PRESENTER: Presenter
Jean Drew, AICP, CNU-A, Planning and Development Services Assistant Director
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SUBJECT: Title
Discuss and consider a resolution to consent to the creation of Guadalupe County Municipal Utility District (MUD) No. 5 within the City's Extraterritorial Jurisdiction (ETJ) in Guadalupe County, consisting of approximately 299.78 acres located on the north side of FM 725, west of The Bandit Golf Course in the Long Creek Subdivision, and south of the intersection of Altwein Lane and FM 725, and consider authorizing the City Manager to approve a development agreement between the City of New Braunfels and Highlander NB One, LLC related to the City’s consent to the creation of Guadalupe County MUD No. 5.
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DEPARTMENT: Planning and Development Services
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COUNCIL DISTRICTS IMPACTED: Outside City Limits
BACKGROUND INFORMATION:
Case #: CS22-0123
Applicants/Owners: Highlander NB One, LLC
John Mayberry
P.O. Box 470249
Fort Worth, TX 76147
(214) 505-7854 jmaberry@highlanderrep.com
Staff Contact: Matt Greene
(830) 221-4053 mgreene@nbtexas.org
The Texas Water Code (Chapter 54) and the Texas Local Government Code (Chapter 42, Section 42.042) (see resource links) outline the procedures for the creation of Municipal Utility Districts (MUDs). A MUD is a political subdivision of the State: they are one of the several types of special districts that function as independent, limited governments of their own. The purpose of a MUD is to provide a developer an alternate method of financing infrastructure, such as water, sewer, drainage, and roads. Managed by a board of directors elected by the property owners within the MUD, the MUD can levy its own taxes and fees on the future property owners within the development to repay the developer for their up-front costs. MUDs are generally desired by developers when the subject properties lie beyond the physical reach of utility providers and/or outside utility company Certificates of Convenience and Necessity (CCNs).
When a proposed MUD lies within the boundaries of a city’s Extraterritorial Jurisdiction (ETJ), state statute indicates that the respective city must give its consent before the MUD may be established. Consent by the municipality allows the developer to initiate proceedings to create the MUD through the Texas Commission on Environmental Quality (TCEQ). State statute further states:
If the city fails or refuses to give its consent for the creation of the MUD on mutually agreeable terms within 90 days after the date the City Council receives a written request for the consent, a majority of the qualified voters of the area of the proposed political subdivision and the owners of at least 50 percent of the land in the proposed political subdivision may petition the City Council to make available to the area the water, sanitary sewer services, or both that would be provided by the political subdivision. If, within 120 days after the date the City Council receives the petition, the City Council fails to make a contract with a majority of the qualified voters of the area of the proposed political subdivision and the owners of at least 50 percent of the land in the proposed MUD to provide the services, that failure constitutes the governing body's consent to the creation of the proposed political subdivision.
The petition to consent to the creation of Guadalupe County MUD No. 5 was delivered to the City on March 28, 2022. The 90-day period for which the City may consent or object to the creation of the proposed MUD expires on June 26, 2022. Should the City Council deny the petitioner’s request, their appeal relief is via TCEQ.
Location and Features
The subject property is comprised of approximately 299.78 acres on the north side of FM 725, west of The Bandit Golf Course in the Long Creek Subdivision, and south of the intersection of Altwein Lane and FM 725 in New Braunfels’ ETJ in Guadalupe County. The property is mostly undeveloped and utilized for agricultural purposes but does have a single-family residence. An LCRA electric transmission line and easement occupy most of the eastern property boundary. The subject property has approximately 1,700 feet of frontage on FM 725, approximately 3,700 feet of frontage on the Guadalupe River between Lake Dunlap and Lake McQueeney, and approximately 50 acres of the property is located within the 100-year floodplain.
The applicant’s petition indicates the planned uses of the property are single-family residential and commercial. There have not yet been any subdivision application submittals or approvals. The latest conceptual land plan provided by the petitioner indicates the development will consist of single-family residential use only.
Transportation
The property fronts FM 725, a 150-foot wide Principal Arterial identified on the City’s Regional Transportation Plan. The existing right-of-way width of FM 725 adjacent to the property varies between 120 feet and 235 feet. A minimum right-of-way dedication of approximately 15 feet will be required adjacent to FM 725 where the right-of-way is currently less than 120 feet wide.
The petitioner has stated a bridge will need to be constructed across a wide area of floodplain to access the back 255 acres of the property abutting the river. The MUD is intended to help the developer finance the cost of construction of the bridge.
Utilities
Green Valley Special Utility District (GVSUD) will provide water, and Guadalupe-Blanco River Authority (GBRA) will provide sewer service. The MUD is intended to help the developer finance offsite improvements required to bring utilities to the site.
