2025-069 WQ Permit Protest September 05,2025 Report No. 2025-069
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
On July 24, 2025, Denton Water Utilities filed comments with the Texas Commission on
Environmental Quality (TCEQ) regarding two proposed Texas Pollutant Discharge Elimination
System("TPDES")permit applications submitted by outside entities.
EXECUTIVE SUMMARY:
A TPDES permit authorizes a person or entity to discharge wastewater into waters of the state. On
Jan. 7, 2025, the City Council authorized the City Manager or their designee to protest TPDES
permit applications filed with TCEQ that seek to discharge treated wastewater into Denton
watersheds(Ordinance No.24-2480). Protesting the applications and associated proposed permits
is intended to safeguard water quality and to protect the City's interests related to wastewater
regionalization.
DISCUSSION:
The protested TPDES permits are WQ0016632001, filed by 636 Denton Dev Company, LLC for
"Sundance," and WQ0016624001, filed by Sanger Laguna Azure, LLC and James Horn. The
attached Notices of Protest include the City's comments, which outline the concerns and bases
for the protest. Water Utilities staff are available to address any questions.
ATTACHMENTS:
1. Notice of Protest WQ0016632001
2. Notice of Protest WQ0016624001
STAFF CONTACT:
Stephen Gay
General Manager of Water Utilities and Street Operations
Stephen.gay@cityofdenton.com
(940) 349-8086
I
F
Denton Water Utilities
DENTON 901-A Texas St., Denton, TX 76209 • (940) 349-8086
July 23, 2025
Ms. Laurie Gharis, Chief Clerk
Texas Commission on Environmental Quality
Office of the Chief Clerk, MC-105
P.O. Box 13087
Austin, Texas 78711-30871
Via First Class Mail and Electronic Filing
Re: City of Denton Comments and Request for Contested Case Hearing on Texas Pollution
Discharge Elimination Permit Application No. WQ0016632001; Applicant, 636 Denton Dev
Company, LLC
Dear Ms. Gharis.
Please accept these comments and request for contested case hearing ("Comment Letter")
timely filed on behalf of the City of Denton, Texas. ("Denton" or "City"). Denton respectfully
submits the following comments regarding proposed permit No. WQ0016632001 and the
associated application filed by 636 Denton Dev Company, LLC ("636" or "Applicant") on
September 24, 2024 ("Application"). The City submits its comments in accordance with Chapter
5. Subchapter M and Section 26.028 of the Texas Water Code and Title 30, Chapter 55 of the
Texas Administrative Code. The City requests a contested case hearing regarding the Application
and proposed permit number WQ0016632001.
L BACKGROUND
Denton is a Texas home-rule municipality and a Retail Public Utility that provides water service
to approximately 158,349 Texans within its City limits and many others throughout its service area
and surrounding areas in Denton County.. The City possesses Certificates of Convenience and
Necessity Nos. 10195 (Water) and 20072 (Wastewater) issued by the Public Utility Commission
of Texas. The City also holds Texas Pollution Discharge Elimination System ("TPDES"), Permit
Nos. WQ0010027003 and WQ0014416001 and Certificates of Adjudication Nos. 08-2348 and 08-
2335,which authorize the City to appropriate surface water from Lewisville Lake and Ray Roberts
Lake, respectively. WQ0014416001 is associated with Clear Creek Water Reclamation Plant, a
future City facility that will discharge into Clear Creek and that is located on property along the
OUR CORE VALUES
Inclusion • Collaboration • Quality Service • Strategic Focus • Fiscal Responsibility
ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 2
path of the proposed discharge.' The Elm Fork Trinity River passes through the City's ETJ and
connects Ray Roberts Lake and Lewisville Lake. Additionally, several noteworthy creeks run
through the City and/or its ETJ—Clear Creek, Moores Branch, Pecan Creek, and Hickory Creek.
All these creeks carry flows that eventually enter Lewisville Lake where the City possess water
rights.
Denton adopted a new Wastewater Master Plan ("WMP") in 2024. The City uses the WMP as
a planning tool to address rapid population growth and increased development in the City and the
region. The WMP is intended to assist the City with its efforts to ensure efficient and sustainable
management of wastewater, protect public health and safety, and construct wastewater treatment
and conveyance infrastructure needed for the population growth projected over the next 25 years.
Applicant filed the Application on September 24, 2024. The Notice of Receipt and Intent to
Obtain a Permit ("NORI"), issued on October 18, 2024, characterizes the proposed permit as
follows:
[T]o authorize the discharge of treated wastewater at a volume not to exceed a daily
average flow of 480,000 gallons per day. The domestic wastewater
treatment facility will be located approximately 3,400 feet northwest of the
intersection of Farm-to- Market Road 2164 and Milam Road East, near the city of
Denton,in Denton County,Texas 76207. The discharge route will be from the plant
site to an unnamed tributary of Moores Branch; thence to Moores Branch; thence
to Clear Creek; thence to Lewisville Lake.
Notably, the proposed facility is in the City's ETJ and CCN. The Executive Director issued a
Notice of Application and Preliminary Decision ("NAPD") on June 26, 2025.
II. PUBLIC COMMENTS
At this time, the City of Denton contends that the Application should be denied, and the
proposed permit should not be granted because:
A. The proposed permit is not protective of water quality;
B. The Applicant has failed to meaningfully consider regionalization under state law;
C. The Applicant has not demonstrated its need for the proposed permit; and
D. The Applicant has failed to satisfy the public involvement plan requirements.
A. The proposed permit is not protective of water quality.
The City is concerned the proposed permit will not be protective of water quality.2 Under the
proposed permit and in the proposed facility's final phase, the Applicant would discharge 0.48
1 The facility is currently permitted for discharge of treated domestic wastewater at a daily average flow not to
exceed 950,000 gallons per day.A permit amendment is pending that,if granted,would allow the City to increase its
permitted discharge of treated domestic wastewater to a volume not to exceed an annual average flow of 10,000,000
gallons per day.
