SUPPLYING WATER AND WASTEWATER TO NEW DEVELOPMENT

Transcription

1 SUPPLYING WATER AND WASTEWATER TO NEW DEVELOPMENT LEONARD H. DOUGAL Jackson Walker L.L.P. 100 Congress Avenue, Suite 1100 Austin, Texas (512) STATE BAR OF TEXAS 31 ST ANNUAL ADVANCED REAL ESTATE LAW July 9-11, 2009 San Antonio CHAPTER 35

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3 LEONARD H. DOUGAL PARTNER ENVIRONMENTAL AND LEGISLATIVE PRACTICE GROUP JACKSON WALKER L.L.P. 100 CONGRESS AVENUE, SUITE 1100 AUSTIN, TEXAS TELEPHONE: (512) FACSIMILE: (512) Leonard H. Dougal is a partner in the Environmental and Legislative Practice Group of Jackson Walker L.L.P. He is Board Certified in Administrative Law by the Texas Board of Legal Specialization and routinely represents clients in water law and environmental permit matters. He represents a diverse group of clients, which include special utility districts, non-profit water supply corporations, developers of new subdivisions, and energy companies. Mr. Dougal earned his J.D., with honors, from The University of Texas School of Law and earned a B.S. in Chemical Engineering, with honors, also from The University of Texas. He is a member of the State Bar of Texas, and is admitted to practice before the U.S. Court of Appeals for the Fifth Circuit and the U.S. District Court for the Western District of Texas. Mr. Dougal is a regular speaker at bar and continuing legal education seminars and has recently spoken on the following topics: Certificates of Convenience and Necessity: The Basis and Recent Developments (State Bar of Texas Changing Face of Water Rights Advanced Course, 2009) Securing Water Supplies for New Development (Austin Bar Association Real Estate Law Section, 2008) Unique Water Rights Permitting Issues (UTCLE Texas Water Law Institute, 2007) Petitions for Expedited Release How Are Incumbent Utilities Responding? (Texas Water Law Institute, 2006) Emerging Legal Issues in the Regulation and Operation of CAFOs, (American Bar Association 34 th Conference on Environmental Law, Keystone, Colorado March 12, 2005) Annual Water Availability Models Recent Developments and Legal Considerations (State Bar of Texas CLE: The Changing Face of Water Rights in Texas, 2004) Selected Texas Water Quality and TPDES Permit Issues (CLE International 13th Annual Conference Texas Water Law, 2003)

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5 TABLE OF CONTENTS I. INTRODUCTION II. CONTRACTING FOR WATER SUPPLY A. Types of Retail Water Providers Municipalities Special Purpose Districts Water Supply Corporations Investor-Owned Utilities... 3 B. Retail Water Service Areas... 4 C. Wholesale Water... 4 D. Contract Provisions... 4 III. USE OF GROUNDWATER... 5 IV. RECLAIMED WATER V. ADDITIONAL WATER SUPPLY DUE DILIGENCE VI. WASTEWATER DISCHARGE PERMITS A. On-Site Sewage Facilities (Septic Systems) B. Wastewater Treatment and Disposal... 6 VII. CONCLUSION... 7 ATTACHMENT - GROUNDWATER CONSERVATION DISTRICTS (CONFIRMED AND PENDING CONFIRMATION)... 8 i

