McKinney officials have been planning for future growth through the Northwest Sector Study in 2015 and the updating of the city’s comprehensive plan, known as McKinney 2040. Although the plans outline how the city hopes to build out in the future, the county is not required by state law to adhere to those plans within the city’s ETJ, which leaves McKinney with very little regulatory control in those areas unless the property is annexed.
Last spring the city annexed almost 675 acres of land near FM 543 and US 75. Although the annexation brought hundreds of acres under the city’s regulatory control, it also brought in a developing RV park that landed the city in the first of two court-ordered three-way lawsuits among a landowner, the city and Collin County that were filed in late November. The city and county will be spending tax dollars to cover legal costs of the lawsuits.
“Essentially, the city has sought on multiple occasions short of litigation to have this dialogue [with the county] for the benefit of McKinney residents as well as those who live in the extraterritorial jurisdiction of the city,” Mayor Brian Loughmiller said.
County and city officials said the cases could set legal precedence for home rule cities and permitting rights and could go as far as the Texas Supreme Court.
Collin County Judge Keith Self said the county will defend private-property rights of county residents within unincorporated areas of the county.
“The reason that there is no zoning in the unincorporated part of the county is because those people who move there want the freedom to do as they choose out there with minimal ordinances,” he said.
In 2001, state legislators passed House Bill 1445, which mandated cities and counties establish written agreements designating authority to regulate subdivisions and issue “other related permits” within the city’s ETJ. In 2002, the city of McKinney and Collin County signed an interlocal agreement giving that authority to the city. [totalpoll id="204009"]
Since then, the city and county have maintained their respective jurisdiction with little argument until 2015 when the county issued permits to Arch Resorts, which is an RV park, and Custer Storage & Business Center, which were both located in McKinney’s ETJ.
Although multiple tenants would be utilizing the properties, neither was subdivided the way a neighborhood traditionally would be, which has led to a debate between the city and county over which entity has permitting rights.
“The application of subdivision authority is based on an analysis of when a property owner subdivides, or creates multiple lots or parcels, or extends or builds or extends utilities to a site,” Loughmiller said. “Any of these can trigger application of the city’s subdivision authority.”
The city contends that in relation to subdivisions it has the inherent authority to require developers in the ETJ to obtain city building permits, inspections and approvals, and pay related fees. The city also contends the county exceeded its authority by issuing building permits to the two properties and as a result “significantly impaired” the city’s lawful authority to regulate development in its ETJ.
The county, however, states that the city’s subdivision permitting rights kick in when a landowner files to legally subdivide its property to more than one owner.
County Commissioner Chris Hill said the city had multiple tools to preserve the future land use of the properties, including developing an agreement with the landowners, annexing the property or—in the Arch Resorts case—by purchasing the property when it was for sale using funding from the McKinney Economic Development Corp.
“The city of McKinney would like the county to acknowledge authority that the city doesn’t have and relegate authority the county doesn’t have,” Hill said. “The county has chosen to obey the law and respect private property rights even if the city refuses to.”
Self said if McKinney wanted more control of the land, the city should have annexed the property earlier.
The Arch Resorts lawsuit began when property owners sued the city on May 29, 2015, in the 366th District Court. The city added the county to the lawsuit when the presiding judge ordered the city to either amend its pleadings or add the county as a third party in the lawsuit.
The Custer Storage & Business Center lawsuit began when the city filed a suit against the property owners September 4, 2015, in the 401st District Court. The city added the county to the lawsuit when the presiding judge ordered the city to either amend its pleadings or add the county as a third party in the lawsuit.
Setting a precedent
Discussions over ETJ permitting issues between home rule and general law cities and their counties have taken place across the state.
According to the Texas Local Government Code found within the Texas Constitution, a home rule city such as McKinney operates under a city charter that has been adopted or amended as authorized by the Texas Constitution. Home rule cities can pass ordinances not otherwise inconsistent with state law. A general law city does not have a charter and is limited to the powers granted to it under state law outlined in the TLGC.
When McKinney’s debate with the county began in mid-2015, 13 mayors across Collin County signed a letter stating the county’s issuance of permits within the ETJs of both home rule and general law cities has a detrimental impact on local cities because the county has limited ability to enforce building, fire and construction-related permits.
The purpose of the June 2015 letter, the cities said, was to encourage Collin County commissioners to work with the county’s cities to develop processes that will allow cities to issue permits within their ETJs. Following the letter, Loughmiller asked the county to discuss the issue with cities.
“I was advised at that time by the [Commissioners Court] that the matter would have to be resolved either by legislation or through the courts due to the difference in interpretation of the term ‘other related permits’ in the government code,” Loughmiller said.
Other cities in Texas have found themselves in a similar situation. In March, the Texas Supreme Court set a precedent for general law cities and their permitting rights when it ruled in Bizios V. Lakewood Village that general law cities do not have permitting rights within their ETJ.
According to the Texas Judicial Branch, the dispute centered on the construction of a home worth more than $1 million in the city’s ETJ. The landowner refused to obtain a permit from Lakewood Village and instead obtained one from the county. The city asked the court to force the owner and builder to comply. But the court ruling did not endorse the city’s request because it said the Legislature had not expressly granted permitting authority to general law cities.
Both city and county officials said McKinney’s case could set a precedent for home rule cities the way the Bizios case did for general law cities.
While the case moves through the court system, owners of Arch Resorts must wait before they finish construction and open their business. The Custer Storage & Business Center opened in October 2015.
Loughmiller said it is probably going to be a long time before the city is able to annex the rest of its ETJ.
“Ultimately it would be very expensive, and you can’t annex property that’s not adjacent to something that’s already annexed,” he said.
The city has been pursuing some voluntary annexations in recent years, working to slowly incorporate thousands of acres still located within its ETJ.
During the Nov. 1 City Council meeting, the council discussed potentially annexing two properties, one along Custer Road and the other along US 380.
City officials said the US 380 annexation would secure commercial properties along the roadway. Eight homeowners would be included in the annexation. Several of the residents spoke against the annexation, and the council voted to hold off on the annexations until an agreement with the homeowners could be reached.