Missouri City hears plan to close $60 million utility funding gap; staff recommends capacity focus, regional option explored

Missouri City Council members discussed a projected $60,000,000 shortfall in water and wastewater capital projects at a special meeting on April 21, 2025, after a presentation by Nicholas Cook, assistant utilities director. Cook told the council the figure represents unfunded projects over the next five years for the Mustang Bayou service area and does not include line-extension work.

Cook framed the issue as a capacity and timing problem tied to rapid growth in the Mustang Bayou area and state permit limits enforced by the Texas Commission on Environmental Quality. "This is a presentation that has been postponed a couple of times, and so I'm here to talk to you about the priority that you didn't know that you have," Cook said. He said the service area is adding about 500 new connections per year, currently has roughly 5,200 connections and could ultimately reach about 8,000.

The presentation and council discussion outlined why the gap exists and what options the city is weighing. Cook said capacity constraints come from supply, storage and pressure maintenance. Two near-term capacity projects on the schedule would raise the city's regulatory capacity: an upgrade to an existing plant that would add 500 connections and a new water well expected to come online in 2027 that would add about 1,000 connections. Cook said the timing of projects and funding availability determine whether the city can stay ahead of projected demand.

Cook provided a staff recommendation: "It is staff recommendation that we focus on only expanding the plant capacity and allow developers to extend lines," and identified three broad paths for the council to consider: build a roughly $30,000,000 wastewater plant in phases to replace aging temporary "package" steel plants (a single 1.5 million-gallon-per-day train would be the initial step); pursue a larger, roughly $100,000,000 regional facility to serve multiple districts and future growth; or pursue partnerships and a mixed funding strategy.

The council and staff discussed funding tools and constraints. Cook said the city currently recoups about 50% of infrastructure costs through impact fees and that Mustang Bayou user rates had not been updated since February 2012. Potential revenue sources mentioned included updated user fees, an amended impact-fee study, grants (Cook noted a resubmission to funds associated with Congressman Al Green), developer contributions, bonds and certificates of obligation. The city manager said the city intends to pursue multiple funding avenues and noted a certificate of obligation program in June to address some needs.

Several council members urged regional coordination with Municipal Utility Districts. Council Member Pohne raised the possibility of regional projects through Houston-Galveston Area Council partnerships and asked whether the in-city MUDs had growth plans available for coordination. Cook and the city manager said some MUDs own capacity and in a few cases have approached the city about options; Cook mentioned Mud District 26 as having a single-train facility that is constrained and sending flows to Quail Valley. The city manager said building a $100,000,000 regional plant would require working with multiple stakeholders and that the city has begun such conversations.

Council members pressed for practical, near-term steps. Council Member Oderkirk and Council Member Emery asked about trade-offs — noting higher developer costs if fees rise — and asked whether a $30,000,000 plant would meet existing developer commitments. Cook said the smaller plant would replace temporary units and cover immediate commitments, while the larger plant would be a long-term regional solution. The council also asked about contingency planning if a MUD failed to maintain infrastructure; the city manager and legal staff said they were reviewing options and would develop contingency plans because MUD residents are also city residents.

Staff provided additional schedule and technical details: the Mustang Bayou area averages about 500 net new connections per year; capacity letters that the city issues currently show available capacity roughly through the first quarter of 2028 for larger developments; package wastewater plants have an estimated 10- to 15-year lifespan; Quail Valley's plant was described in the discussion as about 40 years old; and one shovel-ready tank project (a 600,000-gallon tank and tank replacements at Water Plant 2) is currently unfunded. Cook estimated roughly $60,000,000 of projects needed to stay on the buildout timeline over the next five years, noting that some project funding for 2025 was delayed into later years.

Council direction and next steps included staff commitments to develop financing scenarios, pursue stakeholder discussions with MUDs and regional partners, and return to council with updates. The city manager said staff will provide another update within a month and more detailed financial information by the end of the calendar year. Multiple council members urged that staff prepare a contingency plan covering the next two years in case an operator fails to meet obligations.

No formal votes or ordinances were taken during the special meeting; the item was presented for council discussion and guidance.