2 See TEx.WATER CODE §26.003.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQOO16632OO1
July 23, 2025
Page 3
MGD with no total phosphorous limit.3 This unlimited additional loading of phosphorous into
Moores Branch, Clear Creek, and Lewisville Lake may pose a threat to water quality. The water
bodies at issue are high-quality and require careful consideration. Clear Creek (Segment O823C)
classified High Aquatic Life Use, is impaired, and is on the Texas 3O3(d) list for bacteria.4 Moores
Branch is classified High Aquatic Life Use. Lewisville Lake (Segment 0823) is located
immediately downstream of the Elm Fork Trinity River and is classified High Aquatic Life Use,
Public Water Supply, and Primary Contact Recreation.5 Given the documented attributes of the
water bodies along the discharge path and Lewisville Lake's status as a source of drinking water
for Denton,Dallas, and the region,the City contends that there should be a total phosphorous limit
in the proposed permit to prevent a lowering of water quality. The TCEQ should not issue a permit
without said limit.
The NAPD states that an antidegradation review of the receiving waters has preliminarily
determined that,
[E]xisting water quality uses will not be impaired by this permit action. Numerical
and narrative criteria to protect existing uses will be maintained. A Tier 2 review
has preliminarily determined that no significant degradation of water quality is
expected in Moores Branch and Clear Creek, which have been identified as having
high aquatic life use. (emphasis added)
The City disputes this assessment due to the lack of a phosphorous limit and the uses and
characteristics of the receiving waters described above.The City also disagrees with the Executive
Director's description of the Tier 2 standard. "Significant degradation" is not the standard
articulated in the TCEQ's rules.6 Rather, the rules do not allow any degradation of waters, with
degradation being defined as, "a lowering of water quality by more than a de minimis extent, but
not to the extent that an existing use is impaired."' Thus, as a threshold matter, any degradation,
whether significant or not, is prohibited under TCEQ rules.
The City also notes that there is an aggregate effect that should be considered when it comes to
this Application and other pending applications that seek to discharge wastewater into the water
bodies stated above. As of the date of this Comment Letter, multiple applications exist for
wastewater treatment plants discharging less than 1 MGD into Denton watersheds. All these
applications would discharge effluent into Lewisville Lake,resulting in multiple loads of less than
1 MGD. Together they represent a significant loading of pollutants into the Clear Creek and
Lewisville Lake.
s Technical Package at 17.
a 2024 Texas Integrated Report-Texas 303(d)List(Category 5)(Nov. 13,2024)at 16.
5 30 TEX.ADMIN.CODE § 307.10 Appendix A.The NAPD erroneously states that the Segment No. is 0832,which is
the number assigned to Lake Weatherford,not Lewisville Lake.
6 30 TEX.ADMIN.CODE § 307.5(b)(2).
Id.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 4
Finally, the City contends that the Applicant's package plant is not likely able to treat and
manage PFAS and other emerging contaminants that require advanced treatment. Treatment
technologies needed to address these contaminants in the long term can be better implemented and
financed by existing wastewater systems with better financial and technical capabilities.$ For these
reasons, the Application should be denied, and the proposed permit should not be granted.
B. The Applicant failed to meaningfully consider regionalization under state law.
The Texas Constitution declares that there is a state policy to encourage development of
regional wastewater systems.' Similarly, the Legislature has found that it is "necessary to the
health, safety, and welfare of the people of this state to implement the state policy to encourage
and promote the development and use of regional and area-wide waste collection, treatment, and
disposal systems to serve the waste disposal needs of the citizens of the state and to prevent
pollution and maintain and enhance the quality of the water in the state."10 TCEQ is charged with
implementing this policy and may deny a proposed permit based on consideration of need,
"including the expected volume and quality of the influent and the availability of existing or
proposed areawide or regional waste collection, treatment, and disposal systems."11
Meaningful and substantive consideration of regionalization is vital to the prosperity of the
cities and communities surrounding proposed facilities. As TCEQ's Regionalization Policy
observes,
Regionalization promotes a long-term solution to wastewater management by
consolidating wastewater collection, treatment, and disposal into larger service
providers. Typically, existing systems with sufficient treatment capacity can offer
wastewater treatment and disposal at a lower cost than constructing, operating, and
maintaining a stand-alone system. Regional systems can distribute costs for capital
improvement projects, like upgrades and repairs, over a larger customer base.1z
Regionalization is good for customers as it spreads out long term costs, good for the
environment due to the ability of larger systems to employ advanced treatment technologies, and
good for water supply planning as it facilitates reuse projects and more efficiently distributes
regional water supplies.13 Promotion and encouragement of regional systems requires more than a
thoughtless and rushed exercise to check boxes. Otherwise,the state's Regionalization policy is a
goal without a compass or map to achieve it and the Texans who depend on thoughtful regional
water and wastewater planning are lost.
s See the City's discussion of regionalization below.
9 TEX.CONST.ART. III, §49-d.
to TEX.WATER CODE§26.081(a).See also,TEX.WATER CODE §26.003.
tt TEX.WATER CODE §26.0282.
12 Tex. Comm'n on Envt'l Quality,Evaluating Regionalization for Proposed Wastewater Systems(Water Quality
Division RG-632)(August 2023)at 3. Hereinafter referred to as"Regionalization Policy".
