HomeMy WebLinkAbout22-2075RESOLUTION NO. 22-2075
A RESOLUTION OF THE CITY OF DENTON ADOPTING A MUNICIPAL UTILITY
DISTRICT POLICY FOR THE CITY AND EXTRATERRITORLAL JURISDICTION (ETJ);REPEALING THE PRIOR INTERIM MUNICIPAL UTILTY DISTRICT POLICYAPPROVED BY RESOLUTION 20-920; PROVIDING FOR AN EFFECTIVE DATE; ANDPROVIDING FOR SEVERABILITY
WHEREAS, Chapter 54 of the Tex. Water Code allows the Texas Commission on
Environmental Quality (TCEQ) to create a municipal utility district (MUD) for a developer to
finance the construction of facilities, including water, sewer, and drainage services, for a land
development project; and
WHEREAS, Sec. 54.016 of the Tex. Water Code and Sec. 42.042 of the Tex. Loc. Gov’t
Code require the City to consent to the creation of a MUD on land that is located in the City or
within the City’ s extraterritorial jurisdiction; and
WHEREAS, the City Council of Denton adopted an Interim Municipal Utility District
Policy on May 5, 2020 via Resolution 20-920; and
WHEAREAS, on May 17, 2022, the City Council held a work session to review and
discuss the challenges with implementing the Interim Municipal Utility District Policy due to the
interim policy not serving in the City’s best interest as determined through application of the
interim policy, and provided staff direction regarding proposed changes to the interim policy
including reviewing the City’s goals for MUD developments; and
WHEREAS, on September 20, 2022, the City Council held a work session discussion to
review and discuss the proposed draft Municipal Utility District Policy which was created to
better address the City’s expectations for MUD developments consistent with the goals presented
and City Council direction provided at the May 17, 2022 meeting; and
WHEREAS, the City Council finds it to be in the best interest of the citizens of Denton to
adopt the Municipal Utility District Policy creating a process and establishing a fee to review,
analyze, and respond to pending MUD petitions; and
WHEREAS, the City Council wishes to adopt this resolution in order to establish the
Municipal Utility District Policy as detailed herein in the public interest of the residents of the
City of Denton;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBYRESOLVES :
SECTION 1. The foregoing recitals are incorporated into this Resolution by reference as
findings of fact, as if expressly set forth herein.
SECTION 2. The City Council hereby authorizes the adoption of the Municipal Utility
District (MUD) Policy, which is attached as Exhibit “A,” and made a part of by reference.
SECTION 3. The City Council may, from time- to-time, consider changes to the MUD
Policy, as will be reflected by their future action.
SECTION 4. The prior Interim MUD Policy adopted by Resolution 20-920 is hereby
repealed in its entirety.
SECTION 5. Should any paragraph, section, sentence, phrase, clause or word of this
Resolution be declared unconstitutional or invalid for any reason, the remainder of this
Resolution shall not be affected thereby.
SECTION 6. This Resolution shall become effective immediately upon its approval.
The motion to approve this Resolution was made by ChrisMJA+b and
seconded by BriM %E . This Resolution was passed and approved
by the following vote LI - ILl :
Aye
1/
Z
1/
\/
+
Nay Abstain Absent
Mayor Gerard Hudspeth:
Vicki Byrd, District 1 :
Brian Beck. District 2:
Jesse Davis. District 3 :
Alison Maguire, District 4:
Brandon Chase McGee,
At Large Place 5 :P
JrChris Watts, At Large Place 6:
PASSED AND APPROVED this, the 2P day of zMob% , 2022.