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7 SUPPLYING WATER AND WASTEWATER TO NEW DEVELOPMENT By Leonard H. Dougal and Cassandra Quinn 1 I. INTRODUCTION. In planning for a new residential or commercial real estate project, the developer will need to determine how to provide water and wastewater services. The sources and availability of water will depend in part on the location of the proposed development. In the eastern areas of the state, water supply is still relatively abundant, while in the central and western parts of the state water is more scarce. Obtaining water may require negotiating a water supply contract with a retail or wholesale water provider, or obtaining various regulatory approvals. This paper discusses several options for securing water for a new development, including purchasing treated water from a retail public utility; obtaining raw water from a wholesale water provider, such as a river authority; using privately owned groundwater; and the possibility of substituting reclaimed water for a portion of the water that will be needed. Also discussed are methods for managing the disposal of wastewater. II. CONTRACTING FOR WATER SUPPLY. A developer will often need to enter into a water supply contract in order to arrange for the supply of water to the proposed project. Possible options include contracting directly with an existing retail water service provider to obtain treated water or creating a new retail water provider and contracting for wholesale untreated ( raw ) water. However, if the proposed development is within an existing retail water provider s certificated service area, the developer will have to contract with the existing provider, or seek to have the land decertified from the incumbent utility. This section discusses the various types of retail water providers, retail water service areas, wholesale water contracts, and typical contract provisions. A. Types of Retail Water Providers. Retail water service in Texas is provided by a variety of types of retail public utilities. 2 While these 1 The views and opinions stated in this paper are solely those of the authors and do not necessarily represent the views or opinions of Jackson Walker LLP or any of its clients. 2 For a detailed discussion of the types of retail water and wastewater service providers, see Anthony S. Corbett, What Kind of Entity is Your Service Provider and Why It Matters, 1 entities have a similar purpose to provide retail water service their structures and powers differ. 1. Municipalities. Municipalities are the most common type of retail water and wastewater service provider. They have broad statutory authority to provide water service inside and outside of their corporate limits, 3 and they are subject to limited state oversight. In general, municipalities are not subject to the TCEQ s utility regulations regarding quality of service or customer service and protection, and they are not required to file their rates with the TCEQ. However, as with all public water systems, municipalities must comply with minimum health and sanitation requirements promulgated by the TCEQ under chapter 341, subchapter C, of the Texas Health & Safety Code. 4 There is also limited state oversight of the rates and fees charged by a municipality. The TCEQ has no jurisdiction not even appellate jurisdiction over the rates charged by a municipally owned utility within the municipality s corporate boundaries. However, the TCEQ does have appellate jurisdiction over rates charged by a municipally owned utility outside of the municipality s corporate boundaries and the rates charged by an investor-owned utility operating within the municipality s boundaries.5 The initial cost of securing service from a municipality can often be greater than for other providers. Municipalities are authorized to adopt rules governing plats and subdivisions of land within their corporate limits and extraterritorial jurisdiction (ETJ). 6 Complying with these requirements, for instance by meeting fire protection and/or water quality standards, may materially increase the cost of service. 2. Special Purpose Districts. Special purpose districts are political subdivisions of the State of Texas created under Article III, Section 52 or Article XVI, Section 59 of the Texas Constitution. Texas has many types of special purpose districts, but the most common ones that provide retail water service to residential customers include municipal utility districts (MUDs), water control and improvement districts (WCIDs), fresh water supply districts (FWSDs), special utility districts (SUDs), and The Changing Face of Water Rights in Texas, State Bar of Texas (Feb. 2004). 3 See Tex. Loc. Gov t Code See generally 30 Tex. Admin. Code (TAC) Chapter Tex. Water Code (b)(2), (3). 6 Tex. Loc. Gov t Code ,.003.