13 The City is concerned that package plants, like the one proposed,are ill-equipped to treat for PFAS and emerging
contaminants.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 5
The Applicant has not meaningfully and substantively considered regionalization,nor have they
provided the information required by the application. TCEQ's Regionalization Policy states "[i]f
your proposed facility is within a three-mile radius of a permitted domestic wastewater system or
a portion of your service area is within another utility's sewer CCN area,you must request service
from the existing permitted system owner or operator."14 The request for service must include, the
"proposed facility's capacity, an inquiry for the total cost to connect to their sewer system and
providing sewer services, as well as any additional conditions for receiving service. 15 The
Applicant marked"Yes"in the application when asked whether any portion of its proposed service
area is located within another utility's CCN.16 This is accurate because the proposed facility is
located within Denton's sewer CCN (No. 20072). 17 However, the Application does not
demonstrate whether the Applicant requested service or received a response. Denton did not
receive the service request required by the Application and Regionalization Policy.The application
also requires applicants whose proposed service area is located in another utility's CCN"to attach
a justification for the proposed facility and a cost analysis of expenditures that includes the cost of
connecting to the CCN facilities versus the cost of the proposed facility or expansion."" The
Applicant did not include the cost analysis in its application. Instead,the Applicant states,without
detail, that, "Construction of a connection to, and the expansion of, the existing City of Denton or
City of Sanger systems is anticipated to be more costly than construction of a new wastewater
treatment facility."19 This overbroad justification is insufficient.
The Applicant marked "Yes" on the Application when asked if there were any domestic
permitted facilities or collection systems within a three-mile radius of the proposed facility.20 In
that case,the application requires the Applicant to "attach proof of mailing a request for service to
each facility and collection system,the letters requesting service, and correspondence from each
facility and collection system."21 Again, the Applicant failed to provide any proof of mailing of
service requests or a response. Denton has not received a mailed request for service, despite the
City having a collection system within three (3) miles of the proposed facility.22
The City of Denton is willing to discuss service, especially given the City's plans for the Clear
Creek Water Reclamation Plant,a facility that is located on property along the path of the proposed
discharge. For these reasons, the Application should be denied, and the proposed permit should
not be granted.
C. The Applicant has not demonstrated its need for the proposed permit.
i
1
i
' Regionalization Policy at 4.
Id.
16 Admin. Packet at 84.
"Id. at 105.The Applicant's map acknowledges this fact.
'$Id. at 84-85.See also Application Instructions at 56.
19 Admin. Packet at 106.
20 Id. at 85 and 105.
21 Id. (emphasis added).
12 See Exhibit"A"attached hereto.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 6
The Applicant states in the Application, "[t]he land with the proposed plant service area,
approximately 633 acres in total, is in the process of being platted with Denton County. The area
served by the proposed plant will consist primarily of single-family residential with a smaller
portion of mixed commercial land use."23 The Applicant also provides an assumed number of
EDUs to calculate flows, but without providing the basis or foundation of its assumption. This
justification is insufficient.Technical Report 1.1 requires"a detailed discussion regarding the need
for any phase(s) not currently permitted. ,24 Moreover, the Application Instructions require the
Applicant to provide a justification.25 For example, applicants are required to provide, "an
anticipated construction start date and operation schedule for each phase being proposed,"the size
of the development (number of lots)", "the date construction on the development is scheduled to
begin," and "the anticipated growth rate of the development (number of houses per month or
26
Year)•" Most notably, the Application Instructions state that applicants should
Attach population estimates and/or projections used to derive the flow estimates
and anticipated growth rates for developments. Provide the source and basis upon
which population figures were derived (census and/or other methodology). Also,
provide population projections at the end of the design life of the treatment facility
(usually 50+ years) and the source and basis upon which population figures were
derived.27
None of the more detailed information (E.g., schedules, number of lots, or population
projections and sources) mentioned above is provided by the Applicant. The Applicant is told in
the Application and the Application Instructions that the Executive Director may recommend
denial if insufficient information is provided.28 Without this information,how can the ED evaluate
need in accordance with the Texas Water Code?29 More is needed before the Commission should
grant the proposed permit, especially given the concerns raised above in Sections A and B of this
Comment Letter and the ability and/or willingness of other systems to serve the area associated
with the Application.Because the Applicant has failed to demonstrate need,the Application should
be denied, and the proposed permit should not be granted.
D. The Applicant has failed to satisfy the public involvement plan requirements.
In the Public Involvement Plan Form for Permit and Registration Applications, the Applicant
states it does not anticipate any significant public interest in the application.30 However, given the
proximity of the proposed discharge to Denton(it is in the City's ETJ) and the discharge route,the
Applicant knows or should have known there would be significant public interest. The discharge
will travel into Lewisville Lake, a drinking water supply for approximately 3 million people,
23 Admin. Package at 84.
24 Id.
2s Application Instructions at 55.
26 Id.
27 Id.
2'Admin. Package at 53 and Application Instructions at 55.
29 TEX.WATER CODE §26.0282.
30 Admin. Package at 42-43.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 7
including Denton and Dallas and their respective wholesale customers. The Applicant states that
the site is in a rural part of Denton County, but the discharge will travel through populated areas
within Denton.31 The form is incomplete and additional outreach should be required. For these
reasons, the Application should be denied, and the proposed permit should not be granted.
III. REQUEST FOR CONTESTED CASE HEARING
I, on behalf of the City of Denton, respectfully request a contested case hearing to address the
issues raised in this Comment Letter with respect to the Application and proposed permit number
WQ0016632001.