GERARD HUDSPEATTEST:
ROSA RIOS, CITY SECRETARY
BY: _a
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
Digitally signed by MackReinwand
Date: 2022.10.20 1 2:43:35 -05'00'
Page 2 of 3
EXHIBIT “A“
MUNICIPAL UTILITY DISTRICT POLICY
MUNICIPAL
UTI LITY DISTRICT
POLICY
City of Denton
Table of Contents
1.Introduction _____.__________._____._.__.___.__.__.___.__._.___..__.__._______._.____._____.___ 2
11.Goals _________.___.________._______..____._____._.___.._______________________________._ 2
111.How to use this document: ........................................................................................................................... 3
IV. Conditions and Considerations for Consent: ..____._______.....___.__.._._._.______._._.___.__..______.4
A. Genera/............................................................................................................................................................S
B. Denton County.................................................................................................................................................S
C Development ...................................................................................................................................................S
D. TransF70rtat/on.................................................................................................................................................6
E. Utility Services - Water, wastewater and stormwater facilities .................._.......__....__..__.._..._.....__._....6
F. Electric Service .................................................................................................................................................8
G. Emergency sen//ces ...............__...__..........__.............._........_....._..........._.........._.__........__...._................9
H. Solid Waste and Recycling ...............................................................................................................................9
I. Open Space/Environment.............................................................................................................................. 10
J. (;as VUe//s.......................................................................................................................................................11
K. Financing ...___......__....._._.__...._._...._.__._......._..............__..............._...._......._................................_.11
L. Annexat/on ..........__.................._._._............_._......._..._......................._..._..............._...._......._......_...._.12
1 . Introduction
A Municipal Utility District (MUD) is a type of special district that allows a developer to fund
development typically outside of a City’s corporate boundary (i.e. city limits). While typically
residential or mixed-use in nature, a MUD can also be commercial or industrial. Once
established a MUD may issue bonds to fund, water, wastewater, drainage, electrical services,
roads or other infrastructure and services within the MUD boundary pursuant to Article III,
Section 52, and/or Article XVI, Section 59, of the Texas Constitution. MUDs are established
through application to, and approval by the Texas Commission on Environmental Quality
(TCEQ), or through the Texas legislature.
This policy applies to MUD applications within the City’s extraterritorial jurisdiction (ETJ); the
City does not permit MUDs to be created within its corporate boundaries. The City is
committed to working with MUDs towards an equitable agreement that allows both the City
and the MUD to achieve their goals. This policy will:
• Guide discussions between the City and the MUD;
• Outline the City’s goals, expectations and priorities;
• Act as a resource to evaluate MUD applications for City consent; and
• Provide a basis for a development agreement between the City and the MUD, if deemedbeneficial.
II. Goals
The City is committed to the vision and goals set out within the Denton 2040 Comprehensive
Plan. The City would like to see an equivalent or better quality of development and
environmental protection undertaken by MUDs within the City’s ETJ as is required by
developers within City limits. Reaching an agreement between the City and the MUD on how
the MUD will be developed, how services will be provided, and how the MUD will be managed
over time will provide a level of certainty and clarity for both the MUD and the City. In
addition, receiving consent from the City will satisfy one of the MUD’s application requirements
for TCEQ approval.
The City of Denton will review and evaluate applications for MUDs within the City’s ETJ in
conjunction with this policy. The City seeks to avoid any unintentional or unforeseen financial,
environmental or social burden on the City in the future. As such the goals of the policy are asfollows :
1.
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Establish an equitable arrangement between the MUD and the City in order to influence the
development as much as possible.
Establish dear guidelines with respect to MUDs, for the benefit of City Council, City staff and
the MUD, and to ensure collaboration with Denton County and neighboring communities,
as applicable.
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3. A MUD should be developed in a manner generally consistent with the Comprehensive Plan.
4. Encourage alignment with the City of Denton’s technical design standards, including but not
limited to, road, water, wastewater, and stormwater standards (within the CCN) so that
services can be provided to and maintained for the MUD over time.
Ensure the MUD has adequate protective services including fire, police, and ambulance
services for the safety of residents and the greater community.
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6. Verify the long-term fiscal sustainability of the MUD, in order to protect the residents’
investment, and ensure that a financial burden is not placed on the residents of the MUD or
the City of Denton.
Encourage environmental stewardship of MUD lands and the provision of parks and open
space for the long-term sustainability of the City’s ETJ and the enjoyment of MUD residents.
