Council denies utility-service ordinance tied to Stonewall Commercial East replat amid water-reservation concerns

The Liberty Hill City Council voted unanimously to deny an ordinance that would have authorized city utility service tied to a proposed replat of Lot 3, Stonewall Commercial East, a roughly 1.225-acre parcel near Stonewall Parkway and State Highway 29.

Staff described the request as a utility service request (USR) necessary to approve the replat administratively; the applicants anticipate allocating three LUEs (land-use equivalents) for a proposed Waffle House and one LUE for a planned Take 5 oil-change location. Planning staff said the proposed replat otherwise met the Unified Development Code’s requirements, but council members raised concerns about the practical effect of allocating LUEs before an applicant is ready.

"I'm concerned about that aspect of it," a council member said, citing the risk that the city would be holding physical water capacity for years if a tenant does not proceed. Legal staff explained that the council can negotiate terms or include agreement language that conditions allocations on application timelines, but without such an agreement the replat requires adequate utility service to be approved. After debate on possible alternatives, a council member moved to disapprove the ordinance; the motion was seconded and carried 6-0.

Councilmembers asked staff to explore options to protect the city’s physical water capacity in future cases, including drafting agreements that would tie LUE allocations to application deadlines or conditions. Staff indicated they would return with options and legal counsel said replat approval could be made subject to negotiated conditions.

The denial halts the replat process as presented; staff recommended the council direct staff to work with developers on terms that would avoid long-term reservation of unallocated water capacity if the council wishes to revisit this or a similar application.