IV. DESCRIPTION OF AFFECTED PERSON STATUS
The City is an affected person for several reasons. Pursuant to TEx. WATER CODE § 5.115 and
30 TEx.ADMIN. CODE § 55.203, "an affected person is one who has a personal justiciable interest
related to a legal right, duty, privilege, power, or economic interest affected by the application."32
Interests common to the members of the general public do not qualify.33 Governmental entities,
like the City,with"authority under state law over issues raised by [an] application,"can be affected
persons.34 Among other relevant factors, in assessing whether to grant affected person status, the
TCEQ may consider:
1. Whether the interest claimed is one protected by the law under which the
application will be considered;
2. Distance restrictions or other limitations imposed by law on the affected interest;
3. Whether a reasonable relationship exists between the interest claimed and the
activity regulated;
4. Likely impact of the regulated activity on the health and safety of the person, and
on the use of property of the person;
5. Likely impact of the regulated activity on use of the impacted natural resource
by the person;
6. For a hearing request on an application filed on or after September 1, 2015,
whether the requestor timely submitted comments on the application that were not
withdrawn; and
7. For governmental entities, their statutory authority over or interest in the issues
relevant to the application.35
31 Id. at 42.
32 30 TEX.ADMIN.CODE § 55.203.
33 Id.
34 Id.
35 Id.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 8
The TCEQ may also consider, "the merits of the underlying application and supporting
documentation in the commission's administrative record, including whether the application meets
the requirements for permit issuance."36
As stated in the Background section of this Comment Letter, Denton is a Retail Public Utility
that serves approximately 158,349 Texans within its city limits and many others in its service area
and surrounding portions of Denton County. Denton is a holder of water rights to appropriate
Waters of the State stored in Lewisville Lake. The proposed discharge enters waters that flow
through the City's ETJ, through its City limits, and eventually into Lewisville Lake. The Facility
and its service area is located in Denton's ETJ and its CCN(No. 20072) The City's CCN and ETJ
provide it with statutory authority over wastewater service and other issues relevant to the
Application.37 Therefore, the City, a governmental entity, has interests not common to members
of the public, has interests protected by state law related to its water rights and CCN, and has a
statutory interest over or interest in the issues relevant to the Application, including retail
wastewater service.
Any adverse impact on water quality associated with the proposed discharge could negatively
impact Denton's diversion of water from Lewisville Lake both from a financial and technical
perspective. As a home- rule municipality, Denton has an interest in and the authority to protect
its customers and public health and safety within its jurisdictional boundaries, including its
extraterritorial jurisdiction.3 8 Also, as a provider of water and wastewater service inside and
outside its corporate limits,the City has an interest in ensuring orderly development using regional
and area-wide wastewater disposal systems.39 A portion of Denton's wastewater collection system
is within(3)miles of the proposed facility and the City is capable of treating the wastewater flows
contemplated by the Application.40 The discharge proposed by the Application may adversely
affect waters within the City and/or its jurisdictional boundaries. Specifically,the City is concerned
that the proposed discharge will degrade water quality thereby impacting the municipal,
environmental, and recreational uses of waters in the City and in Lewisville Lake, adversely
affecting the City's efforts to manage stormwater, and increasing the cost of service to the City's
customers.
The City contends that a contested case hearing is necessary to ensure that the Application and
associated discharge will comply with state and federal law and will not negatively impact the
City,its residents, its ETJ, and its neighbors. An evidentiary hearing with sworn testimony in front
of a neutral fact finder is essential to ensure that the Application conforms with state and federal
law.
V.ADDITION TO THE MAILING LIST AND CORRESPONDENCE
36 Id.
37 See TEx.WATER CODE Ch. 13, Subchapter G and infra note 38.
38 See TEx.Loc.GOVT CODE §§42.001,54.004,212.003,212.044,and 242.001.
39 See TEx.WATER CODE §26.081(a).
41 See Exhibit"A"attached hereto.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016632001
July 23, 2025
Page 9
In accordance with Title 30, Chapter 55 of the Texas Administrative Code, please add the
following contacts to your official mailing list for this matter:
Stephen Gay, General Manager of Water Utilities and Street Operations
City of Denton
901-A Texas Street
Denton, TX 76209
(940) 349-8086
Mack Reinwand, City Attorney
City of Denton
215 E. McKinney St.
Denton, TX 76201
(940) 349-8333
Please send all future correspondence to me using the address and telephone number provided
above.
VI. CONCLUSION
Denton respectfully submits these comments for consideration by the Executive Director and
requests a contested case hearing regarding this matter. For the reasons stated above in the City's
comments, the Application does not meet the requirements for permit approval, the Application
should be denied, and the proposed permit should not be granted.
If you hav luestions or need any additional information, please feel free to contact me.
Si erely,
phen Gay
General Manager, Water Utilities and Street Operations
Copy: Sara Hensley, City Manager
Mack Reinwand, City Attorney
Enclosures
Exhibit A
Facility Map
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2.42 mi- - - 2.67mi 1- -I -- - - - - --
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Proposed Sundance 5-Year CIP Projects L
Outfall — Proposed Sewer Line L/
O 3-Mile Buffer From
Outfall 10-Year CIP Projects
I_ City Limits Proposed Sewer Line
Q Denton ETJ Lift Stations _-
1_ 7 Denton Sewer CCN ■ City of Denton
Distance from Outfall o Private I I J
Existing Sewer Line f
I r-?""tl -60�101,1 +I
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0 0.4 0.8 1.6
DENTON Miles
CITY
OF Denton Water Utilities
DENTON 901-A Texas St., Denton, TX 76209 • (940) 349-8086
July, 23, 2025
Ms. Laurie Gharis, Chief Clerk
Texas Commission on Environmental Quality
Office of the Chief Clerk, MC-105
P.O. Box 13087
Austin, Texas 78711-30871
Via First Class Mail and Electronic Filing
Re: City of Denton Comments and Request for Contested Case Hearing on Texas Pollution
Discharge Elimination Permit Application No. WQ0016624001;Applicants Sanger Laguna Azure
LLC and James N. Horn
Dear Ms. Gharis,
Please accept these comments and request for contested case hearing ("Comment Letter")
timely filed on behalf of the City of Denton, Texas. ("Denton" or "City"). Denton respectfully
submits the following comments regarding proposed permit No. WQ0016624001 and the
associated application filed by Sanger Laguna Azure LLC ("Sanger Laguna Azure")and James N.
