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Morrison likely won’t support MUD agreement

Wednesday, August 29, 2012 by Josh Rosenblatt

At least one City Council member says she will most likely vote against an interim consent agreement with the developer of the Rio de Vida Municipal Utility District (MUD) when it comes before Council on Thursday. If Council doesn’t approve the one-year temporary agreement with TXI Operations, L.P., the 2,130-acre Rio de Vida MUD in eastern Travis County will be dissolved Sept. 1.

Tuesday, after a meeting with legal staff, Council Member Laura Morrison told In Fact Daily in an email, “We clearly need to carefully weigh the risks of taking such an unprecedented step like this against any possible benefit.  It’s complicated, but if I had to vote right now, I’d vote against it.”

Staff told Council at its meeting last week that the temporary agreement is needed because the Texas State Legislature created the MUD in May 2011 under the condition that a consent agreement be reached between the city and the developer no later than Sept.1. (See In Fact Daily, Aug. 24) Unresolved litigation between the city and Southwest Water Co. over who is going to provide water and wastewater services for the MUD is currently precluding any long-term agreement.

Last Thursday, the city’s Planning and Development Review Director Greg Guernsey told Council the temporary agreement would do very little except prevent the MUD from dissolving. “It’s good faith on both sides,” Guernsey said. “It’s keeping it in place for another year. This, in essence, would allow them to be in the same position they are today for an additional period of time.”

But Morrison wasn’t convinced at that meeting that the temporary agreement was as harmless or as clear-cut as it was being presented. Last Friday, she told In Fact Daily that the “unprecedented” temporary agreement contains language that is unclear and that could get the city in trouble.

Morrison said what first caught her eye was language dealing with the governance of the MUD during the life of the temporary agreement. “Other than convening organizational meeting and conducting organizational meetings,” the clause says, “temporary Board members may not take any action without prior written approval of the City Manager or his designee.”

“The Council gets to decide what the MUDs get to do, not the city manager,” Morrison said. “I’m just concerned that when we have done MUDs with the new MUD model, they’ve been under the gun of the deadline, so we had a lot of leverage in saying, ‘We’ll consent to this but there need to be superior benefits for the community.’ So we had a lot of leverage. I wanted to make sure there wasn’t a way they were going to finagle and we lose our leverage.”

After reading that passage, Morrison said, she began noticing others that could potentially strip the city of some of its powers of self-determination and change the nature of the MUD agreement. One passage in particular that caught her eye states that city will cooperate with the developer “to avoid the duplication of processes or services in connection with the development of the Land.”

That would seem to contradict Guernsey’s statement that the agreement would only serve to prevent the dissolution of the MUD, Morrison said.

“They’re talking about us supporting waivers and approvals when they’re developing the land. That’s a contradiction: They’re talking about developing the land but they said it’s just a placeholder. Staff said it’s just boilerplate language, but I wonder what else is here where we’re not being properly protected,” Morrison said.

She went on to call one passage “metaphysically bizarre” in claiming that only the city and the developer can make the agreement effective. That’s because, she said, “this is an agreement between the city, the developer and the MUD board, but it becomes effective when only two of them sign it.” Even city staff admitted to In Fact Daily that the question of whether the temporary MUD board members appointed by the state Legislature have to (or even can) sign the agreement  for it to be effective is complicated and not entirely clear.

But Morrison’s concerns extended beyond the language of the temporary agreement to the development of the MUD itself, about which the Council has heard almost nothing so far.

“We don’t know what the MUD is going to be,” Morrison said. “I’ve gotten no briefing about it; I have no clue about what kind of community benefits and superior development it’s going to be. And the really concerning part is we’ve never done this before, in terms of this temporary board. Because I know that there’s so much at stake in terms of doing a good negotiation, I’m very concerned we might be getting into uncharted territory that has loopholes and rabbit holes and all sorts of things. It’s not cooked and I’m certainly not going to support it if it’s not cooked.”

Last week, Morrison moved not to approve the interim agreement, but Council instead voted 5-0 to postpone the item until Thursday, when staff can provide more information for members and Mayor Lee Leffingwell, and probably Council Member Bill Spelman, will be back on the dais. Both were absent during the discussion.

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