Council warns MUD growth and pending state bills could limit Josephine’s control over development

Council and staff devoted a large portion of a Josephine work session to municipal utility district (MUD) growth around the city and to several Texas legislative proposals council members said could affect local authority.

Staff summarized that there are about 15 existing or proposed MUDs in the area around Josephine, including a Hunt County MUD (referred to by staff as MUD 3) that has indicated plans for roughly 6,600 homes; Riverfield, Wildflower, Magnolia, and Golden Barn were among developments discussed. Staff said the city faces pressure from large outside developments that may seek water service, CCN (Certificate of Convenience and Necessity) modifications, or changes in ETJ (extra‑territorial jurisdiction) boundaries.

On legislative matters, staff and council discussed multiple bills pending in Austin. Staff referenced House Bill 4978 (described in the meeting as a bill being heard in the Texas House Land and Resource Management Committee) and said the staff recommendation was to seek amendments to require that any memorandum of understanding between a city, county and a MUD cover not only water and roads but also wastewater, police, fire, ambulance, garbage and other public health and safety services; the stated goal is to prevent automatic approval by TCEQ that circumvents local negotiations. Staff said they plan to testify in Austin and to propose language broadening the scope of required service agreements.

The group also discussed Senate Bill 673, described at the meeting as an ADU (accessory dwelling unit) bill that could allow accessory dwellings in single‑family backyards statewide, and staff said the city would likely oppose that measure describing concerns about additional water and sewer demand beyond current capacity. Another bill (referred to as “house bill 23” in the meeting) was discussed; staff described it as a measure that would bypass city plan review and inspections in some cases.

Given the circumstances, staff recommended against releasing ETJ or CCN areas and urged case‑by‑case negotiation with developers when applications become formal. Council members asked whether not releasing ETJ meant the city would be obligated to provide services; staff clarified that if the city relinquished ETJ/CCN it would likely not be obligated to provide services but would lose the ability to negotiate terms. The council also discussed potential strategies including improved development agreements, targeted annexation, and continued legislative advocacy.

Why it matters: MUDs and state law changes can shift development control and long‑term service obligations to districts and state agencies, with long‑term financial and service impacts for cities and residents.

What’s next: Staff said they would continue to track the bills, propose amendments to the House sponsor, attend relevant committee hearings in Austin, and post MUD application materials on the city website to increase transparency.

Note: The article reports the bills and staff positions as discussed at the meeting; it does not take a position on the legislation.