Horn ("Mr. Horn") on September 16, 2024 ("Application"). The City submits its comments in
accordance with Chapter 5, Subchapter M and Section 26.028 of the Texas Water Code and Title
30, Chapter 55 of the Texas Administrative Code. The City requests a contested case hearing
regarding the Application and proposed permit number WQ0016624001.
L BACKGROUND
Denton is a Texas home-rule municipality and Retail Public Utility that provides water service
to approximately 158,349 Texans within its City limits and many others throughout its service area
and surrounding areas in Denton County. The City possesses Certificates of Convenience and
Necessity Nos. 10195 (Water) and 20072 (Wastewater) issued by the Public Utility Commission
of Texas. The City also holds Texas Pollution Discharge Elimination System ("TPDES"), Permit
Nos. WQ0010027003 and WQ0014416001 and Certificates of Adjudication Nos. 08-2348 and 08-
2335, which authorize the City to appropriate surface water from Lewisville Lake and Ray Roberts
Lake. respectively. WQ0014416001 is associated with Clear Creek Water Reclamation Plant. a
future City facility that will discharge into Clear Creek and that is located on property along the
OUR CORE VALUES
Inclusion • Collaboration • Quality Service • Strategic Focus • Fiscal Responsibility
ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 2
path of the proposed discharge.' The Elm Fork Trinity River passes through the City's ETJ and
connects Ray Roberts Lake and Lewisville Lake. Additionally, several noteworthy creeks run
through the City and/or its ETJ— Clear Creek, Pecan Creek, and Hickory Creek. All these creeks
carry flows that eventually enter Lewisville Lake where the City possess water rights.
Denton adopted a new Wastewater Master Plan ("WMP") in 2024. The City uses the WMP as
a planning tool to address rapid population growth and increased development in the City and the
region. The WMP is intended to assist the City with its efforts to ensure efficient and sustainable
management of wastewater, protect public health and safety, and construct wastewater treatment
and conveyance infrastructure needed for the population growth projected over the next 25 years.
Sanger Laguna Azure and Mr. Horn (Collectively, "Applicants") filed the Application on
September 16, 2024. The Notice of Receipt and Intent to Obtain a Permit ("NORI"), issued on
October 9, 2024, characterizes the proposed permit as follows:
[T]o authorize the discharge of treated wastewater at a volume not to exceed a
daily average flow of 950,000 gallons per day. The domestic wastewater treatment
facility will be located approximately 0.77 miles northwest of the intersection of
Farm-to-Market Road 2153 and Farm-to-Market Road 2164, near the city of
Sanger, in Denton County, Texas 76266. The discharge route will be from the
plant site to an unnamed tributary,thence to another unnamed tributary, thence to
Clear Creek, thence to Elm Fork Trinity River.
On July 1, 2025, the Executive Director scheduled a public meeting and issued a Notice of
Application and Preliminary Decision("NAPD") and draft permit. The City reserves its right to
supplement and/or amend this Comment Letter to address any issues it identifies after the public
meet.
II. PUBLIC COMMENTS
At this time, the City of Denton contends that the Application should be denied, and the
proposed permit should not be granted because:
A. The proposed permit is not protective of water quality;
B. The Applicants have failed to meaningfully consider regionalization under state law;
C. The Applicants have not demonstrated their need for the proposed permit;
D. The Applicants have failed to satisfy the public involvement plan requirements;
E. The Applicants have failed to meet the sludge and biosolids management and disposal
requirements; and
F. Notice is defective.
'See Exhibit"A",attached hereto. The facility is currently permitted for discharge of treated domestic wastewater at
a daily average flow not to exceed 950,000 gallons per day.A permit amendment is pending that, if granted,would
allow the City to increase its permitted discharge of treated domestic wastewater to a volume not to exceed an
annual average flow of 10,000,000 gallons per day.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 3
A. The proposed permit is not protective of water quality.
The City is concerned the proposed permit will not be protective of water quality.2 In the
proposed facility's final phase, the Applicant would discharge 0.95 MGD with no total
phosphorous limit.3 This unlimited additional loading of phosphorous into Clear Creek, Elm Fork
Trinity River, and Lewisville Lake may pose a threat to water quality. The water bodies at issue
are high-quality and require careful consideration. Clear Creek (Segment 0823C) classified High
Aquatic Life use, is impaired, and is on the Texas 303(d) list for bacteria.4 The Elm Form Trinity
River (Segment 0839) is classified High Aquatic Life Use and Primary Contact Recreation.5
Lewisville Lake(Segment 0823)is located immediately downstream of the Elm Fork Trinity River
and is classified High Aquatic Life Use, Public Water Supply, and Primary Contact Recreation.6
Given the documented attributes of the water bodies along the discharge path and Lewisville
Lake's status as a source of drinking water for Denton, Dallas, and the region, the City contends
that there should be a total phosphorous limit in the proposed permit to prevent a lowering of water
quality. The TCEQ should not issue a permit without said limit.
The NAPD states that an antidegradation review of the receiving waters has preliminarily
determined that,
[E]xisting water quality uses will not be impaired by this permit action. Numerical
and narrative criteria to protect existing uses will be maintained. A Tier 2 review
has preliminarily determined that no significant degradation of water quality is
expected in Clear Creek,which has been identified as having high aquatic life uses.
Existing uses will be maintained and protected. (emphasis added)
The City disputes this assessment due to the lack of a phosphorous limit and the uses
and characteristics of the receiving waters described above. The City also disagrees with
the Executive Director's description of the Tier 2 standard. "Significant degradation"is not
the standard articulated in the TCEQ's rules. ' Rather, the rules do not allow any
degradation of waters, with degradation being defined as, "a lowering of water quality by
more than a de minimis extent,but not to the extent that an existing use is impaired. ,8 Thus,
as a threshold matter, any degradation, whether significant or not, is prohibited under
TCEQ rules.
