Web Posted: 10/15/2007 02:26 AM CDT Zeke MacCormack Express-News
BOERNE — After dealing with all manner of utility districts in largely urban Harris County, Terry Anderson entered a vastly different landscape upon becoming Kendall County's engineer in 2003.
Only one such district operates here, the Kendall County Water Control and Improvement District No. 1, which formed in 1946 and provides water and sewer services to about 850 customers around Comfort.
As Harris County's engineer from 1989 to 1998, Anderson said he faced "over 500 special districts, of every kind" around Houston.
But as Kendall County land prices have soared and water has become available in areas long haunted by groundwater concerns, utility districts have come into favor here as a development vehicle.
Some Hill Country residents fear that their rural lifestyle is threatened by the influx of districts that can make the building of thousands of homes possible. Others see them as the key to an orderly growth that's preferable, and more affordable, than large-lot rural subdivisions.
Two new districts taking shape in Kendall County are at Esperanza east of Boerne and Lerin Hills south of Interstate 10. Another, in Comal County, is in Johnson Ranch, near Bulverde.
All are buying Canyon Lake water piped in by the Guadalupe-Blanco River Authority. Anderson sees GBRA water — and basic American capitalism — as the driving forces behind the emergence of the districts.
County rules let developers who provide central water and sewer services shrink lot sizes, he said, noting that "small lots bring in a lot more money per unit." Though there's no minimum lot size for homes on central water and sewers, Kendall County rules say the average overall project density cannot exceed one lot per 3 acres. That's twice the density allowed for lots served by a septic tank and a well.
Developers favor forming the districts from a cash-flow standpoint because the districts allow them to avoid paying for the infrastructure out of their pocket. Newly approved districts sell bonds to fund infrastructure, then tax the new residents to pay off the bonds.
Johnson Ranch developer David Hill won approval for the Comal County Water Control and Improvement District No. 1 in February from county commissioners there after the Bulverde City Council opposed it. "The only reason why we turned them down is we didn't want to set precedents," said Bulverde Mayor Sarah Stevick. "And they had other avenues to get approved."
Kendall County Judge Gaylon Schroeder said many locals oppose seeing the countryside consumed by utility districts, which essentially are new towns with taxing authority, run by a board of directors elected by district residents.
Concerns about the districts range from clogged roads and schools to pollution fears and the strain that new populations place on government services.
There also is anger at the GBRA for fostering denser subdivisions by piping in water. But Schroeder called growth inevitable and said, "If they're going to develop the land here, we want them to bring their own water with them if they can."
He said he fears taxpayers may be left to pick up the pieces if a district fails after residents arrive. But Hill said, "Counties and cities have no liability for any of the bonds that are issued" unless the district has been annexed by a city.
GBRA Business Manager Randy Worden said the agency legally is obliged to provide water in a nondiscriminatory manner, on a first-come, first-served basis. "Has it encouraged development? I would say 'Yes,'" Worden said, but he added, "I think development is going to occur regardless of whether we brought water there or not." Developers defend the districts, noting that the new residents pay taxes to the counties they're in while also funding infrastructure such as roads and donating school sites and parks. "The benefit of a planned multi-use development like Esperanza is that you don't have 500 septic fields and 500 wells — you've got an orderly community with a central water and wastewater system," said Howard Falkenberg of Marlin Atlantis, the company behind Esperanza. Besides paying a district tax of about 95 cents per $100 in property value, Esperanza residents will be charged a 1 percent surcharge on lots to fund a community betterment account — estimated to hit $10 million — that Falkenberg said will be used for public projects in Kendall County.
A pact now being negotiated with Boerne leaders likely will include payments by Marlin Atlantis to help upgrade the city sewer system in exchange for receiving sewer service. The Dallas company took an expedited approach to forming a district, getting the Legislature to create it and to grant it limited powers of eminent domain not available to districts created by the Texas Commission on Environmental Quality.
Lacking a bill sponsor, Lerin Hills developer Abel Godines went through the TCEQ's lengthier process, which includes provisions for public input. The Lerin Hills Municipal Utility District was approved last November, but Godines is still waiting for a state agency permit for his wastewater plant's discharge.
Randy Nelson, in the TCEQ utilities and districts section, said there's been an upturn in the creation of new districts in the past two years, especially in rural areas. The agency approved about 60 special districts each of the past two years, nearly as many as the Legislature created. "Development is reaching farther out than it was," Nelson said. "Around the bigger cities, most of the land has been developed, or people want to feel like they're out in the country."
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