Property owners in Fort Worth’s extraterritorial jurisdiction are increasingly petitioning to be released from city oversight.

About 3,000 acres outside city limits have been released as Fort Worth complies with Senate Bill 2308, which went into effect Sept. 1, 2023. 

The law allows property owners to be immediately released from a city’s extraterritorial jurisdiction — when a city extends its legal power beyond its boundaries — simply through a valid petition signed by 50% of registered voters among landowners in a contested area.

Assistant City Manager Dana Burghdoff testified to the Texas Senate Committee on Local Government Sept. 5 about the effects of the bill. Over the past year, portions of Tarrant, Johnson, Parker and Denton counties have been released by Fort Worth. 

Fort Worth still has 169,297 acres in its extraterritorial jurisdiction after 89 acres were released earlier this year, city spokesperson Natalie Foster said.

Some developers believe Senate Bill 2308 is an “overall good thing” that allows them to move building and housing projects along at a faster speed. 

“Time is money,” said Travis Clegg, director of land for Grapevine-based Westwood Professional Services and a member of the city’s developer advisory committee. “Some of these cities are offering incentives. They’ll say something like, ‘We’ll bring you water immediately.’”

Projects that would take years to develop are happening sooner under the new law since there are fewer regulations that developers must adhere to, Clegg said. Land in rural areas is cheaper, allowing developers to purchase large tracts for developments.

The law’s impact led the city of Grand Prairie to initiate a lawsuit challenging its constitutionality. More than a dozen cities, including Lockhart, Navasota and Hutto, joined the lawsuit — a reason why the Senate committee is now examining the issue, as many cities are awaiting the outcome of legal proceedings on the matter while ignoring or delaying implementation of the law, committee chair Sen. Paul Bettencourt, R-Houston, said.

Some cities are delaying implementation of the law because of the lawsuit, said Howard M. Cohen, a partner with Houston-based Schwartz, Page & Harding, which specializes in public finance, local government law districts and municipal utility districts.

“There is stalling of development” as uncertainty about the bill remains, Cohen said.

Burghdoff, who oversees Fort Worth’s development services, fire and property management staff, said the city has modified its extraterritorial jurisdiction, or ETJ, boundaries as a result of the law.

During her testimony to the committee, Burghdoff and other municipal and county officials recommended an exemption to the law regarding the use of Certificates of Convenience and Necessity. Such permits are issued by the Public Utility Commission of Texas to grant a utility a geographic monopoly for providing services such as water to an unincorporated area.

She said the law complicates long-range infrastructure planning efforts by fast-growing cities such as Fort Worth, now the nation’s 12th largest city. She said Fort Worth could face financial risks if it regulates water utilities within its ETJ. 

Burghdoff said the city is planning to spend hundreds of millions on water infrastructure over the next five years to accommodate growth. Although many of the ETJ petition requests are outside of the city’s Certificate of Convenience and Necessity area, costs and services for the utility could be affected.

“Some folks will end up being on groundwater (utilities), especially Parker County,” she said, referring to growth west of Fort Worth. 

Fort Worth has agreements to provide water and sewage service to many local developments, including Walsh Ranch, which extends into Parker County. Fort Worth also provides water to some municipal customers in Parker County, Burghdoff said.

By 2100, the Parker County city of Aledo, home to more than 5,800 residents, is expected to be the population center of the region, Fort Worth Mayor Mattie Parker said during an Aug. 29 Fort Worth Report event on transportation issues. In August, the University of Texas at Arlington announced plans to purchase 51 acres in Walsh and build a campus to serve more than 10,000 students.

Senate Bill 2038 will disrupt the uniform application of limited regulations within city extraterritorial jurisdictions, according to the Texas Municipal League. 

“Most notably, released areas will no longer be subject to applicable subdivision and platting regulations or sign regulations,” said the agency, which provides services to 1,177 Texas cities. “Cities also will lose the ability to participate in the establishment of certain special purpose districts, like municipal utility districts, in areas that are released from the ETJ.”

Municipal development districts and public improvement districts that included areas within the ETJ also are affected. 

“Cities have lost the limited authority they used to have in those areas,” said Bill Longley, general counsel for Texas Municipal League.

Burghdoff suggested to the Senate committee that an exemption to the Senate Bill 2308 be made regarding military installations. The law does not allow automatic property releases within 5 miles of bases such as the Naval Air Station Joint Reserve Base Fort Worth. However, the law has a special exemption that increases the 5-mile limit to 15 miles for bases in the San Antonio and Houston areas.

“My point is, we have flight training and operations in Fort Worth,” Burghdoff said.

About 1% of land under Fort Worth’s extraterritorial jurisdiction has been removed at the request of property owners, the city said.

But new areas are still being annexed into Fort Worth.

The city’s annexation policy allows it to extend its boundaries to maintain streets, including those adjacent to properties within city limits and those areas experiencing urban development.

Many of Fort Worth’s recent annexations address roads in growing areas since it is customary to improve roads to accommodate traffic associated with new developments. Standards for city roads address concrete streets, curbs, gutters and sidewalks while county standards focus on asphalt, drainage and ditches.

Within the past five years, Fort Worth has annexed more than 5,300 acres to the north, south and west. The majority of those are owner-initiated annexations, a city spokesperson told the Fort Worth Report.

The city has initiated annexations that totaled more than 77 acres since 2019.

Fort Worth City Council recently annexed more than 9 acres in Denton County for right-of-way access for Dale Earnhardt Way near the Texas Motor Speedway. The site, north of State Highway 114 and west of Interstate 35 West, is within Fort Worth’s extraterritorial jurisdiction.

Another 6 acres in Denton County was annexed into Fort Worth on Sept. 17 for a new church that the Church of Jesus Christ of Latter-day Saints wants to build northwest of Blue Mound Road and Double Eagle Boulevard.

Last week, Cassco Land Co. filed plans asking Fort Worth to annex land for a 146-acre site it plans to develop near Chisholm Trail Parkway and Oakmont Boulevard in a pocket of Tarrant County land surrounded by Fort Worth.

Clegg said he believes Senate Bill 2308 is a good rule, but tweaks may be needed to allow property owners who wish to remain under city jurisdiction to do so.

“Fort Worth is great to work with,” he said, “but they’re not going to go out of their way to extend water and sewer services to new areas without a customer. For developers, this (law) provides agility and time to market a development. It also enables smaller towns to sweeten the pot on developments, making it quicker to build and providing incentives to do so.”

Eric E. Garcia is a senior business reporter at the Fort Worth Report. Contact him at eric.garcia@fortworthreport.org. 

News decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.