Trophy Club council directs staff to continue negotiations with MUD over water assets and to protect tower lease revenue

The Trophy Club Town Council on Feb. 9 directed staff to continue negotiating with Trophy Club Municipal Utility District No. 1 over transfer of water and wastewater assets, and to prepare a formal response to a termination notice from the MUD while protecting the town’s existing cell-tower lease revenue.

Town staff said the town and MUD have spent roughly a year combining previously separate water systems after a boundary expansion that put all Trophy Club residents inside the MUD. Staff presented a special warranty deed to convey the town’s water tower parcel and a second-amendment/termination agreement intended to transfer PID water and wastewater assets to the district. "This is a 99-year lease," a town staff member said of the existing interlocal agreement, arguing the contract does not allow one party to unilaterally terminate during the initial term.

A town attorney (unnamed in the transcript) described a draft special warranty deed that would convey the tower for nominal consideration while retaining the town’s existing leasehold interests in cellular equipment; the MUD proposed a memorandum of agreement that, in the town’s summary, would require assignment of the leases and permit the MUD to retain and disburse associated funds. Council members said the tower lease revenue matters: "And just for the record, it's 125,000 a year at the lease fees?" one participant asked; staff said that reflected last year’s receipts.

Council discussion focused on protecting the town’s contractual interests in telecom leases, keeping resident water service uninterrupted, and avoiding unnecessary legal costs. Several council members recommended a joint meeting with the MUD — including staff rather than only attorneys — to resolve lease-language impasses. The town attorney said he had already responded informally to the MUD’s termination notice and could prepare formal correspondence for council review.

No formal action was taken in executive session; the council provided direction to staff to continue negotiations and to draft the formal response clarifying the town’s position on the termination notice and the 99-year ILA. Council emphasized that, unless the parties reach a mutual agreement, services would continue under the existing agreements and the town would seek to preserve lease revenue and lease-control protections in any conveyance.