Jan. 5, 2026 – Lennar Corp.’s proposed Municipal Utility District (MUD) for its controversial proposed Guajolote Ranch development in northwest Bexar County would be called MUD No. 2. So how did MUD No. 1 work out?
That’s the MUD for San Antonio Ranch, just northwest of Helotes, created in the 1970s. And current directors there say that high taxes beyond what residents paid in regular property taxes, as well as fees for unreliable services, made home ownership so unaffordable that some were forced to move – among many other issues.
“The San Antonio Ranch MUD No. 1 began with inexperienced board members who made many mistakes and angered all residents,” said Jim Berbiglia, a long-time resident and a current director of MUD No. 1. “Taxes were over $1,500 for most, many thousands for others and were not disclosed at sale. Board members paid themselves $400 each. And they paid a lawyer $700 per hour for many years. Those were only a few of the problems.”
Said current MUD No. 1 board vice president Sylvie Shurgot, “I’m opposed to Lennar creating a MUD for all the same reasons (others) are. And, of course, if Lennar succeeds in creating a MUD No. 2, it will soon be followed by a MUD No. 3, etc. To us, it endangers our environment and poisons our water supply.”
The San Antonio Planning Commission will hold a public hearing on Lennar’s MUD application Jan. 16 at 9 a.m., at 1901 S. Alamo St. The San Antonio City Council is expected to vote on it on Feb. 5.
Florida-based Lennar wants to build 2,900 homes on 1,160 acres of Guajolote Ranch, west of the intersection of Scenic Loop and Babcock roads, and discharge an average of 1 million gallons a day of treated sewage into the Helotes Creek watershed, which directly recharges the Trinity Glen Rose Aquifer, the water supply for the immediate area, and contributes up to 15% of the total recharge of the Edwards Aquifer, principal water source for about 2.5 million people across multiple counties.
A MUD is established by petition to the Texas Commission on Environmental Quality as a scheme by developers like Lennar to issue bonds to build infrastructure, including wastewater treatment plants, outside city limits and impose taxes on their residents to pay off the debt. But the city of San Antonio must formally consent through resolution or ordinance before it can be created, as Guajolote Ranch is located in its extraterritorial jurisdiction.
The MUD petition was filed with the city Nov. 10 on behalf of Lennar Homes of Texas Land and Construction Ltd. by landowners Richard H. “Rick” LePere, treasurer of for-profit Guajolote Ranch Inc. of Terrell Hills, and Sidney E. “Gene” Edwards Jr., a retired Valero Energy Corp. executive and his wife, Marcie, now living in Palm Beach Gardens, Florida. It places total costs at approximately $150 million, to be financed by bonds that would be repaid by taxpayers.
Lennar, identified as the MUD applicant, holds options to purchase the properties – approximately 1,097 acres held by LePere and his family, and about 63 acres owned by the Edwardses that would provide access to the development off of Scenic Loop Road. LePere is a son-in-law of Guajolote Ranch Inc. director Diana Huntress, daughter of late family patriarch Frank G. Huntress Jr. who established Guajolote Ranch in 1969.
Statewide issue, local impacts
Recent reports in the Houston Chronicle, and published in the San Antonio Express-News, have documented how MUDs have been promoted statewide by developers as boosting affordable housing, but rather have resulted in the opposite while straining local governments. See those reports here, and here.
Among the findings:
- New homebuyers frequently have been hit with property taxes double or triple those of the county or neighboring cities, plus monthly fees for basic services from trash pickup to police protection, shattering the illusion of affordable housing.
- Many homebuyers lured by attractive list prices haven’t been able to stay because of the high taxes and fees, calling into question the sustainability of the developments.
- MUDs have resulted in higher taxes for residents outside the developments, even, as cities and counties have been on the hook to provide services or even maintain infrastructure of MUDs. Those costs often can’t be fully recouped, falling on all existing taxpayers and property owners to expand roads, staff police departments and provide other services.
- Moreover, MUDs often function like invisible or permanent local governments, but without the same level of services and upkeep, and without the same accountability.
“Essentially,” said Randy Neumann, chair of the steering committee of the Scenic Loop-Helotes Creek Alliance, “developers like Lennar with deep pockets can just walk away without paying a cent, leaving unsuspecting homebuyers and local governments holding the bag.”
