The Legislative Budget Board in cooperation with the4 Water Development Board (TWDB) and Texas Commission on Environmental Quality (TCEQ), has determined the following:

Subject to a confirmation election, the bill would create The Lakes Fresh Water Supply District in Denton County with the powers and duties of Water Code Chapters 49, 53, and 54 related to general law Fresh Water Supply Districts.  The bill appears to give the proposed district additional powers:  those of a Fresh Water Supply District and eminent domain.

1) Population- Staff has not been able to make a population estimate for the proposed district due to the complexity of the boundary descriptions.  The population projections to be used in the 2006 Region C Water Plan for the rural, unincorporated potions of Denton County show an increase from 21.332 in 2000 to 34,643 in 2010.

2) Location & Size- The proposed district encompasses 411 acres in northeast Denton County along Farm to Market Road No. 2931.  Placement along FM 2931 would be within the Certificate of Convenience and Necessity area for Mustang Water Supply Corporation (WSC).

3) Powers- The District will have the general powers and duties granted to municipal utility districts under Texas Water Code Chapters 49, 53, and 54.

4) District Finances- The District may impose a tax for any District operation and maintenance purpose and to pay the principal of and interest on bonds. The District may pay out of bond proceeds all expenses related to obtaining a new certificate of convenience and necessity under Chapter 13, Water Code.

5) Board of Directors- The bill appoints five temporary directors. Subsequent directors will serve four year staggered terms.

6) Eminent Domain- The District has the power of eminent domain.

7) Ability to Tax- The District must have the approval by a 2/3 majority of the voters to issue any obligation to be secured with ad valorem taxation.

8) Ability to Exclude Property- Same as general law MUDs, the District has the power to exclude property.

9) Overlapping Services- An adequate boundary description and location map were not provided for the proposed District. Therefore, an overlap check could not be performed.

10) Adequacy of Boundary Description- The boundary description has been reviewed and forms an acceptable closure.

11) Comments on Powers/Duties Different from Similar Types of Districts- The District has the power to construct, acquire, improve, maintain or operate roads. Road projects must meet only the standards adopted by the North Central Texas Council of Governments. The District may also construct, acquire, improve, enlarge, extend, repair, or maintain any facility necessary to control, store, or preserve water in the District for any useful purpose. Any bonds or other obligations for road projects must be approved by a 2/3 majority of voters and cannot exceed 1/4 of the assessed valuation of property in the District.

12) TCEQ’s Supervision- As with general law districts, the TCEQ will have general supervision authority, including bond review authority and review of financial reports.

13) State Water Plan Objectives-Water Use: Within Denton County, only 16 percent of the total water use was groundwater (Trinity Aquifer) in the year 2000.  However, 84 percent of the groundwater use was for municipal purposes.  The Mustang WSC has historically obtained its water from groundwater wells, although in 2001, the WSC reported obtaining approximately 12 percent of its water from the Upper Trinity Regional Water District.