8 river authorities such as the Lower Colorado River Authority and the Guadalupe-Blanco River Authority. The process for creating a special purpose district differs depending on the type of district, but in general, they may be created pursuant to general law using the steps set forth in Chapters 49 through 65 of the Texas Water Code, or by special act of the legislature. Typically, they will be granted the power of eminent domain; however, House Joint Resolution (HJR) 14, which was passed during the 81st legislative session, may make it more difficult for the legislature to grant such power, by requiring a two-thirds vote of all the members of each house in order to enact a general, local, or special law granting eminent domain. 7 The constitutional amendment proposed by HJR 14 would require approval of the voters in November election. To determine the cost of service for water from a special purpose district, the developer should consult with the district s general manager and engineer, and review the district s rules and service policies. The developer should also be aware of whether the district levies taxes. A brief discussion of the most common types of special purpose districts is set forth below. 8 a. Municipal Utility Districts. A municipal utility district (MUD) is a conservation and reclamation district governed by Chapters 49 and 54 of the Texas Water Code. Of all the special purpose districts, MUDs have the broadest statutory powers, including the authority to supply water and wastewater services, control drainage, irrigate land, provide parks and recreational facilities, enforce deed restrictions, and acquire property through eminent domain. 9 MUDs also may levy and collect taxes to finance operation and maintenance costs and pay debt service costs. 10 A MUD may be created by special act of the legislature or by filing a petition with the TCEQ.11 MUDs are governed by a five person board of directors elected by the qualified voters within the district. 12 If any portion of the MUD is within the corporate limits or ETJ of a city, the consent of the city must be obtained first. 13 If all or part of a proposed MUD is 7 Tex. H.J.R. 14, 81st Leg., R.S. (2009). 8 A list of the districts created by the Legislature is found in the Water Auxiliary Laws Pamphlet, which follows Volume 3 of the Vernon s Annotated Texas Water Code. 9 Tex. Water Code , Id Id , Id Id outside of a city s ETJ, the county in which the district is to be located may review the creation petition. 14 MUDS are primarily used by developers to finance the construction of water, wastewater and drainage infrastructure and then receive reimbursement for certain costs through the issuance of tax-exempt bonds. A MUD may finance the construction of facilities by issuing tax bonds, revenue bonds, or both. 15 They can also enter into contracts with other special purpose districts or water supply corporations (WSCs) to authorize the MUD to acquire, through the issuance of debt or other means, and convey to the other district or WSC all or part of a water supply, treatment, or distribution system, a sanitary sewage collection or treatment system, or works or improvements necessary for drainage of land in the MUD. 16 This allows the developer to use the tax bonding power of the MUD to pay for water and wastewater facilities, while allowing the other district or WSC to expand its system at no cost to its existing customers. b. Water Control and Improvement Districts. A water control and improvement district (WCID) is another type of special purpose district and is governed by Chapters 49 and 51 of the Texas Water Code. One benefit of a WCID is that in certain circumstances, it can be created more quickly than other districts. If a WCID will be located in only one county and will not provide wastewater services, it may be created by petitioning the commissioners court of the county, without the need for TCEQ approval. 17 But for the creation of a WCID with wastewater powers, or that will be located in more than one county, TCEQ approval is required. 18 A WCID is governed by a five member board of directors elected by the qualified voters within the district. It has the authority to establish fees and charges, and levy and collect ad valorem property taxes for operation and maintenance expenses and debt service costs. 19 c. Fresh Water Supply Districts. A fresh water supply district ( FWSD ) is another type of special purpose district and is governed by Chapters 49 and 53 of the Texas Water Code. An 14 Tex. Water Code Id Id Id Id , Tex. Water Code ,

9 FWSD is created by petition to the commissioners court of the county that includes the land in the proposed district. 20 TCEQ approval is not required. An FWSD is governed by five supervisors. 21 FWSDs may be created to conserve, transport, and distribute fresh water for domestic and commercial purposes. 22 By approval at an election, an FWSD may acquire sanitary sewer powers if no other public sanitary sewer system is available for the area inside the district. 23 FWSDs also have the authority to levy and collect taxes and issue bonds supported by revenue or ad valorem taxes. 24 d. Special Utility Districts. A special utility district (SUD) is a conservation and reclamation district and is governed by Chapters 49 and 65 of the Texas Water Code. A SUD is generally created by conversion of a water supply corporation, which can be accomplished by special act of the legislature or by approval of a petition to the TCEQ. 25 Advantages of converting to a SUD include the ability to issue tax-exempt bonds for financing debt, certain tort claims protection, and exemption from certain taxes. A SUD is governed by a board of directors consisting of at least five and not more than 11 directors elected by the qualified voters of the district. 26 Unlike the other districts described above, a SUD does not have the authority to levy or collect taxes. 27 Instead, a SUD must recover all of its costs of service through rates, fees and charges. Bonds issued by a SUD must be secured by a revenue pledge or a mortgage lien on the physical properties of the district Water Supply Corporations Rural areas of the state are often served by a water supply or sewer service corporation ( water supply corporation or WSC ). A WSC is a nonprofit member-owned and member-controlled corporation organized and operating under Chapter 67, Water Code, that provides potable water or sewer service for compensation. 29 While certain statutory schemes give WSCs powers similar to those held by certain political subdivisions or districts, 30 WSCs generally are not political subdivisions of the state. 31 Any three or more individuals who are citizens of the State may form a WSC by making application to the secretary of state in the same way as provided by law for an application for a private corporation. 32 A WSC is governed by a board consisting of not more than 21 directors. 33 Although they are private entities, WSCs are given statutory rights-of-way within, along, under, and across all public, state, county, city, town or village roads, highways, and rights of way, in the same manner as districts. 34 They may also acquire by condemnation any land, easements, or other property inside or outside their certificated boundaries, necessary for water or sanitary sewer, and may elect to condemn either the fee simple title or a lesser property interest. 35 WSCs do not have authority to levy taxes. The cost to obtain service from a WSC will vary depending on the extent to which facilities exist within proximity to the proposed development. A WSC may require the developer to pay an upfront capital contribution or equity buy-in fee to defray the cost of extending facilities. Unlike similar fees charged by districts, these fees are not required to meet the same standards as impact fees under Local Government Code Chapter Investor-Owned Utilities Another form of water provider is the investorowned utility (IOU), which is typically a private forprofit utility. Because IOUs seek a return on their investment, they are subject to greater regulation and oversight. For most IOUs, the TCEQ has oversight of their rates, but for utilities located within a municipality s corporate boundaries, the governing body of the municipality may provide oversight. The regulatory authority may fix and regulate rates of utilities, including rules and regulations for classifying customers and services and for determining the applicability of rates Id Id Id Id Tex. Water Code Id Id Id Id Tex. Water Code (24). 30 See, e.g., Tex. Water Code (5), (7), (3), (15). 31 Op. Tex. Att y Gen. No. GA-0111 (2003). 32 Tex. Water Code Id Id Id Id (b).