To prepare for potential future annexation of a MUD in ETJ I, ensure that the
recommendations of this policy are implemented to facilitate the technical and financial
integration of the MUD into the City.
For lands within ETJ 2, ensure that the recommendations of this policy are implemented so
that any possible negative offsite impacts of the development are minimized, and necessary
services are provided.
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10. Establish a framework for necessary communication regarding a MUD with Denton County
to ensure necessary coordination between the City and County takes place.
11. Establish clear guidelines for a development agreement between a MUD and the City of
Denton, should the City decide a development agreement is beneficial.
111.How to use this document:
As part of the TCEQ application process, a proposed MUD is required to seek consent from any
city in whose ETJ the MUD wishes to locate. The proposed MUD should provide the TCEQ with
evidence that the application (to the TCEQ) conforms substantially to the City’s consent and
provide evidence that the City’s consent does not place any conditions or restrictions on the
proposed MUD District unless otherwise negotiated through a development agreement.
This policy will act as a tool for the MUD, City of Denton staff and City Council to evaluate an
application for consent. For detailed consent application requirements please refer to the MUD
application, available on the City website. This policy should be reviewed prior to pre-
application meetings with City staff and prior to formal application for City consent.
Once a complete consent application is submitted to the City, staff will review the submission
and discuss any questions, concerns, or items of clarification with the applicant. Within 90 days
of receiving a complete application, staff will formulate a recommendation and bring the MUD
application forward for Council consideration.
City Council may support applications for consent where:
• The recommendations of this policy are met;
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• The proposed MUD is consistent with this policy and the vision and goals of the Denton
Comprehensive Plan; and
• The proposed MUD meets or exceeds the City’s minimum in requirements as applicable.
Should the City consent to the creation of a MUD, a development agreement may be entered
into between the MUD and the City. Any conditions of consent specified by Council, including
but not limited to, provision of services, details related to the finances of the MUD, future
annexation, and/or the provision of emergency services, should be included in the
development agreement. In special circumstances, where alternate and acceptable provisions
have been agreed upon by the City and the MUD, Council may vary the recommendations in
this policy.
If the proposed MUD is located adjacent to the City’s corporate boundary voluntary annexation
may be considered in lieu of a MUD. Annexation into the City may provide alternative funding
options for the development, such as a Public Improvement District (PID) and would be subject
to approval by City Council.
City Council may choose not to support applications for consent where:
• The City has plans to provide municipal services to the area proposed for the MUD within
the next 5 years;
• The property is currently included in a Non-Annexation Agreement; or
• The recommendations of this policy have not been met.
City Council shall not consider applications for consent where:
• The proposed MUD is located (in part or in whole) within the current Denton corporate
boundaries;
• The City has plans to annex the lands included within the proposed MUD; or
• The proposed MUD application is incomplete.
Should a proposed MUD not be granted consent by City Council and the MUD moves forward
with the TCECI application process, the City may challenge the applicant’s request before the
TCEQ and may appeal the decision of the TCEQ to the District Court.
IV.Conditions and Considerations for Consent:
The conditions and considerations for consent outlined in this policy stem from the City’s vision
for smart balanced growth, high-quality development, and a commitment to sustainability. It is
important to the Cityt hat MUDs in the City’s ETJ, which is the City’s future growth area, adopt a
similar vision and commitment to quality for their community. This will allow for seamless
integration of the development into the City and surrounding region as it grows.
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A. General
As MUDs are located within the City’s ETJ, and may in the future be annexed into the City, it
is of high importance to the City that MUDs are developed in accordance with the City’s
comprehensive plan. The City’s MUD application process provides the opportunity for the
MUD and the City to confirm alignment with the City’s comprehensive plan and outline an
agreement on how development and ongoing maintenance of the MUD will occur.
The proposed MUD should be generally consistent with the vision, goals and
policies of the City of Denton Comprehensive Plan.
Should City Council grant consent to the MUD, the City and the MUD should enter
into a development agreement to outline all associated conditions of consent.
