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

The bill creates Cottonwood Municipal Utility District No. 2 of Grayson County (District).   

1)  Population –The very specific description of the proposed boundaries is in terminology that does not match Census geography, thus population can be estimated only for an area somewhat larger than the district will actually cover. Population in this larger area, of which this district will only be a part, could be as high as 3,099 based on the 2000 Census.

Population growth in that specific area since the 2000 census is unknown; however, the proposed district is in close proximity to the cities of Howe and Sherman in central Grayson County.  Based on the 2011 Region C Water Plan, the City of Howe is projected to grow from 2,478 in 2000 to 3,000 in 2010 and 4,500 in 2020.  The City of Sherman is projected to grow from 35,082 in 2000 to 39,300 in 2010 and 44,400 in 2020.  Grayson County is projected to grow from 110,595 in 2000 to 126,099 in 2010 and 152,028 in 2020.

2)  Location – The proposed district’s initial boundaries are described in a combination of Original Texas Land Surveys and metes and bounds.  Due to the complexity of these boundaries for the various sub-areas of the district, staff is able to determine only the general location of the proposed district.

The district’s area is approximately 1.3 square miles, and will be located in central Grayson County, southwest of Sherman between Howe and Dorchester, near Farm to Market Road 902.  The district overlaps portions of the CCN held by the City of Dorchester and is possibly also within the boundaries of City of Howe and City of Sherman CCNs.

3)  Comments on Powers/Duties Different from Similar Types of Districts - The bill specifies that the District may not hold an election to confirm the District or elect the five permanent directors until all municipalities in which the District is located consent to the creation.  The bill specifies that the District may be included in a tax increment reinvestment zone created by the City of Dorchester.  Current statutes require directors of districts to meet eligibility requirements.  The bill specifies that on or after September 1, 2011, the owner or owners of a majority of assessed valuation of the real property within the District may submit a petition to the TCEQ for the appointment or re-appointment of the five temporary directors for the District and that the TCEQ shall appoint the five persons named in the petition, regardless of eligibility.  The bill gives the District road powers.  Current statute does not permit a municipal utility district to exercise the power of eminent domain outside the district boundaries for certain purposes.  The bill further limits the District's power of eminent domain by specifying that the District may not exercise the power of eminent domain to acquire a site for a road or recreational facility.  The bill also specifies that if bill does not receive two-thirds vote of all members elected to each house, then the District may not exercise the power of eminent domain.  Current statutes only allow water control and improvement districts and certain fresh water supply districts to divide.  The bill specifies that the District may divide if the District has never issued any bonds and is not imposing ad valorem taxes and that municipal consent to the creation of the District acts as municipal consent to the creation of any new district created by the division of the District.

4)  Overlapping Services - The stated boundaries for the District form an acceptable closure.  However, an area map containing at least two reference points (major road names, road intersections) and the District’s geographic location mapped within Grayson County is needed to complete overlapping services check.   

The District may overlap the City of Dorchester (CCN No. 12013), City of Sherman (CCN Nos. 10203 and 20076), City of Howe (CCN No. 11011), Red River Authority of Texas, Greater Texoma Utility Authority, Choctaw Watershed Water Improvement District, and Kings Crossing Municipal Utility District. 

5)  TCEQ Supervision - As with general law districts, the TCEQ will have general supervisory authority, including bond review authority and review of financial reports.

6)  Water Use – HB 3803 specifies that “The district has the powers and duties provided by the general law of this state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution.” Therefore, it appears HB 3803 would serve to accomplish the conservation and development of natural resources, including the control, storing, preservation and distribution of storm and flood waters, the waters of rivers and streams, for irrigation, power and all other useful purposes, among other duties specified in Section 59, Article XVI of the Texas Constitution. 

Within Grayson County, fifty-four percent of the total water use was groundwater (Trinity, Woodbine, and Other aquifers) in 2008.  Eighty-nine percent of the groundwater pumping was for municipal use. The water source that the district might pursue is unknown.