San Antonio, February 7, 2026
The San Antonio City Council has unanimously voted against the creation of a Municipal Utility District (MUD) that would fund infrastructure for the controversial Guajolote Ranch development. This decision addresses community concerns about potential environmental impacts on the local water supply, particularly the Edwards Aquifer. Despite this setback for the developer, options to proceed with alternative financing remain. Council members highlighted the significance of safeguarding water quality and the implications of imposing taxes on future homeowners.
San Antonio City Council Rejects Utility District for Guajolote Ranch Development
San Antonio, Texas – On February 5, 2026, the San Antonio City Council unanimously voted against granting consent for the creation of a Municipal Utility District (MUD) for the proposed Guajolote Ranch development in northwest Bexar County. This decision blocks a financial mechanism that would have funded infrastructure, including an on-site wastewater treatment plant, for nearly 3,000 homes near the Edwards Aquifer contributing zone.
Details of the Decision
The proposed Bexar County Municipal Utility District No. 2 aimed to finance approximately $150 million in infrastructure improvements for the 1,160-acre project near Scenic Loop Road and Babcock Road. These costs would have been repaid through property taxes, assessments, and bonds paid by future homeowners within the district. The council’s vote followed an hour of public comment and discussion centered on water quality risks, long-term tax implications, and doubts over safeguards proposed by the developer and San Antonio Water System (SAWS).
Potential Impact on Development
City staff emphasized that denying the MUD would not halt the development. The developer, Lennar Corp., can petition for a wastewater service agreement through SAWS. If no agreement is reached within 120 days, Lennar may seek approval from the Texas Commission on Environmental Quality (TCEQ) to create a district independently. However, TCEQ has historically denied only one municipal utility district application in the past 20 years, and that denial was due to an issue with the application itself, not environmental concerns.
Council Members’ Concerns
Council members expressed concerns over the potential risks to San Antonio’s primary drinking water source. District 5 Councilwoman Teri Castillo highlighted the threat to water quality, emphasizing the inability to create more water and the impact of contaminants on overall health. District 9 Councilwoman Misty Spears criticized the structure of municipal utility districts, noting the creation of a separate government with little city oversight and the imposition of taxes on future homeowners without their consent.
Background Context
The Guajolote Ranch development has been a contentious issue in San Antonio due to concerns over its potential environmental impact on the local water supply. In October 2025, the TCEQ approved a wastewater treatment plant permit for the development, allowing the discharge of up to 1 million gallons of treated effluent per day into a normally dry creek bed upstream of Helotes Creek. Opponents argue that the Helotes Creek watershed sits atop fractured karst limestone, where water can move rapidly underground into both the Trinity and Edwards aquifers, potentially contaminating the water supply. A 2020 Southwest Research Institute study commissioned by the city found that additional wastewater systems in the Helotes Creek watershed would “significantly degrade” the quality of water recharging the Edwards Aquifer. Despite these concerns, Lennar insists that the wastewater treatment will comply with environmental safety standards. The Scenic Loop-Helotes Creek Alliance, a key group opposing the development, has filed a lawsuit challenging the TCEQ’s approval of the wastewater permit, seeking judicial review. The outcome of this legal challenge remains pending.
Next Steps for the Developer
With the council’s denial of the MUD, Lennar Corp. faces challenges in financing the necessary infrastructure for the Guajolote Ranch development. The company can pursue a wastewater service agreement with SAWS or seek approval from TCEQ to create a district independently. The developer’s next steps will depend on the outcomes of these negotiations and legal proceedings.
Community Response
The decision by the San Antonio City Council reflects the community’s concerns over the potential environmental impact of the Guajolote Ranch development. Residents and environmental groups have been vocal in opposing the project, citing risks to the Edwards Aquifer and the quality of the local water supply. The council’s vote is seen as a victory for those advocating for the protection of San Antonio’s water resources.
Conclusion
The San Antonio City Council’s unanimous rejection of the MUD for the Guajolote Ranch development underscores the community’s commitment to safeguarding the Edwards Aquifer and the city’s water quality. While the development may proceed through alternative means, the council’s decision highlights the importance of environmental considerations in urban planning and development.
FAQ
What is a Municipal Utility District (MUD)?
A Municipal Utility District (MUD) is a special government-like entity created to provide essential services, such as water, wastewater, and drainage, in developing areas outside city limits. It allows developers to finance infrastructure through bonds, which are repaid by taxing residents within the district.
Why did the San Antonio City Council reject the MUD for Guajolote Ranch?
The council rejected the MUD due to concerns over potential risks to San Antonio’s primary drinking water source, the Edwards Aquifer. Issues included water quality risks, long-term tax implications, and doubts over safeguards proposed by the developer and San Antonio Water System.
What are the next steps for the Guajolote Ranch development?
With the council’s denial of the MUD, Lennar Corp. can petition for a wastewater service agreement through San Antonio Water System (SAWS). If no agreement is reached within 120 days, the developer may seek approval from the Texas Commission on Environmental Quality (TCEQ) to create a district independently.
What is the Scenic Loop-Helotes Creek Alliance?
The Scenic Loop-Helotes Creek Alliance is a nonpartisan, nonprofit organization representing the largest neighborhood by square mile recognized by the San Antonio Neighborhood & Housing Services Department. The alliance has been actively opposing the Guajolote Ranch development due to concerns over its potential environmental impact on the local water supply.
What is the status of the legal challenge against the TCEQ’s approval of the wastewater permit?
The Scenic Loop-Helotes Creek Alliance has filed a lawsuit challenging the TCEQ’s approval of the wastewater permit for the Guajolote Ranch development, seeking judicial review. The outcome of this legal challenge remains pending.
Key Features of the Guajolote Ranch Development
| Feature | Description |
|---|---|
| Location | Northwest Bexar County, near Scenic Loop Road and Babcock Road |
| Size | 1,160 acres |
| Proposed Homes | Approximately 2,900 |
| Infrastructure Financing | Proposed Municipal Utility District (MUD) for $150 million in infrastructure improvements |
| Environmental Concerns | Potential risks to the Edwards Aquifer and local water quality due to wastewater discharge |
| Legal Challenge | Scenic Loop-Helotes Creek Alliance filed a lawsuit challenging TCEQ’s approval of the wastewater permit |
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Author: STAFF HERE SAN ANTONIO WRITER
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