Title
Consider/Discuss/Act on a Resolution Consenting to the Creation of a Municipal Management District for the Honey Creek Development
Summary
COUNCIL GOAL: Direction for Strategic and Economic Growth
(1A: Establish regional infrastructure incentives to increase economic growth)
MEETING DATE: February 6, 2024
DEPARTMENT: Development Services
CONTACT: Michael Quint, Executive Director of Development Services
Mark Houser, City Attorney
ITEM SUMMARY:
• Republic Property Group, the developer for the Honey Creek property which is approximately 1,648 acres located within the city’s northwest sector (west of US Highway 75 and north of US Highway 380), is seeking the City Council’s approval of a resolution formally consenting to the creation of a Municipal Management District (MMD) subject to specific conditions being satisfied.
• On December 20, 2022, the City Council approved a resolution consenting to the creation of a Municipal Management District (MMD) via the legislative process at the State Capitol. However, while the bills establishing the proposed MMD have been approved by the Texas House and Senate, they have been vetoed by the Governor as part of unrelated political agendas. The bills have yet to be reconsidered as part of a special legislative session.
• Due to the delays with the State Legislature, the developer is now seeking other ways to establish the proposed MMD. The Texas Water Code and Texas Local Government Code allow the Texas Commission on Environmental Quality (TCEQ) to create a MMD as well. The proposed resolution, if approved by the City Council, will accompany the developers application to the TCEQ to create a MMD.
• The proposed resolution consenting to the creation of the MMD (the “District) restricts the authority of the MMD, if created by the TCEQ. Without prior consent of the City by ordinance or resolution, the MMD may not:
(a) Impose an ad valorem tax on property within the District; or
(b) Impose an impact fee within the District; or
(c) Exercise the power of eminent domain; or
(d) Elect its board of directors under Section 375.0645 of the Act; or
(e) Add land to the boundaries of the District in the manner provided by Subchapter J, Chapter 49, Water Code, or by Subchapter H, Chapter 54, Water Code.
• Additionally, the resolution requires the execution of a development agreement with the City and if said agreement is not approved and executed by September 30, 2024, the MMD shall be automatically dissolved.
• Like a PID, a MMD is a mechanism that would expedite the development of the Honey Creek property earlier than would occur naturally via the organic extension of infrastructure. Infrastructure constructed in this area will also support the development of the surrounding ETJ properties.
BACKGROUND INFORMATION:
• Republic Property Group presented the concept of a Municipal Management District to the City Council at the December 6, 2022, work session. At that time, several City Council members expressed preliminary support for exploring the creation of a special district.
• A Municipal Management District is a type of special district authorized by state law to assist with the construction of improvement projects. Improvement projects must confer a “special benefit” to properties located within the district.
• Generally, a MMD is somewhat of a hybrid between a Public Improvement District (PID) and a Municipal Utility District (MUD). The MMD will establish a board, comprised of residents within the District, which has bonding authority (similar to a MUD) and which can levy an assessment in addition to the city’s taxes (similar to a PID) but relieves the city of any obligation to administer or enforce terms of the District (similar to a MUD).
FINANCIAL SUMMARY:
• N/A
BOARD OR COMMISSION RECOMMENDATION:
• N/A