TCEQ approves creation of Grayson County MUDs 6A and 6B over city objections

The Texas Commission on Environmental Quality voted to create Grayson County Municipal Utility Districts 6A and 6B after adopting an administrative law judge's proposed order with minor textual corrections.

Petitioner counsel Derek Seal told the commission the applicant, Treasure Island Laguna Azure LLC, had acquired roughly 1,127 acres northeast of Van Alstine and intends to develop single-family lots, multifamily housing, commercial property and a school. “We would ask that you grant the petitions,” Seal said, summarizing the ALJ’s findings that the petitions met the statutory burden of proof.

The City of Van Alstine, represented by Stephanie Albright (Vickerstaff Heath Delgado Acosta), opposed creation of the districts. Albright said the petitioner failed to show legal, financial and technical feasibility as required by Texas Water Code section 54.021, criticized the petitioner’s cost comparisons and noted the petitioner proposed roughly $87 million in on‑site water and wastewater construction while the city’s expert estimated the city could provide services at approximately $73 million less. She also raised concerns about groundwater recharge and the proposed districts’ stormwater controls, noting the plan set aside about 10% of the land for open space and detention despite the presence of two FEMA floodplains.

The Executive Director and OPIC recommended approval. Kayla Murray (Environmental Law Division) told commissioners the ALJ concluded the petitioner met its burden and recommended adoption of the PFD. Eli Martinez of the Office of Public Interest Counsel said OPIC’s review and the ALJ’s findings showed the petitions complied with applicable statutes and rules, including feasibility and environmental-factor considerations under Texas Water Code and Commission rules.

In rebuttal, the applicant said it has TCEQ public water system authorization, referenced a Collier Engineering groundwater study and testimony from its engineer, and said it plans to spend $34 million on runoff and drainage controls plus $5 million on detention facilities. The applicant’s counsel also described failed negotiations with the city that would have required annexation terms the applicant considered unacceptable.

Commissioners discussed the record, proposed several typographical and clarifying edits to findings and conclusions (for example, replacing a reference to "water" with "wastewater" where appropriate and correcting a statutory citation to the Texas Local Government Code), and voted by voice to adopt the ALJ’s proposed order as modified. The order’s adoption instructs the Executive Director to finalize the matters consistent with the Commission's modifications.

What happens next: The Commission adopted the modified PFD and the creation of MUDs 6A and 6B is authorized as ordered by the Commission; the order contains a record of the Commission’s findings and the edits noted on the record.