Development Agreement
Outside city limits in the ETJ, the City’s development regulations are limited to compliance with the Subdivision Platting Ordinance. Hence, without a MUD, development can still occur, simply in compliance with the city’s platting rules. Land use and other development standards are not enforceable in the ETJ unless such regulations are agreed upon through the execution of a development agreement between the developer and the City. To ensure development within the proposed MUD is of a caliber that is a benefit and an asset, rather than a detriment, to the residents and taxpayers of New Braunfels, and to assure water and wastewater infrastructure, service, and long-term maintenance are addressed, staff recommends the City and the developer enter into a development agreement under the authority of Chapter 212 of the Local Government Code. This Development Agreement would identify the development standards that will help ensure the development is at least of similar quality to development within the city limits of New Braunfels and implements the City’s comprehensive plan, Envision New Braunfels.
ISSUE:
The proposed development agreement (attached) includes minimum development standards regarding housing diversity, landscaping, lighting, historical and archeological protection/remediation, riparian buffer zones, voluntary annexation request upon dissolution of the MUD*, and the requirement to obtain building permits and inspections from the City. However, the applicant disagrees with many of the terms of the development agreement as proposed by City staff (see petitioner’s redlined version of the proposed development agreement attached). Below is a summary of the deviations proposed by the petitioner:
• Article I, Section 1.1, definition of Development Regulations: The petitioner is proposing the definition of Development Regulations be defined as the regulations listed in attachment C as they exist today, not including any future amendments or changes unless otherwise approved in writing by the Developer, rather than as listed in Exhibit C and applicable at the time of development, as proposed in staff’s draft of the Development Agreement.
• Article I, Section 1.1, definition of Development Regulations: The petitioner has added the term “General Plan” and definition and added an accompanying attachment of a “General Plan” of the proposed development. Staff doesn’t recommend a “General Plan” be associated with the Development Agreement as the “General Plan” has not been reviewed for compliance with the City’s Subdivision Platting Ordinance as there is not enough information on the plan, including specific dimensions of lots, cul-de-sacs, street curvature and return radii, easements, etc. to review for compliance.
• Article I, Section 1.2 Exhibits: The petitioner has removed Exhibit B. the Petition for Consent to the Creation of a Municipal Utility District, from the attachments to the Development Agreement. Staff believes the document should remain an attachment to the Development Agreement to provide pertinent, consistent and transparent information to the creation of the MUD associated with the Development Agreement.
• Article I, Section 1.2 Exhibits: The petitioner has removed Chapter 14 Buildings and Building Regulations from the Exhibit as the petitioner does not concur with the requirement for City building permitting and inspections. As stated in a later bullet point of this report, staff recommends the requirement for City building permitting and inspections for development within the MUD and therefore does not agree with the removal of Chapter 14 from Exhibit C.
• Article I, Section 1.2 Exhibits: The petitioner has removed Exhibit D, the Mandatory Disclosure, from the attachments to the Development Agreement. The City’s legal counsel advises the attachment remain in the Development Agreement as drafted by staff.
• Article II: the petitioner has added language referencing the “General Plan” and states it complies with the City’s applicable ordinances. Staff does not recommend a “General Plan” be associated with the Development Agreement as the “General Plan” has not been reviewed for compliance with the City’s Subdivision Platting Ordinance as there is not enough information on the plan, including specific dimensions of lots, cul-de-sacs, street curvature and return radii, easements, etc. to review for compliance.
• Article III, Section 3.1(e) Development of Tract: The petitioner added a reference to the “General Plan” and language stating the “General Plan” is in compliance with the City’s Regional Transportation and Hike and Bike Trail Plan and shall not be required to dedicate any additional hike and bike trails or pay any fees. Staff believes the development should be required to meet the Regional Transportation and Hike and Bike Trails Plan requirements as adopted at the time of subdivision master planning/platting and has simply proposed development of the Tract be in compliance with said plan in staff’s draft of the development agreement.
• Article III, Section 3.1(i) Development of Tract: The petitioner has removed the requirement for lighting standards compliant with City regulations. The City is not comfortable with removing lighting restrictions completely and recommends compliance with “Dark Skies” standards as has been incorporated into the last two development agreements related to MUDs the City has processed. The City’s attached draft of the development agreement includes this update pertaining to adherence with “Dark Skies” standards.
• Article III, Section 3.1(k) Development of Tract: Regarding residential housing diversity, the petitioner has removed the requirement for a minimum number of lot sizes and house sizes/floor plans. Staff’s development agreement draft includes the requirement for a minimum of 3 lot sizes and 3 house sizes/floor plans within the development, which is consistent with staff’s recommendations with previous MUD related development agreements.
