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A MUDdy mess for city, county!

September 27, 2023 - 00:00
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Navasota and Grimes County are facing the unintended consequences of Senate Bill 2038 effective Sept. 1 which allows residents and qualified voters to petition for removal from a city’s extraterritorial jurisdiction (ETJ).

At the Sept. 25 Regular Meeting, Navasota City Manager Jason Weeks said, “Unfortunately, there are people in development who have ties to this legislation and were able to get things changed and it was revised to say ‘landowners.’” Weeks recapped the voluntary annexation of the 96-acre Grimes Alta Mira, adjacent to petitioner Pecan Hill Acquisition LLC, the City’s plans to construct a water well, water tower and storage tank on the east side of SH 6, and its Resolution opposing MUDs (Municipal Utility Districts).

Weeks said, “Even though SB 2038 allows landowners to be removed from the ETJ, the water code in TCEQ (Texas Commission on Environmental Quality) still says that you have to have permission if it’s in the ETJ. This is another loophole the landowner has found as a way to remove themselves and move forward with a municipality utility district.” Weeks said he had reached out to the Pecan Hill Acquisition LLC about the benefits of Navasota’s TIRZ #1 (Tax Increment Reinvestment Zone) but the developer advised he has “enough” trying to deal with the 5,700-acre Todd Mission project.

Effects on city, county

Weeks said, “People who live in the MUD will pay a lot higher taxes. It’s unreal how much MUD taxes go up and it never goes away.”

Weeks touched on the impact to City amenities from Pecan Hill residents who might want to use those amenities but don’t pay city taxes. Other unknowns included EMS and building standards.

Weeks asked, “Who’s going to police it and who’s going to provide fire services out there? Trying to provide fire and police services for a much larger area than what we have now is astronomical. If you take police and fire alone, you’re talking $6 million. The way the development would occur, most of the access would come off a county road. Is the County going to have to expand that to a three or four lane county road?”

Regarding schools, according to Weeks, the developer said that if the school district needs property, it will have to pay market value.

Weeks said, “Putting in 5,000 homes, there’s implications for schools. That’s going to create a circumstance for the school district trying to find property and figuring out how that’s going to work.”

Seeking a win-win

Weeks told council, “What you have before you is a petition, if you choose not to act on it, then it automatically becomes effective after “X” amount of days. It’s not a win-win. It’s only a win-win for the developer. I’m trying to figure out how we can all have a win-win. The best way is to hope the developer wants to work with us, allow us to provide services, to be annexed in and still be able to accomplish what he’s trying to accomplish.”

Weeks confirmed that the city will not be providing free services. According to the legislation, the County is the political subdivision to regulate an area released from a municipal ETJ.

Following Weeks’ presentation, council met in Executive Session as permitted by Texas Government Code 551.072 but took no action on Pecan Hill Acquisition, LLC’s petition to be removed from the City’s ETJ.

NISD Superintendent Dr. Stu Musick, Grimes County Pct. 4 Commissioner Phillip Cox and County Judge Joe Fauth were present but made no comment.

Who, what is Pecan Hill?

Pecan Hill Acquisition LLC is comprised of 1,151.66 acres off SH 90 east of Navasota and is owned by Pilot Grove Management LLC in Las Vegas, Nevada, highly successful in the gaming industry.

Weeks was quick to say, “They are not proposing to put a casino out there. That developer did express that they do receive their funding through casinos for multiple developments.”

Pecan Hill acquired the property in November 2021 and quickly applied to create Grimes County MUD #4 to provide utility services for a subdivision with a population roughly equal to Navasota. The notice of intent flew under the radar as it was published in the Houston Chronicle rather than in Brazos Valley area publications.

The Examiner reached out to the company’s legal counsel for comment, but no comment was received by publication time.

SB 2038 history

SB 2038 was sponsored by State Representative Keith Bell (R-Forney) on behalf of Forney residents feeling the encroachment of Dallas, an hour away, and provides two options to be removed from an ETJ. One is a petition signed by more than 50% of the registered voters in the area or a majority of those who own titles to land in the area. The second is an election prompted by a petition signed by 5% of the voters in the ETJ.

In an interview with InForney, Forney attorney Elizabeth Alvarez explained that SB 2038 is specifically for those not living in the city limits who might have to conform to city’s regulation “over which they have no control since they cannot vote in city elections.”

View council meetings at minutes.php.