City Must Comply With State Law: Fid-Bau Portal

City Must Comply With State Law

In 1994 the city of Buckner annexed and rezoned a tract that the Public Water Supply District (PWSD) had planned to serve. The annexed land was not developed, and PWSD did not have any water mains or easements on the tract. The city platted and rezoned the tract for single‐family dwellings and other development. PWSD brought suit to enjoin the city from extending water service into the area without first complying with the requirements of state law to protect the rights of the holders of PWSD bonds. The trial court dismissed PWSD's suit. On appeal, the city maintained that the law was permissive, not mandatory, and that compliance with the statutory procedures was optional in cases in which the water district does not serve customers and owns no lines or equipment in the annexed area. The appellate court disagreed, pointing out that if the provisions of the law were optional, the annexing city could involuntarily aquire a water district's rights to revenue to the detriment of the district's other customers or bondholders. According to the court, the legislature intended to allow a city to acquire water supply rights to a tract in a district's territory, but it obligated the city to obey the procedures for acquiring those rights. The trial court's decision was reversed.