• Article III, Section 3.1(l) Development of Tract: The petitioner is proposing street trees be required only on one side of collector classification and above streets with a minimum requirement of 1 tree at least 1.5 inches in caliper every 100 feet (maximum) and no requirement for replacement should any required street tree die during the life of the MUD. Staff is recommending street trees be required on both sides of collector classification and above streets with a minimum requirement of 1 tree at least 3 inches in caliper every 40 feet (maximum) and required tree replacement should any required street tree die during the life of the MUD. Staff’s recommendation is consistent with standards incorporated in previous MUD related development agreements.
• Article III, Section 3.1(m) Development of Tract: The petitioner has removed the requirement for tree preservation. Staff recommends the developer provide any means of tree preservation as the City does not regulate tree preservation in the ETJ and any standard would be greater than no standard for tree preservation.
• Article III, Section 3.1(n) Development of Tract: The petitioner has removed the requirement for any minimum landscaping requirements (other than those mentioned in Article III, Section 3.1(l)). Staff recommends the developer provide any means of minimum landscaping requirements as the City does not regulate landscaping in the ETJ and any standard would be greater than no standard for landscaping.
• Article III, Section 3.1(p) Development of Tract: The petitioner has removed the requirement for City building permits and building inspections and compliance with the Chapter 14 Buildings and Building Regulations of the City’s Code of Ordinances. To ensure public safety and quality development, staff strongly recommends the requirement to obtain building permits and building inspections for development within the MUD remain in the proposed development agreement.
• Article III, Section 3.1(q) Development of Tract: The petitioner has removed the requirement for Riparian Buffers. Staff recommends the Riparian Buffer requirement as stated in staff’s draft of the development agreement remain to protect the Guadalupe River and its steep riverbank as well as areas adjacent to the floodplain. This proposed Riparian Buffer requirement is identical to the one established in the Mayfair Development and Design Control Document (DDCD) and is consistent with Action 5.2 of Envision New Braunfels.
• Article III, Section 3.2a Utilities: The petitioner has removed the 120-day start period for negotiations for water service with GVSUD. The City’s legal counsel recommends the language remain in the development agreement as drafted by staff, for negotiations to begin within 120 days of the effective date of approval of the development agreement.
• Article III, Section 3.4 Park and Recreational Facilities: The petitioner has revised this section and references the “General Plan” and added language stating if park and recreational facilities within the Tract are in substantial compliance with the “General Plan’, the developer shall be found to be in compliance with the City Code regarding parkland dedication and any other City ordinances, whether now in effect or to be adopted in the future, regarding a developer’s provision of park and recreational facilities, parkland dedication, or monetary payments related to parkland and the developer shall not be required to dedicate any additional park land or open space or pay any fees. The “General Plan” has not been reviewed for compliance with the City’s Subdivision Platting Ordinance and parkland dedication and development requirements, as there is not enough information on the plan, including specific acreage of parkland, specific park improvements or number of residential lots to be developed. Staff recommends the development be required to meet the parkland dedication and development requirements in effect at the time of subdivision master planning/platting and the development standard remain as stated in the draft of the development agreement: “The developer will comply with the City’s parkland dedication ordinance as set forth in the City Code, with approval of the City.”
• Article III, Section 3.6 Temporary Housing: This section has been added by the petitioner and states: “City agrees manufactured housing, or other forms of temporary housing, may be placed on the Tract for the District’s creation and confirmation process. Such temporary housing may be located on any site within the Tract for such purposes regardless of whether the land has been subdivided”. Staff does not recommend this language be included in the development agreement as it may be misconstrued as to when platting is required. Buildings may typically be allowed to be placed or constructed upon unplatted properties that are still in their original configuration as of January 1984, prior to the adoption of the City’s Subdivision Platting Ordinance, but a property must first be platted prior to development if it is to be further subdivided or partitioned after adoption of the Subdivision Platting Ordinance.
• Article V, Section 5.1 Annexation: The petitioner has removed all of staff’s proposed language under this section of the draft development agreement and provided their own language. Staff does not concur with the deletion of the original language but has added some of the additional language proposed by the petitioner, which is consistent with recent development agreements approved with associated MUDs and is reflected in staff’s attached draft of the development agreement. Staff’s recommendation is simply to include the option for annexation upon MUD dissolution by making such dissolution an automatic trigger for voluntary requested annexation.
• Article VI, Section 6.4 Non-Waiver of Immunity: The petitioner has removed this entire section from the development agreement. The City’s legal counsel does not concur with the deletion of this section from the development agreement.