The MUD should obtain all rights-of-way and easements necessary for the MUD. If
the MUD is not able to obtain necessary third-party rights-of-way and easements
then the City may, where allowed by State law, assist through the eminent domain
process for services provided by the City and all associated fees should be borne bythe MUD.
•
•
•
B. Denton County
While the City has the authority to grant consent to proposed MUDs, MUDs are also located
within Denton County. The development of a MUD has potential impacts on the
infrastructure and services provided by the County. Examples of these impacts include, but
are not limited to, road maintenance, fire protection, and policing services. To encourage
communication and transparency the County should be kept apprised of any MUD
applications within the City’s ETJ.
A proposed MUD should submit a copy of their application for consent to Denton•
County in tandem with the proposed MUD application submittal to the City.
• The City, County, and if necessary the MUD applicant, should make a concerted
effort to discuss any items within the application that require clarification or are of
concern to the County.
Any services assumed by the City that would otherwise be provided by the County•
should be included within a development agreement.
C. Development
The City recognizes that MUDs present a unique opportunity for residents to live in rural
setting. That being said, the ETJ is the City’s growth area and requires management and
planning so that the City’s long-term vision can be realized. Contiguous, staged growth
which is fiscally and environmentally sound, reduces fragmentation and sprawl, discourages
premature development, and conserves the City’s future expansion area are key
considerations for the City in the ETJ. Therefore, it is important that MUDs:
• Employ conservation design principles in subdivision design to maximize retention of
existing topography, scenic views, natural drainage flows and natural habitat.
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•
•
•
Include diversity of housing types.
Prioritize low impact design and minimize the use of impermeable surfaces in order
to maximize storm water quality and minimize downstream impacts.
Limit commercial land uses; however, should commercial land area be included in a
MUD then the City and MUD should consider entering into a strategic partnership
agreement, or a limited annexation, to allow the City to collect sales taxes from thea rea
Provide public school sites within the MUD boundary if required by the applicable
school district.
Use the City’s development standards contained within the Denton Development
Code and Criteria Manuals as a basis for development standards in the MUD.
Develop in accordance with the submitted concept plan, and any significant changes
to the concept plan should be submitted to the City for review and approval.
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•
•
D. Transportation
It is important that the local and regional transportation network be well planned and
sustainable. This includes planning for increased capacity and using consistent standards
between the City, County and MUD, so that future connections, maintenance and
replacement of transportation infrastructure can be streamlined over the long term.
• Transportation networks and construction design should be reflective of applicable
City and County mobility plans and design standards.
• Regional transportation improvements may be required as they benefit the
proposed MUD and are necessary to facilitate future development in the
surrounding area.
Transportation plans, including a transportation impact analysis (TIA), should be
reviewed and approved by the City in accordance with City standards. Construction
of and/or necessary upgrades to roadways shall be at the sole cost of the MUD
developer. Associated built infrastructure should be inspected by the City and/or
County (whoever has applicable jurisdiction) to ensure that appropriate design
standards are met. This will help to ensure consistency with City and/or County
infrastructure and promote the long-term sustainability of the road network.
The MUD transportation network should be maintained and repaired to the
satisfaction of the City and/or County in accordance with the applicable jurisdiction’smaintenance standards.
•
•
f.Utility Services - Water, wastewater and stormwater facilities
The location of the proposed MUD within the City’s ETJ will determine the nature of utility
services for the MUD. Proposed MUDs that are within the City’s certificate of convenience
and necessity (CCN), the boundaries of which generally align with ETJI boundaries, are
eligible to receive City utility services. Where this is the case, it is important that applicable
City infrastructure standards are used so that the MUD utility system is able to integrate
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into the City’s existing utility infrastructure system. When located within the CCN it will be
important that future growth in the ETJ is considered so that efficiencies are gained where
possible, and this may require the coordination and oversizing of utility infrastructure.
Areas that are outside the City’s CCN will not be eligible for City utility services. Where a
proposed MUD is located outside the City’s CCN it will be important to ensure that utility
systems installed for the MUD are technically sound and minimize the potential risk of harm
to residents and the surrounding environment. Furthermore, coordination with the water
supplier for the area and TCEQ should be pursued.
