Trophy Club boundary expansion is effective; town and MUD remain split on transferring water and fire services

At a March workshop, Town of Trophy Club officials reviewed a Municipal Utility District (MUD) boundary expansion that officials said became effective Jan. 1, 2025, and discussed unresolved plans to transfer the town’s public water system and the funding/operation of the town’s fire department.

The boundary expansion, filed with Denton County on Dec. 20, 2024, and confirmed by the county appraisal office as effective Jan. 1, 2025, moves areas previously outside the MUD into MUD No. 1, officials said. That change shifts some charges that were assessments into a district property tax for affected property owners and gives those residents eligibility to vote in MUD elections, officials said.

Town Manager Brandon Wright said the expansion was intended to simplify a decades‑long patchwork in which the town and the MUD delivered water, sewer and fire/EMS through interlocal agreements. “For the last 40 years, the town and the MUD have provided the water services and the fire and EMS services,” Wright said, describing a long history of cooperation and the goal of giving residents a clearer, single‑system experience.

Why it matters

Town and MUD leaders said three immediate effects flow from the expansion: residents in the newly included areas will appear on the MUD tax roll beginning with 2025 tax data; some fees previously listed as non‑tax assessments will be reported as property tax and therefore can be deducted for federal income tax purposes; and residents who were previously outside the MUD now may run for and vote in MUD elections.

What was approved and what remains pending

Officials said both the town council and the MUD board approved resolutions consenting to boundary expansion and expressing intent to reallocate services in October 2024. The formal expansion request was filed with Denton County on Dec. 20, 2024, and the county appraisal district confirmed the expansion’s effective date as Jan. 1, 2025.

But the larger step of transferring ownership and operation of the town’s public water system and of reallocating responsibility and funding for fire protection and EMS has not been completed. Town staff described a process that requires coordinated, binding elections or mutual board action to transfer services and assets, and the bodies remain at odds over whether the town or the MUD should put binding ballot measures on coordinated schedules.

The MUD board voted on Jan. 15, 2025, to ask the town to place a nonbinding referendum on the May 2025 ballot to gauge resident support for the concept, according to town staff. The town concluded on Feb. 3 that any ballot question the council orders would be binding under state law and requested coordinated, binding elections and proposed moving the vote to November to align with budget calendars. The MUD board voted on Feb. 19 to decline the town’s request for binding elections. Town officials said that, absent further action by the MUD board, there will be no transfers initiated by the town.

How the interlocal agreement (ILA) allocates costs

Town Manager Brandon Wright summarized the ILA that governs town–MUD cooperation: personnel costs for shared fire/EMS staff are split 50/50 between the town and the MUD; the MUD is responsible for debt it incurs; and the MUD “shall fund 100% of budgeted and amended budgeted cost and budgeted cost of services and supplies associated with fire protection services,” Wright said. He added that EMS costs fall to the town under the agreement.

Wright explained that the ILA ties the MUD’s maximum annual payment to the amount of revenues available from the levy of the MUD’s fire tax without triggering the state’s voter‑approval tax‑rate mechanism (commonly described as the 3.5 percent cap under Texas law). “The maximum annual payment amount shall be the amount of revenues available to district from the levy of a fire tax without triggering the voter approval tax rate,” he read from the agreement.

Officials said that language means the MUD’s contribution is effectively capped each year by state rules that limit how much property tax revenue can increase without voter approval; when MUD fire tax collections are insufficient, the ILA allows the MUD to use other available funds but does not obligate the MUD to pay above the maximum annual payment amount stated in the agreement.

Budget, reserves and capital needs

Council members and staff identified three funding challenges if fire responsibilities remain shared: 1) the absence of a formal capital replacement program for fire equipment and facilities, 2) reliance on MUD fire‑tax reserves to make up annual shortfalls, and 3) the need for joint agreement on staffing levels.

Wright said the MUD’s fire tax reserves were about $600,000 at the end of the MUD’s last fiscal year (Sept. 30). He said the MUD drew roughly $180,000 from reserves in the current year to cover costs. Town and council members warned that if reserves fall below needed levels, the town could face a budget shortfall unless the parties agree on alternate funding or a change in service allocation.

“The capital replacement and capital expenses budgets are at $0 for the year,” Wright said, meaning routine equipment purchases such as radios, thermal imagers and HVAC repairs would require a MUD budget amendment or town funding if not otherwise agreed.

Staffing and operations

Council members pressed for a mutual, written understanding on staffing. Council members reported the department operates 18 sworn personnel total, commonly described in the meeting as five firefighters per shift (with one shift having six). Several council members said the town had already added positions in anticipation of taking over full fire operations, and that those unilateral staffing decisions should be reconciled with the MUD if the collaboration is to continue.

Next steps and schedule

Town staff said they have proposed a joint budget meeting with the MUD to address the shared budget and ILA items; town and MUD staffs have historically met to coordinate budgets, and officials said they want to resume that practice earlier in the budget cycle so any adjustments can be known before tax rates and budgets are finalized. Town staff recommended continuing negotiations on a revised ILA that would clarify capital replacement funding, identify alternate funding sources to cover shortfalls, and produce a multi‑year capital improvement plan for fire equipment and facilities.

Town officials stressed they will not unilaterally transfer services; instead, further action requires MUD board initiation or coordinated binding ballots that both entities accept. In the meantime, the boundary expansion is in effect and tax bills for affected properties will reflect the MUD levy beginning with 2025 data.

Quotes from the meeting

Mayor (name not specified) — who opened the workshop — framed the effort as aimed at clarity for residents: “The winner is the Trophy Club resident,” the mayor said, urging a cooperative approach.

Town Manager Brandon Wright summarized the complexity: “Most people don’t quite understand how it is that the town and the district work together collaboratively to be able to bring about the services of fire provision as well as water and sewer,” he said, and he reviewed the ILA language tying MUD payments to the fire tax without triggering the voter‑approval tax rate.

Councilmember Dennis (first name only) said the change corrected an inequity between neighborhoods: “It was a massive mistake to have the circumstances exist to create a situation where you had this whole third of the community that couldn’t figure out where their services were coming from,” he said.

Councilmember Steve (first name only) emphasized that whichever entity controls the services must be able to answer the question of readiness in a major emergency and urged officials to prioritize public safety and clarity for residents.

Ending

Council members and staff left the workshop with a shared list of issues to raise at the next joint budget discussion: a multi‑year capital plan for fire equipment and facilities, clarity on the MUD’s funding intent and available sources, and a negotiated staffing level and funding commitment. Town staff said they remain prepared to effect asset transfers if and when the MUD initiates or the parties execute coordinated, binding actions required under state law.

(End of article)