Title
Consider/Discuss/Act on an Ordinance Enacting a Temporary Cessation on Any 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 the City of McKinney’s Extraterritorial Jurisdiction and/or Certificates of Convenience and Necessity
Summary
COUNCIL GOAL: Operational Excellence
(2A: Balance available resources to accommodate the growth and maintenance needs of the city)
MEETING DATE: June 25, 2024
DEPARTMENT: Development Services
Public Works
City Attorney’s Office
CONTACT: Michael Quint, Executive Director of Development Services
Ryan Gillingham, PE, Director of Public Works
Mark Houser, City Attorney
RECOMMENDED CITY COUNCIL ACTION:
• Approved the proposed ordinance.
ITEM SUMMARY:
• Staff is proposing an ordinance that, if approved by the City Council, would enact a temporary cessation which would temporarily halt any 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 the City of McKinney’s Extraterritorial Jurisdiction (ETJ) and/or Certificates of Convenience and Necessity (CCN).
• 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 Certificates of Convenience and Necessity (“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 a city’s ETJ without concurrence or approval of a city.
• As a result of the foregoing, the City of McKinney has petitioned the Public Utility Commission of the State of Texas (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.
• If approved by the City Council, the proposed ordinance would enact 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.
BACKGROUND INFORMATION:
• A city’s Extraterritorial Jurisdiction (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 ETY. City’s may only annex properties in their ETJ.
• A Certificate of Convenience and Necessity (CCN) is a permit issued by the Texas Commission on Environmental Quality (TCEQ) which 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