At its April 8 meeting, Bastrop City Council approved development, utility, and wastewater agreements for the Ironwood project, clearing the way for the nearly 290-acre project to move forward under a unique agreement that guarantees eventual incorporation into the city.
Current situation
The Ironwood Development, located across the city’s unincorporated areas, will include single-family and multifamily housing, along with public parks and other community amenities.
As part of the agreements, the developer, W Land Development Management LLC, will create a municipal utility district, Bastrop County MUD No. 5, to fund water, wastewater and drainage infrastructure.
A municipal utility district, or MUD, is a special-purpose district to fund the costs of development in unincorporated areas.
Since MUDs are not part of the city limits, residents typically do not receive city services, such as trash pickup or police services, and instead rely on county or private services.
Unlike similar MUDs such as The Colony, which is located outside the city’s jurisdiction and generates no tax revenue for Bastrop, Ironwood’s developers have committed to annexation into the city once the MUD debt is paid off.
Since the passing of Senate Bill 2038, which gave landowners the ability to remove their property from a city's extraterritorial jurisdiction, Texas has seen an increase in MUD formations.
Before this legislation, developers building in unincorporated areas were often required to enter into development agreements with cities.
Zooming in
Bastrop City Manager Sylvia Carrillo-Trevino said the development agreement is the "first of its kind" for Bastrop.
“Once the MUD debt is completely paid off, all of that comes back into the city,” Carrillo-Trevino said. “The Colony is outside of the city’s jurisdictional limits ... and therefore while we may show up through shared use agreements ... we don’t collect any city taxes for that.”
Carrillo-Trevino said the city’s portion of the MUD tax rate will be $0.13, and at total build-out, the agreement is projected to bring in approximately $597,282 in revenue for the city—compared to zero—had the MUD remained outside city limits.
“At some point, perhaps 7 to 10 years, the city may annex this,” Carrillo-Trevino said. “However, we’d have to revisit where the MUD debt is at that point ... [if] we work in partnership, there are line extensions that serve a much-needed area.”
According to city documents, the council also estimated the development would contribute $10.6 million in wastewater impact fees and $6.7 million into the water fund, based on 1,300 living unit equivalents, or LUEs, which is a standard measure that reflects the utility demand of a typical housing unit.
Council also approved the transfer of wastewater service for approximately 96 acres from Aqua Water Supply Corporation to the city, finalizing an agreement first made in Sept. 2023.
The development agreement also guarantees at least 50 acres of public parkland, with additional land reserved for private HOA park spaces.
What’s next?
The Ironwood project can now move forward with infrastructure planning and MUD formation, and the developer will be responsible for installing all utilities and infrastructure, which will eventually be turned over to the city.
The timing for full annexation into city limits will depend on the repayment of MUD debt obligations, which is a process that could take several years, but the agreement ensures the City of Bastrop will ultimately assume full jurisdiction over the area.