The City also notes that there is an aggregate effect that should be considered when it comes to
this Application and other pending applications that seek to discharge wastewater into the water
bodies stated above. As of the date of this Comment Letter, multiple applications exist for
wastewater treatment plants discharging less than 1 MGD into Denton watersheds. All these
2 see TEX. WATER CODE §26.003.
3 Admin. Package at 36 and 56.
12024 Texas Integrated Report-Texas 303(d)List(Category 5)(Nov. 13,2024)at 16.
5 30 TEX.ADMIN.CODE § 3 07.10 Appendix A.
61d.
30 TEX.ADMIN.CODE §307.5(b)(2).
8 Id.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 4
applications would discharge effluent into Lewisville Lake,resulting in multiple loads of less than
1 MGD. Together they represent a significant loading of pollutants into the receiving waters.
Finally, the City contends that the Applicant's package plant is not likely able to treat and
manage PFAS and other emerging contaminants that require advanced treatment. Treatment
technologies needed to address these contaminants in the long term can be better implemented and
financed by existing wastewater systems with better financial and technical capabilities.9 For these
reasons, the Application should be denied, and the proposed permit should not be granted.
B. The Applicants have failed to meaningfully consider regionalization under state law.
The Texas Constitution declares that there is a state policy to encourage development of
regional wastewater systems.10 Similarly, the Legislature has found that it is "necessary to the
health, safety, and welfare of the people of this state to implement the state policy to encourage
and promote the development and use of regional and area-wide waste collection, treatment, and
disposal systems to serve the waste disposal needs of the citizens of the state and to prevent
pollution and maintain and enhance the quality of the water in the state."'1 TCEQ is charged with
implementing this policy and may deny a proposed permit based on consideration of need,
"including the expected volume and quality of the influent and the availability of existing or
proposed areawide or regional waste collection, treatment, and disposal systems."12
Meaningful and substantive consideration of regionalization is vital to the prosperity of the
cities and communities surrounding proposed facilities. As TCEQ's Regionalization Policy
observes,
Regionalization promotes a long-term solution to wastewater management by
consolidating wastewater collection, treatment, and disposal into larger service
providers. Typically, existing systems with sufficient treatment capacity can offer
wastewater treatment and disposal at a lower cost than constructing, operating, and
maintaining a stand-alone system. Regional systems can distribute costs for capital
improvement projects, like upgrades and repairs, over a larger customer base.13
Regionalization is good for customers as it spreads out long term costs, good for the
environment due to the ability of larger systems to employ advanced treatment technologies, and
good for water supply planning as it facilitates reuse projects and more efficiently distributes
regional water supplies.14 Promotion and encouragement of regional systems requires more than a
thoughtless and rushed exercise to check boxes. Otherwise, the state's Regionalization policy is a
9 Admin. Package at 94.See also the City's discussion of regionalization below.
10 TEX.CONST.ART. III, §49-d.
'1 TEX.WATER CODE§26.081(a).See also,TEX.WATER CODE §26,003,
12 TEX.WATER CODE §26.0282.
13 Tex. Comm'n On Envt'1 Quality,Evaluating Regionalization for Proposed Wastewater Systems(Water Quality
Division RG-632)(August 2023)at 3. Hereinafter referred to as'`Regionalization Policy".
"The City is concerned that package plants, like the one proposed,are ill-equipped to treat for PFAS and emerging
contaminants.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 5
goal without a compass or map to achieve it and the Texans who depend on thoughtful regional
water and wastewater planning are lost.
The Applicants have not meaningfully and substantively considered regionalization, nor have
they provided the information required by the application. TCEQ's Regionalization Policy states
that a request for service must include, the "proposed facility's capacity, an inquiry for the total
cost to connect to their sewer system and providing sewer services, as well as any additional
conditions for receiving service."15 The request letters provided in the Application do not ask for
any information regarding costs or inquire as to service conditions.16 The Application also does
not demonstrate whether the Applicants received a response. How could it, though? The
Application was filed on September 16, 2024, and the letters are dated September 12, 2024. That
is a short period of time to have any meaningful correspondence with Sanger and Denton or to
conduct any sort of meaningful analysis.17 The Applicants marked"Yes"on the Application when
asked if there were any domestic permitted facilities or collection systems within a three-mile
radius of the proposed facility.18 In that case, the application requires the Applicants to "attach
proof of mailing a request for service to each facility and collection system, the letters requesting
service, and correspondence from each facility and collection system."19 Again, the Applicants
failed to provide any proof of response to their letters.20
Domestic Wastewater Permit Application Technical Report 1.1 asks whether any part of the
proposed service area is within the Certificate of Convenience and Necessity ("CCN'') of another
utility.21 If so, the application requires applicants"to attach a justification for the proposed facility
and a cost analysis of expenditures that includes the cost of connecting to the CCN facilities versus
the cost of the proposed facility or expansion."22 The proposed service area is located with the City
of Sanger's Certificate of Convenience and Necessity No. 20073. Denton's Sewer CCN is within
a three-mile radius of the proposed facility and is directly adjacent to Sanger's CCN. The
Applicants acknowledge these facts in the Application.2'However, they did not include the cost
analysis. Instead, they state, without detail, that "[c]onstruction of a connection to the city's
existing system is anticipated to be more costly than construction of a new wastewater treatment
facility."24 This broad justification lacks detail and is insufficient. The City of Denton is willing to
discuss service, especially given the City's plans for the Clear Creek Water Reclamation Plant, a
facility that will be located on property less than six(6)miles away from and along the path of the
is Regionalization Policy at 4.
16 Admin. Package at 101-102.See also example letter in Tex. Comm'n On Envt'l Quality, Instructions For
Completing The Domestic Wastewater Permit Application(TCEQ-10053ins)at 115(Oct. 17,2024). Hereinafter
referred to as"Application Instructions".