10 The TCEQ also regulates a utility s customer service policies, including grounds for refusal to serve, use of deposits, responses to requests for service, water and sewer service connections, billing, discontinuance of service, meter requirements, readings, and tests, and service interruptions. 37 The specific policies and rules of a utility are contained in its tariff, which must be filed with, and approved by, the TCEQ. The tariff will typically require contributions in aid of construction from the developer sufficient to cover the cost of the facilities required by the development. B. Retail Water Service Areas. All of the water and wastewater service providers discussed above are considered retail public utilities. 38 Certain retail public utilities must obtain a certificate of convenience and necessity (CCN) before they may provide retail water or sewer service. 39 A CCN is a permit issued by the TCEQ that authorizes and obligates a retail public utility to furnish, make available, render, or extend continuous and adequate retail water or sewer service to a specified geographic area. Typically, a retail public utility with a CCN is the sole, monopoly water or sewer service provider in the territory covered by the CCN. Some entities, such as municipalities and water districts, are not required to obtain CCNs to provide service, but they may choose to do so in order to protect their service areas from encroachment by other retail public utilities. The TCEQ maintains official CCN maps that can be consulted to determine whether there is an existing CCN. Most of these maps are now available on the TCEQ s website. If a proposed development project will be within the existing CCN of a retail public utility, the developer of the project will need to coordinate with the existing provider to arrange for service. If the project will not be within an existing CCN, the developer may search to determine whether there is a nearby retail public utility that can serve the project, or alternatively, may choose to create its own retail public utility to provide water service. Under certain conditions, a developer may seek to have its property removed from an existing provider s CCN. Section (a-1) of the Water Code authorizes a landowner with at least 50 acres that is not in a platted subdivision and not currently receiving water or sewer service to petition the TCEQ for expedited release of the land from a retail public TAC Tex. Water Code (19). 39 Id utility s CCN area so that the land may receive service from another retail public utility. 40 To use this provision, the landowner must first make a request for service to the incumbent utility, which then has 90 days in which to respond. The landowner may file a petition for expedited release if the incumbent utility: (1) refuses to provide service; (2) is not capable of providing adequate service within the timeframe, at the level, or in the manner reasonably requested by the landowner; or (3) conditions the provision of service on a payment of costs not properly allocable directly to the petitioner s service request. 41 In addition, the petitioner must demonstrate that an alternate retail public utility from which the petitioner will be requesting service is capable of providing continuous and adequate service within the timeframe, at the level, and in the manner reasonably needed or requested by current and projected service demands in the area. C. Wholesale Water. If the developer will provide water service to the development, it may still need to obtain a source of water supply. As an alternative to entering into an agreement for retail water service, a developer may have the ability to enter into a wholesale water contract, such as with a river authority. Such contracts are generally for untreated water. Thus, the developer should consider the cost of treatment, which may include constructing a water treatment plant and associated facilities. D. Contract Provisions If a water supply contract is entered into, there are several contract provisions the developer can expect to see. Minimum Charges. With respect to fees, the water provider will likely impose some sort of minimum charge. This may take the form of reserve water charges to reserve water for each single-family residential unit (or its equivalent) for the development, or a takeor-pay minimum requiring the developer to pay for a certain amount of water regardless of whether it is used. 40 Id (a-1); 30 TAC (b). For regulatory guidance pertaining to expedited release, see Preparing a Petition for Expedited Release from a Certificate of Convenience and Necessity (Oct. 2006) (Tex. Comm n on Envt l Quality), available at rg-441.pdf_ pdf. 41 Tex. Water Code (a-1).

