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Josephine officials urge caution on MUD requests, plan legislative outreach on MUD reform
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Summary
City leaders described rapid growth and multiple Municipal Utility District (MUD) proposals affecting Josephine’s ETJ and said staff recommends not releasing ETJ or CCN. Officials said they will pursue legislative changes, highlighted bills pending in Austin and planned testimony in House committee.
City staff presented a “state of the city” briefing at the work session that emphasized rapid population growth, multiple proposed MUDs near Josephine and a staff recommendation to avoid releasing the city’s extraterritorial jurisdiction (ETJ) or Certificate of Convenience and Necessity (CCN) without negotiated protections.
Why it matters: Council heard that Josephine’s service-area population grew sharply in recent years and that several proposed MUDs — including a project described as Hunt County MUD 3 with a proposed 6,600 homes — could shift control over development and services unless the city negotiates development agreements. Staff warned that releasing ETJ or CCN could remove the city’s ability to require conditions for service.
Legislative action and outreach: City leaders described several bills pending in the Texas Legislature. The mayor’s office and staff said they are monitoring about a dozen “MUD reform” bills and identified one (referred to in the meeting as House Bill 4978) that would, if amended, give cities more input when a MUD in a city’s ETJ seeks TCEQ approval. The staff speaker said the bill would require a memorandum of understanding between city, county and the MUD for water and roads; the speaker urged adding wastewater, police, fire, ambulance and other public-health and safety services to that requirement. The speaker said they planned to testify in Austin at a committee hearing and to propose amendments.
Accessory dwelling and plan-review bills: Staff also flagged Senate Bill 673 (referred to in the meeting as an “ADU bill”) that would expand accessory-dwelling-unit allowances and said the city is opposed, noting local water and service-capacity concerns. The meeting referenced a House bill (referred to as House Bill 23) that would allow third-party plan reviewers to report to developers rather than the city; the staff speaker said that would weaken the city’s control over plan and inspection quality.
Discussion and next steps: Council members discussed alternatives to MUD development, including assessment of PIDs and annexation trade-offs, and reiterated that individual MUD proposals will be considered on a case‑by‑case basis. Staff said it will increase transparency of MUD applications online and will continue legislative outreach and testimony in Austin.
What was not decided: The council did not vote on a formal ETJ policy during the work session. Staff asked for feedback and said formal proposals will follow as applications become concrete.
