Josephine council declines consent to Greenwood MUD and asks Texas Municipal League to pursue MUD reforms

The Josephine City Council on Aug. 12 voted to decline consent for the creation of Greenwood Municipal Utility District No. 1, a proposed roughly 48.6‑acre development partially within the city’s extraterritorial jurisdiction. City staff told the council that the proposed MUD is dense and provides limited benefits to the city, and recommended declining consent so the city’s position is on record.

City staff also briefed the council on additional MUD petitions in the region and presented a draft resolution asking the Texas Municipal League (TML) to pursue reforms to the process for creating and overseeing MUDs. Staff described a list of issues for TML consideration: shifting creation authority away from expedited TCEQ approvals to more legislative or regional review, requiring verification of water and wastewater capacity, mandating service contracts for essential public safety services, improving election integrity for MUD debt issuance, requiring land dedication or funding for school districts, and placing limits on excessive debt issuance.

A staff representative summarized the risks he and other cities have observed: TCEQ’s application process typically does not require independent confirmation of sufficient water or wastewater capacity from downstream providers; MUDs can opt out of city CCNs; and in some cases, debt issuance for MUDs has been substantial while city taxpayers absorb regional service burdens. The council approved both a resolution declining consent for Greenwood MUD and a resolution to forward suggested MUD‑reform priorities to TML.

City staff said they will continue to engage with petitioners when appropriate but stressed the need to document municipal concerns and to ask for statewide changes that would verify infrastructure availability and increase transparency and oversight before new MUDs are created.