"Admin. Package at 101-102.
'$Id.at 54.
19 Id.(emphasis added).
20 Admin. Package at 101-102
'' Admin. Package at 53.
22 Admin. Package at 54. See also Application Instructions at 56.
zs Admin. Package at 100.
24 Id.at 112.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 6
proposed discharge.2' Additionally, pursuant to its capital improvement plan and WMP, the City
will construct two lines within 5 miles of the proposed discharge.26 The City is already engaged in
land acquisition and design for one of these lines (a gravity main) that will be constructed within
three years and approximately 4 miles from the proposed discharge. However, the Applicant has
not approached Denton for any substantive discussions that demonstrate the Applicant's serious
consideration of connection to the City's system. For these reasons, the Application should be
denied, and the proposed permit should not be granted.
C. The Applicants have not demonstrated their need for the proposed permit.
The Applicants state in the Application, without detail, "[t]his permit is needed for the new
wastewater treatment facility that will serve the proposed Sanger Laguna Azure residential
development."27 The Applicants provide no other information or details to support this claim.
Instead,the Applicants provide a sentence with circular reasoning.28 Technical Report 1.1 requires
"a detailed discussion regarding the need for any phase(s) not currently permitted. ,29 Moreover,
the Application Instructions require the Applicants to provide a justification.30 For example,
applicants are required to provide, "an anticipated construction start date and operation schedule
for each phase being proposed," the size of the development (number of lots)", "the date
construction on the development is scheduled to begin," and "the anticipated growth rate of the
development(number of houses per month or year)."31 Most notably,the Application Instructions
state that the applicants should,
Attach population estimates and/or projections used to derive the flow estimates
and anticipated growth rates for developments. Provide the source and basis upon
which population figures were derived (census and/or other methodology). Also,
provide population projections at the end of the design life of the treatment facility
(usually 50+ years) and the source and basis upon which population figures were
derived.32
The Applicants are told in the Application and the Application Instructions that the Executive
Director may recommend denial if insufficient information is provided. 33 Without this
information, how can the ED evaluate need in accordance with the Texas Water Code?34 More is
needed before the Commission should grant the proposed permit, especially given the concerns
raised above in Sections A and B of this Comment Letter and the ability and/or willingness of
21 See Exhibit"A"attached hereto.
26 Id.A line will be constructed approximately 4 miles away and a second line with be constructed less than a half a
mile away.
27 Admin. Package at 53.
'-8 I.e.,"this permit is needed because it is needed."
29 Admin. Package at 53.
31 Application Instructions at 55.
3' Id.
32 Id.
33 Admin. Package at 53 and Application Instructions at 55.
34 TEX.WATER CODE §26.0282.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 7
other systems to serve the area associated with the Application. Because the Applicants have failed
to demonstrate need, the Application should be denied, and the proposed permit should not be
granted.
D. The Applicants have failed to satisfy the public involvement plan requirements.
In the Public Involvement Plan Form for Permit and Registration Applications, the Applicants
state they do not anticipate any significant public interest in the Application.35 However, given the
proximity of the proposed discharge to Denton and the City of Sanger and the discharge route, the
Applicants knew or should have known there would be significant public interest. The discharge
will travel into Lewisville Lake, a drinking water supply for approximately 3 million people,
including Denton and Dallas and their respective wholesale customers. The City of Denton is a
wholesale water supplier to Upper Trinity Regional Water District who sells water it receives from
Denton to Sanger. The Applicants' affected landowner map and list indicate there are twenty-three
(22) affected landowners.36 Also, Mr. Horn has owned the property in this area for quite some
time. He should be aware of the Rainbow Valley and Whitehawk communities and the
conservation easement downstream of the discharge. The form is incomplete and additional
outreach should be required. For these reasons,the Application should be denied, and the proposed
permit should not be granted.
E. The Applicants have failed to meet the sludge and biosolids management and disposal
requirements.
In the Application, the Applicants state the proposed facility will generate biosolids and that it
will dispose of them in a landfill.37 However,the method of transportation and the disposal site are
listed as "TBD."38 The application requires that these portions be completed. The Application
Instructions state to, "Provide detailed information for each disposal site."39 This information
includes, "the name of the site, the site's permit or registration number, and the county in which
each disposal site is located. ,40 Likewise,the next subsection requires a"method used to transport
the sludge to the disposal site."41 The Applicants have not provided the information and there is
no way for the TCEQ to know where the biosolids will be disposed or if there is a disposal site
willing to accept them.42 Because the Applicants have failed to include this information, the
Application should be denied, and the proposed permit should not be granted.
F. Notice is Defective.
31 Admin. Package at 77-78.
36 Id. at 83-85.
37 Id. at.46-47.
38 Id.
"Id. at 51 (emphasis added).
40 Id.
41 Id.
42 This is especially important given the fluidity of the regulatory landscape and risk tolerance with respect to PFAS
as a hazardous substance.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 8
The Applicant states in the Administrative Package for Application WQ0016624001 ("Admin.
Package") that the proposed discharge will travel to Lewisville Lake. However, the path of the
proposed discharge to Lewisville Lake is not mentioned the description provided in the NORI.
Lewisville Lake is mentioned in the NAPD,though: "The treated effluent will be discharged to an
unnamed tributary, thence to another unnamed tributary, thence to Clear Creek, thence to
Lewisville Lake in Segment No. 0823 of the Trinity River Basin."This inconsistency is concerning
to the City and constitutes defective notice.43 Does the discharge flow to Elm Fork Trinity River
or directly to Lewisville Lake? It's not possible to tell from the plain text of the notices. The
TCEQ's rules require the names of the receiving waters. That information must be clear and
consistent in both the NORI and the NAPD.44 Moreover, entities or persons interested in tracking
and evaluating proposed discharges to Lewisville Lake may have disregarded the NORI and this
matter because the NORI did not reference Lewisville Lake.
