San Antonio council rejects developer-backed MUD and related agreement amid aquifer safety concerns

San Antonio's City Council voted on Feb. 5, 2026 to deny the city's consent to creation of Bexar County Municipal Utility District No. 2 and to reject a related development agreement for the proposed Guadalupe Ranch development, after more than two hours of public testimony and expert presentations warning that on-site wastewater discharge could threaten regional groundwater supplies.

The votes came after a staff presentation outlining the request from Lennar Homes and landowners to develop roughly 1,160 acres northwest of Scenic Loop Road and Babcock Road and to finance the work through a municipal utility district (MUD). Bridget White, director of the city's planning department, told the council the developer's plan anticipates about 3,000 single-family homes, on-site wastewater treatment, and infrastructure costs estimated at about $150 million; revenue was projected at roughly $106.5 million. White said the city and San Antonio Water System (SAWS) negotiated water-quality conditions and that the developer had not signed the city's development agreement as of the morning of the meeting.

Why it mattered: dozens of residents, elected officials and hydrogeologists urged the council to deny consent, arguing the development site sits in a sensitive karst landscape in the Helotes Creek contributing area and that treated effluent could reach the Edwards and Trinity aquifers. Many speakers cited the city's 2020 Southwest Research Institute evaluation and recent hydrogeologic letters and dye-tracing studies as evidence of hydrologic connection and short travel times between the aquifers.

"Any additional wastewater systems from residential development in this watershed will significantly degrade water quality," said Ronald Green, a hydrogeologist who coauthored the 2020 evaluation. "SAWS' claims are based on opinions, not science," he added during public comment.

Community leaders framed the vote as a protection of public health and future city assets. "This may be the most consequential vote of your time on council," Randy Newman, chair of the Pilatus Creek Alliance steering committee, told the dais, urging a no vote to preserve the city's leverage and avoid legal and environmental liability.

SAWS, through Donovan Burton, said the utility "takes no position" on creation of the MUD itself but stressed that the conditions the SAWS board negotiated are among the most stringent in the state and aim to protect water quality. Burton told council staff and members that the SAWS contract contains tight performance standards aimed at minimizing risk.

Council questions and protections: Council members pressed staff on what protections would remain if the city denied consent, and what additional controls a signed development agreement would provide. White said several protections would survive a denial (the items negotiated with SAWS and prior settlement provisions), but that certain development protections (third-party conservation easement, post-annexation debt protections, capped bond issuance and the right for SAWS to inspect sealed as-built plant plans) were only available via an executed development agreement. She also confirmed the developer had not signed the city's proposed development agreement as of the meeting.

Outcome: The council considered motions to approve items 4 (consent to creation of the MUD) and 5 (approval of the development agreement) so the items could be discussed together, but both motions failed when put to a vote. The transcript records the motions and the council's final outcome as "the motion fails" for both items; the council did not read a roll-call vote tally into the transcript.

Next steps: The petition for wastewater permits and the TCEQ approval remain the subject of judicial appeals referenced during testimony. The council adjourned to executive session later in the day and reconvened without taking further public action on the subject. The developer's decision not to sign the city's development agreement and the status of litigation and administrative appeals at TCEQ remain relevant for any future filings or revised proposals.

What the council said in brief: Mayor Gina Ortiz Jones emphasized the balance between development and water protection and asked whether additional development protections offered by a MUD would be worth the tradeoffs. Council members across districts cited water security, the taxing structure of MUDs and the long-term stewardship of an on-site wastewater plant as central to their no votes.

The council's votes do not eliminate the developer's ability to pursue other legal routes, including filing directly with TCEQ. Public opposition and ongoing appeals, along with the city and SAWS negotiated conditions, will likely shape further review and any future iterations of the project.