In general, regardless of where located, all MUDs should achieve the following objectives.
• AII MUDs shall have adequate infrastructure for water, wastewater, and
stormwater, as approved by the appropriate jurisdiction.
• Utility infrastructure that services the proposed MUD should be consistent with
the City’s Utilities Master Plan to ensure efficient construction and use of utilityinfrastructure.
The proposed MUD should demonstrate, to the satisfaction of the City, how
utilities will be managed over time, including:
o Treatment capacity;
o Capacity/allocation per dwelling unit/commercial unit; and
o Fiscal surety including usage rates, maintenance and amortization.
•
• Costs to relocate any existing utility infrastructure should be borne by the MUD,
not by the City.
To ensure fiscal sustainability for the MUD, taxes for the operation and ongoing
maintenance of the MUD utilities should be established (in accordance with
49.107 of the Texas Water Code), and any surplus funds collected through taxes
should be deposited in a capital reserves replacement fund. Furthermore, the
City may want to require a fund balance reserve target and require reporting on
the fund balance at a time interval deemed appropriate by the City, as allowed
by state law.
•
• Water conservation techniques should be implemented in accordance with City
standards, so that water resources are managed in an equitable and sustainablemanner over time.
The following MUD objectives are more specific to geographical considerations as it relates
to the City’s CCN.
Within the City’s CCN:
• To avoid duplication of services and infrastructure, a MUD located within the
City’s CCN should use the City as the exclusive provider of utility services. In such
a case, the City shall set and collect all associated fees with the provision ofservice.
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•Future growth in the CCN should be a consideration when determining the size
and capacity of utility infrastructure. Infrastructure should be built to a regional
standard/capacity in a manner consistent with the City’s comprehensive plan
and utility master plans. This will avoid duplication of infrastructure and allow
for maintenance and replacement cost efficiencies. Items that may need to be
considered in the design of the MUD utility network may include, but not belimited to:
o wastewater interceptors and lift stations;
o water lines;
o treatment plants; ando stormwater infrastructure.
The City may enter into discussions on cost-sharing of off-site improvements
where system wide improvements are necessary and will benefit multiple
properties.
To ensure utility infrastructure is constructed to an appropriate standard, the
following should take place:
o Plans for all utility infrastructure should be prepared, reviewed and approved
in accordance with City design standards.
o The City should inspect all utility infrastructure, at the MUD developers cost,
to ensure compliance with approved infrastructure plans.
o if utility infrastructure is not built to City standards, an exemption should be
granted by the City where appropriate.
The City and MUD may by agreement determine whether the MUD or City is the
owner of the utility infrastructure.
If a MUD within the City’s CCN wishes to receive utility services from another
source, prior written approval from Denton City Council shall be required unless
otherwise allowed by state law.
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Outside the City’s CCN:
• Plans for all utility infrastructure should be prepared, reviewed and approved in
accordance with the City, Denton County, and/or the applicable utility district(s)
design standards.
Denton County and the applicable utility district(s) should be responsible for
inspections of utility infrastructure to ensure compliance with approved
infrastructure plans.
Where the long-term maintenance of the utility system is the responsibility of
the MUD, a maintenance plan should be submitted to the City and the Countyfor review.
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•
F. Electric Service
Electric service should be provided to the MUD community in a comprehensive and cost-
effective manner to the benefit of MUD residents. Where a proposed MUD is located in the
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City’s single certified service area, the City is the exclusive provider of electric utilities.
Where a proposed MUD is located in the City’s multiple certified service area, the City
prefers to be the exclusive provider of electric utilities so that network efficiencies can be
realized. Therefore, the following is recommended as it relates to electrical service for the
MUD development.
Where a proposed MUD is located within the City’s single certified service areas, the
city shall be the exclusive provider electric utilities.
