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City presents MUD cost-recovery study recommending fee increases for Magnolia Point and Riverfield
Summary
Staff reported a cost-recovery study finding the MUDs were underfunding public-safety costs; the study recommends fee adjustments so MUD residents pay a fair share instead of city taxpayers subsidizing MUD services. Council asked for more data and a meeting with MUD attorneys before any fee ordinance.
City staff presented a cost-recovery study for public-safety services that recommended increasing fees charged to Magnolia Point and Riverfield Municipal Utility District (MUD) residents to cover their share of police, fire and related operating costs. Staff said the study shows the city has been subsidizing some MUD services and that, without adjustments, the city would continue to absorb the shortfall as the MUDs expand.
The presenter explained that the public-safety budget used for the analysis was approximately $3,550,000 and that an approximate rooftop split suggested a roughly 70/30 distribution between city and MUD service counts; the study concluded the current funding models and contracts are outdated or inconsistent. Staff said the goal is not to generate profit but to recover costs and to be fair to both city and MUD residents.
Council asked whether historical calls-for-service can be broken out between city and MUD addresses. Staff said the current dispatch system (through Collin County) cannot easily separate calls but that they will work on a grid to allow future breakdowns and to provide more precise data. Staff also described the next steps: schedule a meeting with the MUD board, negotiate contract language with city and MUD attorneys to clarify service levels and performance measures, publish study materials on the city website, and bring a fee-schedule ordinance for council review in September.
A councilmember observed the draft study’s proposed increases would be substantial (one council member described numbers as "110–115% increase" in an offhand remark); staff acknowledged the jump is large but argued the revised fees reflect previously uncharged service costs. Council requested time to review, to meet with the MUD board and attorneys, and to study alternative valuation methods tied to home value before any final ordinance.