• Article VI, Section 6.10, Recordation: The petitioner has revised this section to indicate a memorandum of this development agreement will be recorded in the deed records of Guadalupe County rather than recordation of the actual development agreement. Staff does not concur with this revision and recommends recordation of the actual development agreement as would be consistent with previously approved development agreements associated with MUDs. Staff has updated this section of the development agreement draft to reflect Guadalupe County rather than Comal County.
The proposed MUD, with the associated development agreement proposed by staff, would be in keeping with adopted guidelines in Envision New Braunfels, our Comprehensive Plan:
• Action 1.3: Encourage balanced and fiscally responsible land use patterns.
• Action 1.12: Collaborate with internal and with external partners and stakeholders to identify and connect sidewalk and bicycle lanes to trails to improve access and connectivity to key hubs and desirable destinations, i.e. downtown, dining and shopping areas, rivers, parks, Wurstfest, Gruene, Headwaters at the Comal, etc.
• Action 2.1: Sustain community livability for all ages and economic backgrounds.
• Action 3.19: Improve walkability across town to attract younger generations seeking pedestrian connections.
• Action 3.20: Encourage residential development to include pedestrian and bicycle friendly trails to nearby schools, preferably within a 2-mile radius of each school.
• Action 3.30: Encourage and incentivize workforce/affordable housing to attract new workforce entrants and young families.
• Action 5.2: Discourage development in Edwards Aquifer Recharge and contributing zones, stream zones, flood-prone areas, steep slopes, or other ecologically constrained areas. Where development in these areas must occur, require that it be environmentally sound using tools such as but not limited to low impact development (LID).
• Action 6.4: Consider how each new development project impacts the transportation system and ensure appropriate mitigation is implemented.
• Action 6.5: Utilize public/private partnerships to guide growth and investment.
• Action 7.10: Require more street connectivity/adopt connectivity ratios.
• Action 7.11: Allow for smaller/narrower streets and lot size variety within individual subdivisions.
• Action 7.14: Increase tree canopy for increased shade to encourage walking.
• Action 7.19: Improve connectivity for all modes of transportation including bicycles.
• Action 7.21: Ensure there is connected multi-modal access to all public facilities and from all parts of town.
• Aging in Place:
o Encourage housing that supports aging in the community.
o Encourage mobility options that support older motorists, pedestrians, transit riders and cyclists.
• Regional Planning:
o Balance resources in an equitable manner that does not lead to disinvestment in existing New Braunfels.
o Assure the long-term fiscal health of New Braunfels, and that policy decisions do not create an undue fiscal burden on the City or others.
o Ensure that the policy provides guidance for decisions made by utility providers, so they can aid in achieving Envision New Braunfels.
The subject property lies within the Dunlap Sub-Area which bridges together many communities east of IH 35 and includes the scenic landscape along both banks of the Guadalupe River between Highway 46 and FM 725, and is identified for balancing future growth with protection of the landscape.
FISCAL IMPACT:
If the City were to annex the property within a MUD prior to the MUD’s expiration, the City would assume any remaining debt of the MUD.
If the City were to annex the property within a MUD after expiration of the MUD, the City would assume roadway and public infrastructure maintenance, and provide City services to the new City residents.
The petition to consent to the creation of the MUD indicates a component of commercial use, however, the petitioner has stated single-family residential use is intended within the MUD. The draft development agreement, including the petitioner’s proposal, includes the necessary language for entering into a Strategic Partnership Agreement (SPA) should actual commercial development occur within the MUD.
Recommendation
RECOMMENDATION:
Denial. As proposed by the applicant, the MUD would be inconsistent with Envision New Braunfels (comprehensive plan), resulting in an undesirable development pattern in the ETJ. However, staff would support consent if the applicant would be willing to enter into the attached development agreement as drafted by staff, which includes provisions to ensure the development is in accordance with the comprehensive plan. *
*Note: pursuant to state law, a city may not condition its consent to a MUD on a requirement that the developer agree to annexation, as such, this recommendation of denial is not based, in any way, on the developer agreeing or not agreeing to annexation provisions within the proposed development agreement.
Resource Links:
• Chapter 54 of the Texas Water Code: WATER CODE CHAPTER 54. MUNICIPAL UTILITY DISTRICTS (texas.gov) <https://statutes.capitol.texas.gov/Docs/WA/htm/WA.54.htm>
• Chapter 42 of the Texas Local Government Code: LOCAL GOVERNMENT CODE CHAPTER 42. EXTRATERRITORIAL JURISDICTION OF MUNICIPALITIES (texas.gov) <https://statutes.capitol.texas.gov/Docs/LG/htm/LG.42.htm>
• Section 118-4 Development Agreements, of the City of New Braunfels Code of Ordinances: <https://library.municode.com/tx/new_braunfels/codes/code_of_ordinances?nodeId=PTIICOOR_CH118SUPL_ARTIINGE_S118-4DEAG>