district that would help fund infrastructure for a proposed 4,000-home subdivision in Argyle’s extraterritorial jurisdiction, or the area just outside the city limits. In exchange, developers for Belmont and Canyon Falls, a proposed 2,700-home subdivision between Argyle and Flower Mound, will help pay Argyle’s portion of a major sewer expansion planned by the Trinity River Authority.

Moreover, Northlake and Flower Mound will likely be a part of the expansion, if they also agree to the project as expected within the next few weeks, according to the authority’s representative, Bill Smith.

In all, the authority plans a $16 million to $20 million sewer expansion project between Denton and Flower Mound in anticipation of growth along Interstate 35W. The tab for Argyle’s portion will be between $3 million and $5 million. Interim Town Administrator Kay Godbey said the town would know the exact amounts for all parties after Flower Mound and Northlake vote on their portions of the project.

The Trinity River Authority is expected to vote to accept Argyle’s membership at its next regular meeting Dec. 6. The authority plans to begin issuing bonds for the sewer project in February. Construction should begin in early 2008.

Except for the financing agreement, Argyle Mayor Richard Tucker recused himself from the majority of the discussion and the vote on the Belmont subdivision agreement. He questioned why Argyle’s financial share was 30 percent when preliminary plans showed that Argyle would use about 22 percent of the new sewer line’s capacity. Smith told the council it was because Argyle was further up the line of the three cities tapping the line.

Government-backed funding options

Even though the Canyon Falls developer told the council he would likely pursue a water control and improvement district to fund his project, which requires state approval, Clay Crawford, attorney for the Belmont development, said the Belmont developers would prefer to work with local officials and form a freshwater supply district to pay for theirs.

“We’ll ask one of y’all to come with us, along with a representative of the school district, to stand shoulder to shoulder with us and ask the county commissioners’ approval. If we don’t get approval there, we still have our other options,” Crawford said, referring to the other special taxing districts they can pursue through either the Texas Commission on Environmental Quality or the Legislature.

In drafting the agreements, Argyle allows both developers to pursue either a freshwater supply district, a water control and improvement district or a special-law district to pay for the development. Argyle Town Attorney Matthew Boyle told the council that the agreements protect the town from liability should the developer default on the bonds.

Representatives have previously declined to say how much in government-backed bonds would be needed to pay for the development, citing the need to get more information from the various entities involved, including the Trinity River Authority.

Effect on Argyle schools

Throughout negotiations, several council members expressed concern over the impact the high-density projects would have on Argyle schools. The district, which became 3A this year, has one elementary school, one middle school and one high school.

Belmont representatives said they chose their location because of the school district’s potential. As part of the agreement, they dedicated 36 acres for two school sites, similar to the Canyon Falls agreement, which dedicated a minimum of six acres and the possibility of 10 more.

In addition, Belmont representative Bryan Holland told the council that they were working on an educational foundation that would be funded by sales of real property in the district.

Through a deed restriction, a half-percent of the sales price, both from the initial sale and every resale thereafter, becomes payable to the foundation. Half the fund would go to Argyle schools each year, he said.

“Really, it’s an assessment,” Holland said, adding that since they estimated as much as $3.5 million would be available the first year of the foundation, they hoped to make it possible to fund bricks-and-mortar projects for the school district.

Vagabond voters

Council member Bonny Haynes continued to express concern about the long-term presence of mobile homes in the districts as they are formed, wondering why the residents couldn’t be asked to leave after the initial election.

The Belmont developers have already put half a dozen residents in place around their 1,000-acre property. Several University of North Texas students are among the four who pay $150 a month each to live in two mobile homes on Old Justin Road and two others who live in an old farmhouse on Prairie Mound Cemetery Road. Soon after they moved in, all six people registered to vote at those addresses and the residents signed petitions to annex part of the property into Northlake, according to documents obtained through open records requests.

A freshwater supply district can be formed only by a vote of those living inside the district. After the district is formed, it must hold elections every two years for its board of directors.

Crawford told the council that those residents in the mobile homes are needed to be the initial directors and supervisors of the district.

“When they are no longer on board and no longer needed for governance, then those homes are removed,” Crawford said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.