Hays council weighs staying in MUD/TCEQ contested case despite steep costs

The council devoted the longest portion of Monday’s meeting to an update on a developer’s application to create a municipal utility district (MUD) and the parallel wastewater permit (TLAP) process at the Texas Commission on Environmental Quality (TCEQ). City legal counsel outlined the contested‑case timeline, explained the role of pre‑filed expert testimony (deadline Aug. 30) and the hearing on the merits scheduled for Oct. 15, and cautioned that the city’s odds of prevailing were low.

City attorney summarized procedural steps: parties may pre‑file expert testimony, a contested‑case hearing is held before an administrative law judge, the judge issues a proposal for decision, and the TCEQ commissioners then make a final determination—sometimes rejecting the judge’s recommendation. Counsel estimated the total city cost through the process could be roughly $40,000–$60,000, driven largely by expert engineering and hearing time. He characterized the likelihood of a final favorable ruling as low—"in single digits." Council members split on strategy: some argued the city should continue to ensure it has expert evidence on the record, while others urged stopping to preserve limited reserves.

No binding withdrawal motion was adopted at the Aug. 12 meeting. Staff and legal counsel will continue preparing testimony so the city has a seat at the table should council later direct full participation; council members asked for clearer cost accounting and for staff to present options at a subsequent meeting. Council members repeatedly said protecting the local water supply was the underlying policy reason for considering further expenditure, but they also acknowledged the financial trade‑offs and the low statistical odds of overall success in front of state regulators.