11 Impact Fees. Water providers may also be authorized to charge impact fees, which are charges or assessments imposed against new development in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development. 42 Facility Construction. If any off-site improvements are required, the contracts may require the developer to construct such improvements to the water provider s specifications, and upon completion, to transfer them to the water provider. Term. Because of the significant investment in facilities and equipment that is usually required, water supply contracts will typically be for a term of at least 30 years. Enforceability. The developer should also consider issues of enforceability. Municipalities, special purpose districts, and river authorities are political subdivisions of the state, so they possess governmental immunity which restricts their ability to be sued. There are two components to governmental immunity: immunity from liability and immunity from suit. When a governmental entity enters into a contract, it waives immunity from liability, but not immunity from suit. Without a separate clear and unambiguous waiver of immunity from suit, the courts lack subject matter jurisdiction to hear a case. 43 For a detailed discussion of this issue, see Robin A. Melvin, Sovereign Immunity and Water Transactions, The Changing Face of Water Rights, State Bar of Texas (Apr. 2009), and Jeffrey S. Boyd, Where Sovereign Immunity and Water Development Issues Collide, 9th Annual TRWA/TWCA Water Law Seminar (Jan. 2009). III. USE OF GROUNDWATER. Depending on the location of the development, it may be feasible for the developer to drill a well and use groundwater to supply water to the project. Texas does not have a statewide regulatory program for groundwater. Instead, Texas follows the common-law rule of capture, which provides that, absent malice or willful waste, landowners have the right to take all the water they can capture from under their land without being liable to their neighbors, even if by doing so they deprive their neighbors of the water s use. 44 Thus, if the rule of capture applies to the development location, there are few restrictions on the ability to use groundwater. However, areas where the unrestricted commonlaw rule of capture applies are becoming increasingly rare in Texas. Withdrawals and uses of groundwater are now frequently governed and controlled by local groundwater conservation districts (GCDs), which are the state s preferred method of groundwater management. A map showing the location of existing GCDs is attached. GCDs have broad rulemaking and permitting authority. They may make and enforce rules for conserving, preserving, protecting, and recharging groundwater in order to control subsidence, prevent degradation of water quality, or prevent waste and to carry out the powers and duties provided by Chapter 36 of the Water Code. GCDs are also authorized require a permit for drilling, equipping, operating, or completing wells or for substantially altering the size of wells or well pumps. If the proposed development will be located within a GCD, a review of the GCD s current rules and management plan should be performed. Specific items to look for include well spacing requirements, minimum acreage requirements, and withdrawal limitations. There may also be permitting and production fees. If a developer is aware at the time of purchasing land for the project that groundwater will be used, the contract for the land purchase should account for who has the right to the groundwater, and if the property is within a GCD, whether any existing groundwater permits will be transferred. IV. RECLAIMED WATER. Another source of water to consider is reclaimed water, which is domestic or municipal wastewater which has been treated to a quality suitable for a beneficial use. 45 Reclaimed water is often used for irrigation, such as for landscaping of common areas, public parks and golf courses, and also for industrial cooling. Using reclaimed water can reduce expenses associated with purchasing water, while at the same time being beneficial from a sustainability and greenbuilding standpoint. Reclaimed water is categorized into two types: Type I, for which contact between humans and the reclaimed water is likely, and Type II for which contact between humans and the reclaimed 42 Tex. Water Code (d); Tex. Loc. Gov t Code (4). 43 Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) Sipriano v. Great Spring Waters of America, Inc., 1 S.W.3d 75 (Tex. 1999) TAC 210.3(24).