III. REQUEST FOR CONTESTED CASE HEARING
1, on behalf of the City of Denton, respectfully request a contested case hearing to address the
issues raised in this Comment Letter with respect to the Application and proposed permit number
WQ0016624001. In addition, the City reserves the right to supplement and/or amend this
Comment Letter to address any issues it identifies after the public meeting.
IV. DESCRIPTION OF AFFECTED PERSON STATUS
The City is an affected person for several reasons. Pursuant to TEX. WATER CODE § 5.115 and
30 TEX.ADMIN. CODE § 55.203, "an affected person is one who has a personal justiciable interest
related to a legal right, duty, privilege, power, or economic interest affected by the application.',45
Interests common to the members of the general public do not qualify.46 Governmental entities,
like the City,with"authority under state law over issues raised by [an] application,"can be affected
persons.4' Among other relevant factors, in assessing whether to grant affected person status, the
TCEQ may consider:
1. Whether the interest claimed is one protected by the law under which the
application will be considered;
2. Distance restrictions or other limitations imposed by law on the affected interest;
3. Whether a reasonable relationship exists between the interest claimed and the
activity regulated;
4. Likely impact of the regulated activity on the health and safety of the person, and
on the use of property of the person;
43 30 Tex.ADMIN.CODE §§39.411(b),39.418(b),and 39.551(c).
44 Id.
1130 TEX.ADMIN.CODE § 55.203.
46 Id.
47 Id.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 9
5. Likely impact of the regulated activity on use of the impacted natural resource
by the person;
6. For a hearing request on an application filed on or after September 1, 2015,
whether the requestor timely submitted comments on the application that were not
withdrawn; and
7. For governmental entities, their statutory authority over or interest in the issues
relevant to the application.48
The TCEQ may also consider, "the merits of the underlying application and supporting
documentation in the commission's administrative record,including whether the application meets
the requirements for permit issuance."49
As stated in the Background section of this Comment Letter, Denton is a Retail Public Utility
that serves approximately 158,349 Texans within its city limits and many others in its service area
and surrounding portions of Denton County. Denton is a holder of water rights to appropriate
Waters of the State stored in Lewisville Lake,a regional water supply to Dallas, Denton,and many
other cities and utilities. The proposed discharge enters waters that flow through the City's ETJ
(located less than a one (1) mile from the proposed discharge),through its City limits(located less
than one (1) mile from the proposed discharge), and eventually into Lewisville Lake (located
approximately nine (9) miles from the proposed discharge).50 Therefore,the City, a governmental
entity, has interests not common to members of the public, has interests protected by state law
related to its water rights, and has a statutory interest over or interest in the issues relevant to the
Application.
Any adverse impact on water quality associated with the proposed discharge could negatively
impact Denton's diversion of water from Lewisville Lake both from a financial and technical
perspective. As a home-rule municipality, Denton has an interest in and the authority to protect its
customers and public health and safety within its jurisdictional boundaries, including its
extraterritorial jurisdiction.51 Also, as a provider of water and wastewater service inside and
outside its corporate limits,the City has an interest in ensuring orderly development using regional
and area-wide wastewater disposal systems.52 Denton intends to construct a wastewater facility
less than six (6) miles from the proposed outfall that is capable of treating the wastewater flows
contemplated by the Application.53 The discharge proposed by the Application may adversely
affect waters within the City and/or its jurisdictional boundaries. Specifically,the City is concerned
that the proposed discharge will degrade water quality thereby impacting the municipal,
environmental, and recreational uses of waters in the City and in Lewisville Lake, adversely
4s Id.
491d.
so See"Clear Creek WWTP"depicted in Exhibit"A"attached hereto. The City's ETJ is 0.12 miles from the
proposed discharge.
51 See TEX.Loc.GOVT CODE §§42.001, 54.004,212.003,212.044, and 242.001.
5'See TEX.WATER CODE §26.081(a).
51 See Exhibit"A"attached hereto.
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 10
affecting the City's efforts to manage stormwater, and increasing the cost of service to the City's
customers.
The City contends that a contested case hearing is necessary to ensure that the Application and
associated discharge will comply with state and federal law and will not negatively impact the
City, its residents, its ETJ, and its neighbors. An evidentiary hearing with sworn testimony in front
of a neutral fact finder is essential to ensure that the Application conforms with state and federal
law.
V. ADDITION TO THE MAILING LIST AND CORRESPONDENCE
In accordance with Title 30, Chapter 55 of the Texas Administrative Code, please add the
following contacts to your official mailing list for this matter:
Stephen Gay, General Manager of Water Utilities and Street Operations
City of Denton
901-A Texas Street
Denton, TX 76209
(940) 349-8086
Mack Reinwand, City Attorney
City of Denton
215 E. McKinney St.
Denton, TX 76201
(940) 349-8333
Please send all future correspondence to me using the address and telephone number provided
above.
VI. CONCLUSION
Denton respectfully submits these comments for consideration by the Executive Director and
requests a contested case hearing regarding this matter. The City may supplement and/or amend
this Comment Letter based on additional information provided in the public meeting. For the
reasons stated above in the City's comments, the Application does not meet the requirements for
permit approval,the Application should be denied, and the proposed permit should not be granted.
If you have any questions or need any additional information, please feel free to contact me.
Since v,
S pliers Gay
General Manager, 'ater Utilities and Street Operations
City of Denton Comments and Request for a Contested Case Hearing
Texas Pollution Discharge Elimination Permit Application No. WQ0016624001
July, 23, 2025
Page 11
Copy: Sara Hensley, City Manager
Mack Reinwand, City Attorney
Enclosures
Exhibit A
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