PRESENTER: Presenter
Christopher J. Looney, AICP, Planning and Development Services Director
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SUBJECT: Title
Discuss and consider a resolution to consent to the creation of the Flying W Municipal Utility District (MUD) within the City's Extraterritorial Jurisdiction (ETJ) in Comal County, consisting of approximately 362 acres situated on the west side of FM 1102, north of Havenwood at Hunters Crossing Subdivision, Units 1 and 2 and south of Unit 3, across from the intersection of Watson Lane West, and consider authorizing the City Manager to approve a development agreement between the City of New Braunfels and Aguilas Robles, LLC and MJD Endeavors, LLC related to the City’s consent to the creation of the Flying W MUD.
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DEPARTMENT: Planning and Development Services
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COUNCIL DISTRICTS IMPACTED: Outside City Limits
BACKGROUND INFORMATION:
Case #: CS22-0011
Applicants/Owners: Aguilas Robles, LLC, by TriOak Development, LLC
Joshua Majors, Manager
4122 Pond Hill Rd.
Suite 101
San Antonio, TX 78231
(210) 681-2951, ext. 110 jmajors@cudeengineers.com
MJD Endeavors, LLC
Justin Davis, Manager
412 S. Adams St.
Suite 1214
Fredericksburg, TX 78624
(512) 417-3762 justin.davis.here@gmail.com
MJD Endeavors, LLC
David Tidwell, Manager
12105 Barrel Bend
Austin, TX 78748
(512) 939-4016 d.tidwellaustin@gmail.com
Staff Contact: Matt Greene
(830) 221-4053 mgreene@nbtexas.org
City Council postponed this item from their May 9th meeting with direction that the petitioner work with staff on the terms of the proposed Development Agreement prior to their next meeting. A meeting between the petitioner and City staff occurred on May 13, 2022. The petitioner revised and resubmitted their proposed edits to the Development Agreement which was presented to City Council at their May 23rd meeting. City Council postponed the item again to the June 13th meeting, to allow the petitioner to continue to work with staff on language for the development agreement that would address the City’s concerns with development over the Edwards Aquifer Recharge Zone.
Staff met with the petitioner on May 26th to further discuss options that would address staff and City Council concerns regarding density and impervious cover over the Edwards Aquifer Recharge Zone. Staff suggested conservation community development standards and/or limiting the Edwards Aquifer Recharge Zone to development of the subdivision’s larger lots, and/or increasing the park/recreation/open space over the Edwards Aquifer Recharge Zone more than 14%, and/or adopt a maximum impervious cover standard. The petitioner verbally expressed he was willing to commit to requiring a mix of the proposed development’s two smaller lot sizes over the Edwards Aquifer Recharge Zone (40-foot wide lots and 45-foot wide lots). After discussing further with staff, it was concluded establishing a maximum impervious cover limitation may be more beneficial than proposing a mix of the two smaller lot sizes. The petitioner has since responded with a written proposal restricting the development to a maximum impervious cover of 45% over the Edwards Aquifer Recharge Zone. Staff was hopeful the number would be closer to 25% to 30% to be more consistent with nearby communities who limit impervious cover for better protection of our aquifer.
The petitioner’s legal counsel later requested two changes to the building permit process be incorporated into the proposed development agreement. The first request was to waive the initial building permitting fees and pay the fees under a separate name, such as “regional transport fee”, which would cause them to be an allowable reimbursable expense to the petitioner when the MUD bonds are issued. Otherwise, building permit fees are not reimbursable to the developer through their MUD. The petitioner offered to pay the fees in a lump sum when a unit of the subdivision is platted instead of when an individual house is permitted by the builder at the time of construction.
The second request from the petitioner’s counsel was to allow “prairie building” which is building houses before the streets and utilities are completed and approved. This is not allowed under the City’s adopted Subdivision Platting Ordinance for life-safety reasons. The petitioner offered the completed houses would not be occupied until the streets and utilities are approved.
Staff firmly opposes the petitioner’s proposal regarding building permitting and inspections. The building permit fees cannot be accurately assessed solely on lot size, which is all that is reflected when a plat is filed. A blanket fee for each lot would be most difficult to determine as the building permit fee is dependent on the square footage of each home and is combined with other established permit fees for other improvements such as fences, storage sheds, pools, etc. The blanket permit fee would add another layer of administrative review when construction plan changes are made when the homes were actually built. It is exceedingly rare in the development process to have the homes designed and situated on each lot when the plat for the unit is filed.
“Prairie building” is a health and safety concern as workers and buildings are not protected from fire or flood and there is no EMS access if the roads are not in place. Staff has worked with another development in the ETJ with a similar request and was able to make concessions with specific parameters. Staff is willing to work out details for model homes only with the petitioner prior to recordation of the development agreement if it is the desire of City Council to approve this concession as part of the development agreement. The petitioner has expressed the “prairie building” allowance would only be for about 20 homes in each unit of the development. Access and water provisions approved by the Fire Marshal’s office would still need to be met.
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 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 the 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 this larger version of the Flying W MUD was delivered to the City on March 18, 2022. The 90-day period for which the City may consent or object to the creation of the proposed MUD expires on June 16, 2022. Should City Council deny consent, the petitioners’ appeal relief is via TCEQ.