Where a proposed MUD is located within the City’s multiple certified service areas, a
MUD may solicit proposals for electric service from other providers in order to
evaluate the market and ensure that the developer obtains a competitive rate for
comprehensive service. The City should have the opportunity to review proposals for
electric service solicited by the MUD and should have the opportunity to submit a
competing offer to provide electric distribution service to the MUD. If the City
submits a proposal that is equivalent to the other lowest cost provider, then the
MUD should obtain electric service from the City.
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G. Emergency services
For the safety of MUD residents and the surrounding area, it is important that a proposed
MUD secure comprehensive emergency services, including fire and ambulance services.
Considerations for emergency services include response times, and the level/quality of
services the provider is able to offer. For this reason, it is the City’s preference that the City
be the provider of emergency services, particularly within ETJI, where there is proximity
with existing emergency service infrastructure. Once a MUD consent application has been
filed with the City, the MUD and the City should discuss the provision of emergency services
or alternate emergency service providers if deemed necessary. For the safety of residents,
the MUD shall demonstrate that it has appropriate emergency services.
If the City provides fire protection services within the MUD, a Fire Protection
Agreement with the City must be approved by City Council. The agreement should
include terms and conditions for the MUD to receive full City of Denton fire
protection services and include a Fire Service Improvement Fee (or similar fee) to
fund fire station construction and operations.
The City may require the donation of land to the City (as applicable) for fire stations
or other public safety facilities, if determined necessary for the provision of services
by the City.
For the protection of residents, roadway design should enhance access and reduce
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response times (reference section IV.D for transportation requirements).
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H. Solid Waste and Recycling
Solid waste and recycling services should be provided to the MUD community in a
comprehensive and cost-effective manner to the benefit of the MUD residents, and should
be managed in an environmentally sustainable manner.
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•
•
Where a proposed MUD is in a location where the City could reasonably provide
solid waste and recycling services, the city should be the exclusive provider of theseservices.
Solid waste and recycling services should be provided to the MUD at a competitive
rate. The MUD may solicit proposals for solid waste and recycling services in order
to obtain a competitive rate for comprehensive service.
The City should have the opportunity to review proposals for solid waste and
recycling services and should have the opportunity to submit an offer to provide
solid waste and recycling services to the MUD. If the City submits a proposal that is
equivalent to the other lowest cost provider, then the MUD should obtain solid
waste and recycling services from the City.
I. Open Space/Environment
The City of Denton places significant importance on environmental stewardship and green
infrastructure (including parks, greenways, stream corridors and tree canopies). It is
important that a proposed MUD integrate these values into the proposed development for
the benefit of the regional environment and the enjoyment of residents. In addition, should
a MUD be annexed into the City in the future, the incorporation of these considerations into
the overall MUD development design layout will ensure the MUD will have equivalent
design standards to the City.
Coordination between the MUD and the City should take place to ensure park, trail
and open space development is consistent with the City’s Parks, Recreation and
Trails System Masterplan, and the Preferred Land Preservation Plan within the
Denton Comprehensive Plan.
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• When located within ETJ I and in close proximity to City limits, the City may require
that trails and parkland or a public access easement be dedicated to the City.The trail network within the MUD should:
o Connect to points of interest within the MUD including, but not limited to,
schools, parks, and residential areas.
o Facilitate connections between the City and MUD, where possible, to the benefit
of MUD residents and the larger region.
o Be constructed to City standards for consistency and ease of maintenance.
•
• Parks within the MUD should:
o Be provided in a quantity and manner consistent with the City’s parkland
dedication ordinance
o Protect unique features.
o Be maintained over the short and long-term, including the update and
replacement of park infrastructure as needed.
o Be connected to the MUD trail network, and regional trail network, as
applicable.
The MUD should be compliant with City Environmentally Sensitive Areas (ESA)
regulations.
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•The MUD should be compliant with City tree preservation regulations.
