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June 16, 2013

Developers talking purchase of city water

Developers behind a major residential community project planned for southern Hunt County are scheduled to meet next week.

The Sunrise Municipal Utility District (MUD) will buy the water it needs for a proposed reservoir from the City of Greenville. The district’s board of directors is set to convene for a regular session at 5:45 p.m. Wednesday at 8200 Douglas Avenue, Suite 300, in Dallas.

Among the items to be considered during the meeting is the status of an application with the Texas Commission on Environmental Quality (TCEQ), requesting approval of the proposed dam and reservoir project, including the purchase of raw water from the City of Greenville.

The Greenville City Council Tuesday approved an ordinance in March of last year to sell raw water to the district, to fill a new lake to be built as part of the project.

At that time, Director of Public Works Massoud Ebrahim said the city had been approached by The Huffines Group/Sunrise Municipal Utility District, which asked the city to supply between 2.5 and 3 million gallons of raw, untreated water annually for the purpose of filling and maintaining a reservoir for recreation and irrigation use.

In 2006, as part of the agreement for the proposed Cobisa power plant project, the Council approved a contract with the Sabine River Authority (SRA), which granted the City of Greenville the right to obtain up to 23 million gallons per day of raw water from Lake Tawakoni. The City of Greenville typically only uses between 4 and 8 million gallons daily.

Ebrahim explained the city had to receive permission from the SRA in order to resell the water to another community, adding that the contract calls for the same “take or pay” requirement the City of Greenville operates under with the SRA.

In other words, the Sunrise MUD will have to pay the city for the water, even if it doesn’t use it. The development also pays the city an option of $25,000 per year for the first three years of the contract.

The City of Greenville pays 10 cents per 1,000 gallons of water. It will sell the water to the developers at 35 cents per 1,000 gallons.

Ebrahim estimated the amount paid to the city would range between $100,000 and $160,000, depending on the final layout of the planned development and what amenities are included.

The Sunrise MUD proposes to develop 1,900 acres, located 6.5 miles west of Lake Tawakoni and west of Quinlan, on property which used to be known as the Cullen Ranch.

The development plan calls for 656 residential lots, a 48 acre commercial development, a 298 acre golf course and the 350 acre lake.

The Huffines Group has been behind several major projects in North Texas, including two developments along U.S. Highway 380 — Savannah and Providence — which now have more than 5,000 residents each, and the Verandah subdivision which is being developed along Interstate 30 near Royse City.

A municipal utility district is a tool used by developers in Texas to provide for infrastructure needs in residential and commercial subdivisions. Municipal utility districts are able to sell bonds, then assess a tax on individuals living within the district to be used to pay off the bonds.

The Sunrise Municipal Utility District was approved by voters five years ago and would be developed generally south of State Highway 276 and east of Farm-To-Market Road 1565.

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