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Council reviews public-safety cost-recovery study for Magnolia Point and Riverfield MUDs; fees expected to rise
Summary
Staff presented a cost-recovery study showing MUDs have been undercharged for public-safety services. The study proposes a formula to shift costs so MUD residents pay their share; staff said fee increases were built into the adopted budget and that ordinance or contract language must be developed with MUD attorneys.
City staff presented a public-safety cost-recovery study and draft service-agreement recommendations for Magnolia Point and Riverfield municipal utility districts (MUDs). Staff said the study found the city has been underfunded for services provided to the MUDs, and recommended updating contracts and moving to a cost-share model so the MUDs pay a proportionate share of operating and personnel costs.
Staff said the FY2025–26 budget includes fee increases related to the cost-recovery study; those fees were not adopted as part of the fee schedule at the meeting but were included when the budget was adopted. Staff explained the budget would not be balanced without the new fees and said the city is not seeking profit—rather, the goal is to recover costs the city currently subsidizes for MUD residents.
Staff reported the total public-safety budget is about $3.55 million and that a rough rooftops split between city limits and MUDs is approximately 70/30. The consultant’s formula includes personnel and operating costs—dispatching, jail contracts and other non-vehicle costs—and staff said contracts with the MUDs currently lack defined performance parameters and clear service levels.
Next steps described by staff include meeting with MUD boards, working with both city and MUD attorneys to draft clear contract language and presenting an ordinance to adopt a fee schedule if needed. Staff said they hope to have revised contracts and ordinance language prepared in September and will publish studies and formulas on the city website.
Council members asked for data on calls for service between city and MUD areas; staff said Collin County currently cannot break the call data into the required grid and that staff will work with Collin County and the city planner to create a system that distinguishes city calls from MUD calls in future reports.
Some council members reacted to the magnitude of the proposed increases; one attendee characterized the change as an approximately 110–115% increase for certain MUD customers during the meeting, and staff described the increase as substantial but necessary to avoid subsidizing those services from general city revenue. No fee ordinance was adopted at the meeting; staff will return with contracts and an ordinance for council consideration in September.
