The billion dollar question

Future residents in developments along FM 2931 in Aubrey’s extraterritorial jurisdiction, including Silverado, will have roughly $1 billion in water district debt to pay back.

Five people voted on four propositions about debt The Lakes Fresh Water Supply District is approved to take on. Three of them participated in early voting: Caden Kirk Ainsworth, Damon Kirk Ainsworth and Sarah Katheleen Freeman.

DR Horton did not respond to a request for comment.

A Damon Ainsworth is listed on LinkedIn as a land development project manager at DR Horton, the builder developing the land.

Silverado is a new housing development just north of Providence Village on FM 2931, the first phase of which is under construction. At least 3,000 homes are proposed to be built in a 10-year buildout.

Mark Kaiser, the Aubrey city administrator, said the City of Aubrey has no jurisdiction over the water districts in its extraterritorial jurisdiction.

He said the city initially had an annexation agreement that would have required the development then known as Regatta to be annexed upon first development, which was reached in December of 2012. An amendment was made in September 2016, however, which waived that requirement for immediate annexation after the developer indicated it was not interested in voluntary annexation at the time, Kaiser said. That amendment was passed in a 4-1 vote, with Deborah Goin voting no. Instead, a clause in the developer’s agreement states that the property will be annexed in 15 years.

The Lakes Fresh Water Supply District covers at least 1,000 acres, Kaiser said.

Starting 15 years after the effective date from when annexation was accepted, the city can annex the property at any time. The effective date was Dec. 20, 2012, Kaiser said.

Had the city annexed the property, the development would have been brought into the city, which would have been the sole governmental entity.

"When we annex, then the water district would no longer be involved," Kaiser said.

There are many developers working on projects both within Aubrey and in its extraterritorial jurisdiction.

"We are trying to work with all developers along with the county and within the state of Texas regulations to figure out how we can continue to address the needs of the developers and the citizens," Kaiser said. "It's an ongoing process."

And the city doesn't have as much say as Kaiser would prefer.

"The state's the ones calling the shots and restricting local government's control over some of these issues," Kaiser said.

Local government officials, including Denton County Commissioner Hugh Coleman and Providence Village Mayor Pro Tem J. Eric Newton, have publicly made statements saying they are frustrated by the continued use of this practice in the area.

“This additional layer of nontransparent government is going to saddle the residents of that area with … between $240,000 to $280,000 in debt per house that anybody who owns it would have to pay off within a span of 20 to 30 years,” Coleman said to thePost-Signal.

The propositions are to help fund infrastructure such as water and sewage in the water district's jurisdiction. Those types of projects are usually “built into the cost of the house," Coleman said.

He said he's not opposed to special purpose districts, as they have a place in existing communities to supply infrastructure, he said, but he does not agree with using them to create a new development.

Only nine people were registered to vote, but there is active construction on homes underway in the Silverado development.

"If they would have waited, there probably would have been additional people in there," Coleman said.

Newton pointed out to the public that Providence Village got its start in a similar manner, with the bond debt there being less than $50 million for less than 2,500 planned houses.

“It's something that is a fault with this state, in how they allow water districts to be created by developers and to issue bonds for the sole purpose of increasing their profit margins,” Newton said.

Hector Valenzeula, a Providence Village resident, recently signed a contract to build a home in the new development. He said he was worried at first.

“We’ve gotten clarification from the builder, and DR Horton is the developer there,” Valenzula said. “It’s all included in our taxes already, that 1 percent that they were charging us for The Lakes Fresh Water Supply District.”