Title
Consider/Discuss/Act on a Resolution Reaffirming and Consenting to the Decertification of Portions of McKinney’s Water Certificate of Convenience and Necessity No. 10194 and Sewer Certificate of Convenience and Necessity No. 20071
Summary
COUNCIL GOAL: Operational Excellence
(2A: Balance available resources to accommodate the growth and maintenance of the city)
MEETING DATE: May 6, 2025
DEPARTMENT: Development Services / City Attorney’s Office
CONTACT: Michael Quint, Executive Director of Development Services
Mark Houser, City Attorney
RECOMMENDED CITY COUNCIL ACTION:
• Approve the proposed resolution.
ITEM SUMMARY:
• In late 2023, the City petitioned the Public Utility Commission of the State of Texas (“PUC”) to decertify portions of its current water Certificate of Convenience and Necessity (“CCN”) and wastewater/sewer CCN in Docket No. 56698.
• Staff is proposing a resolution that reaffirms the City Council’s consent to the decertification of portions of McKinney’s water CCN No. 10194 and sewer CCN No. 20071.
BACKGROUND INFORMATION:
• McKinney’s current Comprehensive Plan was adopted in 2018, and it guides development within our city limits as well as our ETJ. The city’s Water Distribution System Master Plan (“Water Master Plan”) and Wastewater Collection System Master Plan (“Wastewater Master Plan”) were developed based on the land use assumptions and anticipated densities prescribed by the Comprehensive Plan. Additionally, the City holds water and wastewater CCN, which generally align with the limits of our ETJ.
• Recent state legislation has created development conditions in McKinney’s ETJ which make providing retail water and wastewater service unpredictable from a planning and management standpoint. As a result of these laws, involuntary annexation of properties in the ETJ by the City is no longer available, and property owners are now able to remove their property from the City’s ETJ without concurrence or approval of the City.
• As a result of the foregoing, the City of McKinney has petitioned the PUC to decertify portions of its current water and wastewater CCNs in Docket No. 56698.
• Without the ability to plan for and regulate densities and land uses and without the ability to efficiently involuntarily annex properties in the ETJ into our corporate limits, the ability to ensure the adequate provision of services in the ETJ is no longer sustainable and doing so poses potential harm to the public peace, health, or safety of the citizens of McKinney.
• Ordinance No. 2024-06-046 enacted a temporary cessation period through July 1, 2025, which should afford the PUC sufficient time to rule on the City’s CCN decertification petition. Until that time, no new water or wastewater utility line connections, approval or issuance of any new water meters, or the creation of any new retail utility service accounts for properties located outside the City’s incorporated limits but within McKinney’s ETJ and/or CCNs would be permitted, unless approved through the exception process established by the proposed ordinance.
• A city’s ETJ is the area outside the incorporated limits but within its ultimate planning area. The City is not authorized by state law to enforce any land use or zoning regulations in the ETJ. Cities like McKinney may only annex properties in their ETJ with the permission of the individual property owners or in certain instances with a majority of the owners or residents in a specified geographic area.
• A CCN is a permit issued by the Texas Commission on Environmental Quality (“TCEQ”) that authorizes and obligates a public utility to provide services to a specified geographic area.
• The Texas Local Government Code Section 552.001 states, in part:
(b) A municipality may purchase, construct, or operate a utility system inside or outside the municipal boundaries and may regulate the system in a manner that protects the interests of the municipality. The municipality may own land inside or outside its boundaries for these purposes.
(c) A municipality may extend the lines of its utility systems outside the municipal boundaries and may sell water, sewer, gas, or electric service to any person outside its boundaries. The municipality may contract with persons outside its boundaries to permit them to connect with those utility systems on terms the municipality considers to be in its best interest. This subsection does not authorize the extension of electric lines into the corporate limits of another municipality.
FINANCIAL SUMMARY:
• N/A
BOARD OR COMMISSION RECOMMENDATION:
• N/A