Location and Features
The subject property is comprised of approximately 362 acres on the west side of FM 1102, north of Havenwood at Hunters Crossing Subdivision, Units 1 and 2 and south of Unit 3, across from the intersection of Watson Lane West in New Braunfels’ ETJ in Comal County. The property is currently developed with two single-family residences, and a third single-family residence converted into a church along with multiple accessory buildings, two septic systems and a water well according to the Comal Appraisal District records.
At the May 23rd City Council meeting, the petitioner represented an on the ground survey of the Edwards Aquifer Recharge Zone had been conducted by a privately hired geologist and the survey indicates only approximately 63 acres (17%) of the proposed MUD is over the Edwards Aquifer Recharge Zone. The petitioner provided the City with CAD files of the Edwards Aquifer Recharge Zone boundaries and City GIS staff imported the data into the City’s GIS map and found the data shows approximately 71.9 acres (20%) of the proposed MUD being over the recharge zone.
The petitioner’s petition indicates the planned uses of the property are single-family residential and multifamily, however, in subsequent meetings with the petitioner, they have indicated the development will most likely be entirely single-family residential.
Transportation
The property fronts FM 1102, a 150-foot wide Principal Arterial identified on the City’s Regional Transportation Plan. The existing right-of-way width of FM 1102 is approximately 120 feet. A minimum right-of-way dedication of approximately 15 feet will be required adjacent to FM 1102 with platting of the subject property.
Water
Approximately 43 acres of the subject property adjacent to FM 1102 (approximately 12% of the proposed MUD) is located within Crystal Clear Special Utility District’s (CCSUD) water CCN with the remainder of the property located outside of an existing water CCN. The petitioner anticipates CCSUD will be their water provider, but it has not been confirmed at this time.
Wastewater
No portion of the property is located within an existing wastewater CCN. CCSUD’s wastewater CCN boundaries are approximately 350 feet south of the subject property on the east side of FM 1102, encompassing the adjacent Crossings at Havenwood subdivision. The petitioner indicated CCSUD informed them the current site of the wastewater package plant within the Crossings at Havenwood is not large enough to accommodate the additional equipment needed to serve the proposed development within the MUD. Therefore, the petitioner is proposing to construct a wastewater treatment plant that will be owned, operated and maintained by a qualified and licensed operator.
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 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 petitioner 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:
Staff has been negotiating the development agreement with the petitioner to include minimum development standards regarding lot density over the Edward’s Aquifer Recharge Zone, housing diversity, landscaping, lighting, historic and archeological protection/remediation, voluntary annexation request upon dissolution of the MUD*, and the requirement to obtain city building permits and inspections. The petitioner has agreed to all but two terms of the development agreement as recommended by staff, which are the building permits and inspections and alternatives for protection of the Edwards Aquifer Recharge Zone. As mentioned previously in this agenda memo, staff is opposed to the petitioner’s proposed modifications to the building permit and inspections requirements, but willing to work with the petitioner to establish parameters to potentially allow limited “prairie building” of model homes if the proposal is approved by City Council. Staff does not believe the petitioner’s proposed development requirements for the Edwards Aquifer Recharge Zone, consisting of a 45% impervious cover limitation and a minimum requirement of 14 acres of park and recreation area, are adequate for its protection. Alternatives remain including conservation subdivision design (specifically called for in our comprehensive plan) which would allow the smaller lots with open space weaved throughout, impervious cover limitation of 25% to 30%, and/or placing the larger of the development’s lots over the Recharge Zone portion of their property.
One of the concerns about package treatment plants for sewage is their long-term maintenance. The complexity and cost is larger than typical HOAs can afford. And when they fail, the nearest utility provider or the city is mandated by the state to take them over. This is why staff recommends standards and a long-term maintenance plan be approved by the respective utility provider. Rather than the petitioner meeting CCSUD’s standards for a package treatment plant for wastewater, they propose an unnamed retail wastewater service provider will operate and maintain the facility. Recognizing the petitioner is still working to secure a provider, staff is comfortable with this alternative, with some additional clarifying language on who will approve or adopt that long-term maintenance plan.
Below are applicable guidelines in Envision New Braunfels, our Comprehensive Plan, which development should advance:
• 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 Hoffman Lane Sub-Area which is identified for conservation communities focused around maintaining and enhancing ecological integrity while allowing some level of development to occur.
FISCAL IMPACT:
When the package treatment plant fails, the state will require either a local utility provider or the City to assume responsibility for the sewer infrastructure.
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 the MUD after expiration of the MUD, the City would assume roadway and public infrastructure maintenance, and provide City services to the new City residents.
Recommendation
RECOMMENDATION:
Most of the petitioner’s alternatives are agreeable to staff and would advance Envision New Braunfels. However, staff has to recommend denial at present, but could support consent to the creation of the MUD if the petitioner will amend the draft development agreement to:
1. Address Edwards Aquifer Recharge protection through any or a mix of the following:
a. Limit impervious cover to 25% to 30% over the Recharge Zone;
b. Situate the largest of the proposed mix of lots over the Recharge Zone;
c. Design the layout of the area over the Recharge Zone in a conservation subdivision design; and/or
d. Increase the number of acres to be set aside over the recharge zone for park and recreation or open space.
2. Accept the language pertaining to building permits and inspections as drafted by staff. (City Council may consider allowing city staff and the petitioner to negotiate terms for “prairie building” of model homes prior to final recordation of the development agreement).
These changes, along with the other alternatives proposed by the petitioner, would be consistent with and would implement Envision New Braunfels, and prevent an undesirable development pattern in the ETJ.
*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 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>