J. Gas Wells
The City prioritizes the safety of residents in situations where the gas industry and residents
interact, through gas well setbacks and other standards. It is important that a proposed
MUD integrate these gas well development standards into the proposed development for
the benefit of the safety of its residents. In addition, should a MUD be annexed into the
City in the future, the incorporation of these development standards into the overall MUD
development design layout will ensure the MUD will have equivalent design standards to
the City
• Gas wells are encouraged to be developed and operated in accordance with the
Denton Development Code. Ideally, setbacks from gas wells should be consistent
with setbacks outlined in the Denton Development Code.
• MUDs containing gas wells located within certain watershed areas of the ETJ, must
follow watershed permitting requirements of the City.
K. Financing
It is a priority of the City that any MUD located within the City’s ETJ be developed in a
fiscally sustainable manner. This will allow the MUD to succeed over time and will prevent
any undue financial burden from being placed on MUD residents and/or the City.
Unfortunately, it is possible that a potential financial burden could be passed on through
increased taxes for MUD residents or through poorly maintained infrastructure and/or
assumed debt if the MUD lands are annexed into the City in the future. The
recommendations below seek to confirm the fiscal surety of the MUD over time.
Bonds
•Should a development agreement between the MUD and the City be required,
the development agreement should outline conditions with regards to bonds, to
ensure the fiscal surety of the MUD over the long term. These conditions may
include, but not be limited to, the following:
o Bonds should remain obligations of the MUD, until the MUDs dissolution.
o Once the MUD has established a maturity date for initial bonds, the maturity
date for any additional bonds issued should not extend beyond the maturity
date of the initial bonds. If the MUD would like a bonds maturity date to
extend beyond the initial maturity date consent from the City should be
required.
o The City and MUD may agree, as a condition for consent, to limit a MUD to
only issue bonds for the purposes of providing roads, water, wastewater and
drainage improvements as provided in the Texas Water Code, Section
54.016(e), while requiring other infrastructure improvements be financed
through other resources.
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o The City may refuse to give consent to the issuance of bonds or limit the
amount of bonds issued by the MUD if the MUD is not in compliance with all
agreements between the MUD and the City.
So that the City is aware of the ongoing financial management of the MUD, any
development agreement between the MUD and the City should outline a series
of reporting requirements with regards to administering bonds. These reporting
requirements may include, but not be limited to, the following:
o The value of the bonds being proposed for issuance;
o The projects to be funded by such bonds;
o The proposed debt service tax rate after issuance of the bonds; and
o Within thirty (30) days after the MUD closes the sale of a series of bonds, the
MUD shall deliver to the City Manager a copy of the final official statement
for the bonds as well as any additional information requested by the City.
Within sixty (60) days after the bonds are delivered the MUD should provide
the City with a complete transcript of bond proceedings.
•
Taxes
• The MUD must be financially self-sustaining with an ad valorem tax rate
sufficient to support the services provided by the MUD and a contract tax rate
sufficient to support services provided to the MUD.
• City property and land shall be exempted from all MUD taxes, assessments,
charge fees and fines of any kind.
• To ensure the long-term sustainability of infrastructure built in accordance with
this policy the MUD should establish an Operation and Maintenance Tax
pursuant to Section 49.107 of the Texas Water Code. The tax should establish a
fund that is able to cover the ongoing maintenance and replacement of
infrastructure .
L. Annexation
Should the proposed MUD desire future annexation into City limits, the proposed MUD may
enter into discussion with the City to set annexation parameters at the time the proposed
MUD is seeking consent from the City. Agreed upon terms will be outlined in a
development agreement between the City and MUD so that there is clarity for the future
annexation process.
The MUD should be developed in a manner consistent with this policy and other
applicable City policies, so that future annexation is not impaired in any way.
•
• Annexation should not occur until 100% of the original bonds for the creation and
operation of the district have been repaid.
If there is a limited purpose annexation, the MUD and City should enter into a
strategic partnership agreement (or similar) with the City to facilitate annexation.
Annexation should be based on fiscal impact, taking into consideration all public
facilities and services, and whether adequate public facilities exist.
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•
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• if public infrastructure is transferred to the City, all associated warranties should be
transferred to the City.
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