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Council tables Firefly Cove municipal utility district consent agreement after lengthy debate
Summary
Councilors delayed action on a consent agreement to form a municipal utility district for the Firefly Cove development after members and residents debated public access to amenities, long-term tax impacts and enforceability of resident-only restrictions.
Lago Vista city council on Feb. 6 tabled a consent agreement requested by Firefly Cove LLC to create a municipal utility district (MUD) after a daylong discussion about public access to parkland, potential tax burdens on future homeowners and legal enforceability of resident-only access restrictions.
Developers, represented by attorney Lacey Ehlers, told council the MUD would fund water, wastewater, drainage, roads and amenities; city staff and the developer exchanged edits on easements, maintenance and public-access language. City attorney Brad Bullock advised that cities can include reasonable restrictions in dedications but cautioned that limitations on access to open trails and parkland are practically hard to enforce and might be problematic for publicly dedicated trails.
A central disagreement was whether the agreement should limit public access to amenities such as pickleball courts and lake access to Lago Vista residents. The developers said gated access or card systems would be expensive to implement and maintain and that the MUD or HOA administering access posed practical and legal challenges. Council debated whether restricting access would require changes to the project’s planned development district (PDD) and whether changes could or should be subject to a supermajority vote. City attorney Bullock said a contract cannot change an ordinance and that any required PDD amendments would be a separate legislative process.
Several councilors, and several residents who spoke, raised tax concerns. Councilor Dirk Goss (developer representative) and others argued the MUD enables infrastructure financing and amenities that add community value. Other councilors—including those who already opposed MUDs—said they were concerned about the long-term tax burden for future homeowners and that homestead exemptions and other state rules limit the MUD’s ability to cap assessments for non-homestead properties.
Town-hall-style debate ended without a vote after a late-night motion to table the item until the Feb. 20 meeting and to authorize counsel for both parties to finalize a version of the agreement for the packet. Council asked staff and the developer to finalize negotiated edits and to return with a single version in the Feb. 20 packet.
