Comal County, Texas

NEW BRAUNFELS - Comal County officials carefully are watching plans for a new subdivision near Bulverde, which could provide a template for a wave of new high-density building north of San Antonio.
"It's a whole new way to develop the Hill Country," said Comal County Engineer Tom Hornseth.
Lufkin developer David Hill plans to form Comal County's first Water Control & Improvement District to provide water, wastewater and drainage infrastructure for his Johnson Ranch development. Plans filed with the county call for 1,025 lots on 449 acres, plus 61 acres of mixed-use development and 250 acres of easements, rights of way and open space.
The water districts are similar to Municipal Utility Districts. Both allow the developer to issue tax-exempt bonds to finance drainage, water distribution, wastewater collection and treatment systems and to levy a property tax on the land in the district to pay back the cost of building those facilities.
Hornseth said at least two other developers have discussed forming districts for their planned, large subdivisions in the county. And as rural real estate values rise in the region, the districts may become more popular.
The districts also allow builders to put many more houses on each acre than one home per one-to-five acres typically allowed under standard development rules.
Many subdivisions in unincorporated areas do not have public water and sewer systems, and most of the rest have public water, but not public sewer. County regulations require home lots of five acres or more if the homes rely on wells and septic tanks, and one acre or more if they have public water and septic tanks.
The rules were put in place to ensure water availability and quality, but they also limit the density of development. There are no minimum lot size requirements for subdivisions with public water and sewer systems.
"If these (districts) become common, you are talking about Harris County-type developments moving into Comal County - big money stuff,"
said Comal County Commissioner Jay Millikin. "It's a different kind of development philosophy than we have seen in the past. I'm greatly concerned."
Kendall County Judge Eddie Vogt said he's heard rumblings that Municipal Utility Districts could be headed to his county.
"There are two developers who have been talking seriously about it," he said. "It's kind of a new concept out here, but the general consensus from the public has been pretty unfavorable."
Vogt shared the same concerns as the Comal County officials, that the districts would allow much smaller lot sizes than traditional development in the county, and if they become common, they could overwhelm county infrastructure and services.
"On the other hand, you have a sewer system instead of a bunch of septic tanks, so I think there's less potential for contamination," he said.
While the Johnson Ranch subdivision in Bulverde is looking at average lot sizes of slightly less than half an acre, developments with special districts could go much smaller, with half a dozen or more homes per acre, without violating any county regulations, Hornseth said.
Such subdivisions would have to comply with county storm water runoff and water availability rules, but high density development could lead to many unwanted secondary effects, including traffic congestion, crowded schools, reduced aquifer recharge and strained law enforcement, fire and emergency medical services, county officials said.
But the advantages to the developer are clear.
Special taxing districts provide low-cost financing to build the subdivision's infrastructure and allow the developer to pay it back by taxing property buyers. The water and sewer service lets the developer maximize profit by allowing many times more lots to be carved from the same land.
"The Hill Country will look substantially different in the future if these take a foothold in Comal County," Millikin said.
Developers must go to the County Commissioners Court to get a water district approved, but if the county denies the application, the developer can go to a district court or to the Texas Commission on Environmental Quality to get approval over the county's objection.
Utility districts generally are approved by the commission, but also can be formed by the state Legislature.
"Ultimately, the authority is not ours," Millikin said.
Hill, the Lufkin developer, said the state generally approves such applications if all its criteria and guidelines are met and the developer can justify the need. The additional property tax would still keep tax bills lower than in San Antonio, he said.
The proliferation of water districts would be good for Comal County, Hill said.
"The services the county provides are very limited, but (the county
gets) substantial additional ad valorem tax revenue," Hill said. "It's an absolute win-win deal. That property is going to be developed anyway."
He pointed out that the districts themselves do not allow denser development. Water and sewer service, which allows the small lot sizes, could be built without forming the districts. And the districts do not create any debt for the county or allow the subdivision to ignore any county subdivision regulations.
He said the district financing for water and sewer keeps lot prices low, so home prices stay reasonable and the subdivision fills more quickly, so the county gets its tax revenue faster.
"If you look at the Houston area, probably 75 to 80 percent of the developments utilize a MUD or a WCID," Hill said. "In and around Austin and San Antonio they are used very, very little. I'm not sure why, other than it's pretty complicated if you are not familiar with it. It's a tried and proven vehicle."
Web Posted: 02/12/2006 12:00 AM CST
Roger Croteau
Express-News Staff Writer

CONTACT: Commissioner Jay Millikin
ph: (830) 221-1100
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