Senate Bill creates challenges with planning, wastewater use
Since Senate Bill 2038 went into effect last September, approximately 1,600 acres of land have left Georgetown’s extraterritorial jurisdiction, raising concerns over city planning and development control.
The ETJ is a buffer zone outside city limits that defines potential growth and service boundaries for Texas cities. While properties in the ETJ must comply with certain city ordinances and building codes, they do not pay city taxes or vote in city elections.
Senate Bill 2038 allows property owners to remove their land from a city’s ETJ. Those that leave the ETJ can avoid many of the development standards required in the city if they’re able to make alternative arrangements for utility service.
From a city planning perspective, Senate Bill 2038 has caused Georgetown some difficulties in estimating future service needs, as well as regulating development on the outskirts of its boundaries. In the past, cities could implement some required development standards in exchange for city services within the ETJ through development agreements. Leaving the ETJ is now an option for developers looking for flexibility.
Georgetown Mayor Josh Schroeder said he worries large developers will leave the ETJ and build projects that could adversely impact Georgetown residents.
“Some of the uses that are most frightening are the ones that are going to be willing to pay a ton of money for land to be able to do whatever they want [when they disannex] close to the cities, close to the major transportation nodes,” Mr. Schroeder said.
“We’re still going to have to serve those people. Who’s going to show up when they call 911? Who’s going to pay for the city road, because everyone leaves the neighborhood and starts driving on roads? That financial component of it is really, really scary.”
When land disannexes from the city’s ETJ, it creates a "Swiss cheese" effect, where some areas receive city services and others rely on county services, increasing inefficiencies. City Manager David Morgan said each small area the county has to cover drives up costs and makes public safety services less efficient.
“That’s a very inefficient way to provide public safety service,” he said.
The city has still negotiated with some developments over the past year to provide services.
Mr. Schroeder said some developments will proceed smoothly, and work with the city to make sure the project is a good fit for the Georgetown area.
However, Municipal Utility District developers may leave to avoid paying the city’s costs for service, since the combined burden of MUD, city, county and school taxes could make it difficult to sell future homes.
Wastewater discharge problem
Beyond SB 2038, Mr. Morgan said annexation law changes, combined with the Texas Commission on Environmental Quality granting individual wastewater discharge permits, have created new challenges for Georgetown when it comes to monitoring the city’s ETJ.
Mayor Schroeder added that the rise in wastewater discharge permits, along with uncertainty about future developments, makes the future of the ETJ unpredictable. An increase in permit applications to TCEQ — are required when treated wastewater is released into or near water sources across the state — directly affects development in the Georgetown area.
One example is a 424-unit multi-family development on Shell Road and Shell Spur, which was located in the ETJ, Mr. Morgan said. When the project failed to pass the city’s Planning and Zoning Commission, it disannexed, and the developers applied for a wastewater discharge permit.
Mr. Schroeder said if the development's wastewater permit gets approved by the TCEQ, there’s nothing the city can do to stop the development.
“People are going to start to see the impacts of these discharge permits and we’re starting to see some of that now,” he said. “Especially large landowners who have had this farm or ranch land in their families for 100 plus years are getting notices that some small time operator upstream from them is going to be dumping their wastewater in the stream and it’s going to be coming through their property.”
Additionally, the Shell Road multi-family development is near a future wastewater line that will serve residents in Georgetown. When developments pull out of the city’s ETJ after the city has already planned on providing water and wastewater to an area, it negatively impacts the rate payers in the area, Mr. Schroeder said.
“When that wastewater line is planned, we’re making assumptions on how many people are going to connect to it, how many acres it’s going to serve,” he said, “Take [the land] out of the wastewater plan, because [the developers are] not going to connect now, and what does that do to the cost of that line? It basically gets spread out over all the existing rate payers.”
The city is currently evaluating two large wastewater plants, one in the north and one in the southeast. Although still in the planning stages, their size will depend on future demand.
“You look at your water territory, you assume where your growth is in the city, you assume the wastewater impacts, you assume providing wastewater service,” Mr. Morgan said. “So therefore, you have some assumptions about future demand, and you want to size your plants well.”
Looking for change ahead
As the city prepares for the 2025 legislative session, Georgetown will advocate for bills that balance development rights with the need for planned growth, particularly in managing wastewater and zoning control over the ETJ. The upcoming 89th State Legislative Session will take place from January 14 to June 2, 2025.
Last month, city staff presented information about potential bills Georgetown would champion during the 2025 legislative session.
“Legislation that would be detrimental to our ability to plan for growth would be further changes to the city’s ETJ and the enhanced abilities of individuals to disannex from that,” said Leah Clark, Georgetown’s intergovernmental relations manager.
The city, however, will not fight SB 2038 head-on next year, Mr. Schroeder said.
He said the city sent a letter that stated the city’s opposition to the bill when it went into effect last year.
“Nobody cared,” he said. “We don’t anticipate trying to take SB 2038 head-on. We’re going to try to pick our battles and try to make a positive difference.”
Instead, Mr. Schroeder said the city is going to work on making sure TCEQ “get[s] a better handle” on wastewater discharge permits and forms a better set of rules around regionalization.
According to TCEQ’s Regionalization Guidance Document, wastewater regionalization is a consolidation of multiple service areas — like subdivisions — into a regional service facility or collection that serves a large portion of the population over a large geographic area.
“It’s not about trying to find some back door way to eliminate the impacts of SB 2038,” Mr. Schroeder said. “That’s just the right thing to do for the state, for the community is making sure we don't have some disasters on wastewater. And that’s TCEQ’s job.”
A map of the land that has disannexed from the city’s ETJ can be found at https://tinyurl.com/5s53z62e.