Frequently Asked Questions

A utility authority is a legal entity that is authorized by the State legislature, created by local governments and controlled by the cities that would use its services.  

Many of the cities in this area have been concerned about their long-range water, sewer and solid waste needs. At least two of these cities (Denison, Sherman) determined, after considerable study and examination of their situation, that a utility district could best serve their needs. They requested the State Legislature to enact legislation allowing for the creation of the Greater Texoma Municipal Utility District. In 1979, the Texas Legislature enacted legislation to permit the creation of the District. The final step in establishing the entity was a confirmation election by the citizens of the area held on August 11, 1979.

Changes in the enabling legislation where made by the legislature in 1983, which amended the name of the Greater Texoma Utility Authority to better reflect the Authority’s municipal composition and enhance the marketability of its bonds. 

The legislation authorizing the Authority specifies that a Board of Directors be appointed for 2-year terms by the cities that are members. There will be a total of nine members on the Board: three appointed by the City of Sherman; three appointed by the City of Denison; one appointed by the small general-law member cities; and one position is held open for another home-rule city. 

NO. The Authority only has the power to contract for whatever services are desired by its member cities and is entirely dependent upon revenue derived from those sources. 

The Authority depends upon the revenue produced from the services it offers. 

The Authority issues revenue bonds to construct facilities necessary to carry out its contracted services. The revenue bonds are issued based on the contracts entered with the cities served by the Authority. 

The Authority can contract with cities to provide water, treat sewage and dispose of solid waste. It has the same powers, functions and responsibilities as other special law districts, including River Authorities. 

NO. The Authority would be in the “wholesale business” only. Each city would still maintain its own distribution system; the city could simply purchase its water from the Authority and distribute the water to its customers. 

In recent years, the cost of water production, wastewater treatment and solid waste disposal has increased rapidly because of the State and Federal requirements associated with those services. Many of the expensive items connected with the provision of those services can be shared by communities in a utility district, thereby defraying some of the rising costs.

Also, it has become very difficult for many of the smaller cities to attract and retain competent personnel with the proper training and experience to operate and maintain their water, sewer and solid waste management programs. The creation and use of the Authority provide a vehicle through which these costs can be kept to a minimum, while assuring that adequate technical skills are available to plan, finance, develop, operate and maintain these necessary services. 

NO. The Authority might contract to provide water from one source for Community A and from an entirely different source from Community B. 

The cost of the Authority’s services for your city is dependent upon what services the city requests the Authority to provide in terms of water production, sewage treatment or garbage disposal. 

The water, sewer and garbage service rates area established by each city council based on what it feels necessary to derive the revenue to provide that service. The Authority will respond to whatever service is requested by any individual city, providing that the city is willing to pay for those services. It would be impossible to predict any exact changes in an individual city’s water, sewer and garbage service fees. While the Authority does achieve an economy of scale, future costs for providing water, sewer and solid waste management services will be affected by the same factors that affect the purchase of all other goods and services.

A city’s overall cost may be reduced by consolidation and sharing expenses with other members of the Authority 

YES. The Authority may issue revenue bonds for the construction of water, sewer and solid waste improvements if it has contracts with member cities to pay for these services. The mechanics for issuing these bonds is much simpler, and the revenue requirements are only to meet debt service and operating and maintenance expenses. Traditional municipal revenue bond requirements provide for debt service and operating and maintenance expenses, plus additional revenue for reserves.  

The Authority has been designated as a cooperating local sponsor to negotiate with the U.S. Army Corps of Engineers for purchase of water from Lake Texoma on behalf of the cities in this area. In this matter, the local Authority controlled by local municipalities will have greater influence in future water supplies.