CCNs & SDs

Question Answer
CCN Certificate of Convenience and Necessity
CCNs are issued by TCEQ
CCNs confer exclusive right to water and/or wastewaster
CCNs obligate holder to provide continuous and adequate service to those in the area
Intended purpose of CCNs (1) consolidate scattered developments under single provider thus planned infrastructure, (2) eliminate comp and overlap (3) security for investment (3) lower costs to consumers (4) further reach than cities
Issues of CCNs (1) no landowner notification (2) lack of resources (3) landowners and development placed in tough spots (4) difficult to decertify CN holders (4) city tool to block special districts beyond ETJ
Attempts to decertify CCNs are time consuming and uncertain
Cities can use CCNs to extend beyond ETJ to block Special Districts
Special Districts local govt entity that provides limited services (usually utilities) — also a financing tool for tax-exempt rates
Categories of Districts PID, Water (13 types)
PID Public Improvement District
Water District – most commoon MUD. Water Control and Improvement District (WCID), Fresh Water Supply District (FWSD)
PIDs are created by city or county for the purpose of funding public improvements (govt unit)
PIDs can be used for improvements ranging from roads, utilities, parks, street lights, landscaping
PIDs are funded by assessments based on size, front feet, etc in terms of benefits of improvements
PIDs are created by petition from landowner
City process in PID creation Team assessed to study; notices to residents and hearings; city/county ordinance; approval of debt issue;
Debt w/in a PID is an obligation of the property w/in the PID (NOT THE CITY)
Failure to pay PID assessments could lead to Foreclosure
PID assessments are annual, can be paid anytime by property owners
PID strengths Easy to set up; specific use financing
PID weaknesses Not efficient for multiple projects; not designed for long term projects, political liability for city

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