12 water is unlikely. 46 Not surprisingly, the use of reclaimed water in areas with public access will generally require the higher quality Type I reclaimed water. Prior to using reclaimed water, the provider of the water must notify the executive director of the TCEQ and obtain written approval. 47 The user of reclaimed water may be required to obtain a permit if the use poses potential or actual adverse impacts on human health, soil and groundwater resources, or aquatic life. 48 V. ADDITIONAL WATER SUPPLY DUE DILIGENCE. Confirm Availability of Water Supply. Many developers are no longer taking at face value a water supplier s claim that it can meet the development s need. To ensure that water is available, the developer may want to review the water supplier s source of supply and determine the extent of other commitments for the water. Some cities and counties will require a letter from the water supplier confirming the availability of water for the development prior to approving the plat. Review of State and Regional Water Plans. A developer may also want to review the state and applicable regional water plans to gain more information about the sources and availability of water in the area for the proposed project. VI. WASTEWATER DISCHARGE PERMITS. In addition to securing water service to a new development, the developer will need to provide for the disposal of wastewater. Many of the retail water providers discussed above also provide wastewater services, and as with retail water service, may hold a CCN for providing wastewater services. However, if an existing provider is not available, the developer still has some other options, including use of septic systems or construction of a wastewater treatment plant, each of which are discussed below. A. On-Site Sewage Facilities (Septic Systems). In rural areas, a developer will often install individual septic systems for each lot. These are referred to as on-site sewage facilities (OSSFs). A person generally must have a permit for an OSSF, although a permit is not required for tracts of land larger than ten acres so long as certain specifications are met. 49 Before the permit process can begin, the developer must submit planning materials to the applicable permitting authority. The executive director of the TCEQ is the permitting authority for OSSFs, unless a local governmental entity, such as a city, county, or special district, has adopted an OSSF order, ordinance, or resolution approved by the executive director. 50 Local permitting programs may be more stringent than state law. Using individual OSSFs for sewage disposal is typically limited to rural areas because larger lot sizes are required. If a subdivision will be served by a public water supply, the lots must be at least ½ acre; if it will not be served by a public water supply, the lots must be at least one acre. 51 Because of geographic differences in permit programs, a developer should contact the county health department or TCEQ to get site-specific requirements for OSSFs. B. Wastewater Treatment and Disposal. Another option to manage wastewater is for the developer to construct a new wastewater treatment plant and provide a method of disposal. There are limitations on where a wastewater treatment plant may be located, so the site selected for the plant should be carefully considered. 52 For instance, it generally cannot be located within the 100-year floodplain or wetlands, nor closer than 500 feet from a public water well. After wastewater is treated, it may be disposed of by discharging the treated wastewater into a state watercourse or by using some method of land application, such as surface irrigation, evaporation, or subsurface disposal. A project may also use some combination of these options. Before discharging treated wastewater into a watercourse, a Texas Pollutant Discharge Elimination System (TPDES) permit authorizing the discharge must be obtained. 53 If land application will be used, a Texas Land Application Permit (TLAP) permit is required. To obtain either of these permits, a domestic wastewater permit application must be submitted to the TCEQ. The application and instructions for completing the application are available from the TCEQ s website TAC Id. 46 Id (31), (32). 47 Id Id TAC See 30 TAC , Tex. Water Code ,.121.

13 Construction of the water treatment facility cannot begin until after the appropriate permit is obtained, unless the TCEQ agrees otherwise. 54 Notice of a wastewater permit application must be provided to neighboring property owners and to landowners within one mile downstream (in the case of a discharge permit). Affected persons, which are persons with a justiciable interest related to a legal right, duty, power, or economic interest, 55 may request a hearing on a TPDES permit. The TCEQ may consider a variety of factors in determining whether a person is in fact affected, but as a general matter, the TCEQ requires a person to reside at or own property adjacent to the facility, or if there will be a discharge into a state watercourse, to reside at or own property within one mile downstream of the proposed point of discharge for the facility. If a permit is granted, it will specify the duration of the permit, location of the point of discharge, maximum quantity of waste that may be discharged at any time, character and quality of waste that may be discharged, and monitoring and reporting requirements.56 VII. CONCLUSION. Securing water and wastewater service is an important aspect of planning for new development. If an existing water or wastewater provider holds the CCN for the project location, the developer will often desire to contract with the existing provider, but the cost of service can vary significantly depending on the specific type of retail public utility at issue. If an existing provider is not available, the developer may be able to create its own retail public utility, but will need to find a source of water supply such as wholesale untreated water. Other options to consider include using groundwater or reclaimed water as sources of supply. As for wastewater services, a developer may choose to install septic systems or construct a new wastewater treatment plant and provide an appropriate method of disposal. Because of the variety of possible options, a developer will need to perform due diligence to determine which one is most appropriate for the specific project. 54 Id (c). 55 Id ; 30 TAC (a). 56 Tex. Water Code

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