Outside Houston, where MUDs have proliferated, Katy resident Paulette Reynolds – sister of Jane Sams, a Scenic Loop-Helotes Creek Alliance member whose land borders Guajolote Ranch – pays nearly $3,000 a year in MUD taxes and fees, in addition to regular property taxes.
In 2025, North Fort Bend County MUD No. 58 assessed her $2,242.48 in taxes to pay off the developer’s bonds, and another $742.90 in fees for water and other services.
“As I’ve lived here since 2012, this essentially has added about $42,000 to the original price of my home, and growing each year,” Reynolds said.
And poisoning our drinking water
The only MUD currently with a wastewater treatment plant in the contributing zone of the Edwards Aquifer, where Guajolote Ranch is located, has violated discharge limits of dangerous pollutants.
The Meyer Ranch MUD in Comal County was cited for wastewater discharges exceeding permitted limits for nitrates and phosphorus for two quarters in the last three years, according to a U.S. Environmental Protection Agency report. High nitrates are linked to “blue baby syndrome” in infants, causing brain damage or death, while high phosphorus produces algae blooms with toxins harming aquatic life and causing gastrointestinal illness and liver damage in humans.
Notably, the plant is one of more than a dozen plants that Lennar itself claims to be operating “safely and effectively” in the contributing zone of the Edwards Aquifer.
An examination of available EPA compliance records for 14 plants in the contributing zone finds that half had non-compliant quarters over the past three reporting years, with two of them fined a total of $52,672. The non-compliant findings included pollutants such as E. coli, ammonia, nitrogen, phosphorus and total suspended solids.
And while Lennar maintains that the Guajolote Ranch plant would be advanced, three of the four most-advanced plants currently operating in the area contributing zone that treat for drinking-water status have been out of compliance during the past three years, according to the EPA data.
A comprehensive hydrological study by Southwest Research Institute, funded through the city’s own Edwards Aquifer Protection Plan, concluded that additional wastewater systems from residential development in the Helotes Creek watershed, “regardless of type,” would “significantly degrade the watershed and the quality of water recharging the Edwards Aquifer.”
While the TCEQ has approved a wastewater permit for Guajolote Ranch, an appeal to state district court is expected by the end of January, with possible prolonged court proceedings to follow. Still, several San Antonio city council members, county commissioners and state legislators have affirmed the importance of local control, no matter what TCEQ does.
“Even when a project receives state approval, we have a responsibility to independently evaluate its long-term impacts,” said San Antonio District 10 City Councilman Marc Whyte, in a press release issued after touring the Guajolote Ranch area.
The Greater Edwards Aquifer Alliance urged city council to reject the MUD, in a strongly worded piece Jan. 3 in the Express-News, here.
Back at the ranch
The early days of San Antonio MUD No. 1 were rife with confusion and waste, director Berbiglia said.
“There were many discrepancies as to what the MUD could and could not pay for, changing as the MUD presidents changed,” he said. “The original board and developer arranged millions of dollars in loans at 9%, with prohibitions for any early redemption of the bonds.”
The district hasn’t provided water or wastewater services for many years now. These days, it primarily provides trash and recycling pickup, and maintains a tennis court and 113 acres of green space. MUD taxes are much lower than they were, with still about $450,000 in remaining original bond debt finally expected to be retired in 2027, some 50 years on.
The MUD has meant San Antonio Ranch couldn’t be annexed by San Antonio or Helotes as those cities would have had to assume the bond debt. For the same reason, board vice president Shurgot says, San Antonio wouldn’t be able to annex Lennar’s MUD No. 2 without assuming $150 million in bond debt and taking responsibility for a sewage plant.
That, she says, would mean a loss of local control.
“San Antonio MUD No. 2 would create so many obstacles to a future annexation by San Antonio that it would likely not be annexed for decades, if ever,” Shurgot said. “The very real possibility of losing the ability to annex thousands of homes and losing the tax revenue, and also losing control over what could turn into dozens of developments following the Lennar example, will make the mayor and city council think a little harder about approving a MUD.”
The Scenic Loop-Helotes Creek Alliance is a nonpartisan, nonprofit 501(c)(3) group representing the largest neighborhood by square mile recognized by the San Antonio Neighborhood & Housing Services Department, a wide corridor along Scenic Loop Road from Bandera Road to north of Babcock Road.
Scenic Loop-Helotes Creek Alliance contacts:
Randy Neumann, SL-HCA steering committee chair, 210-867-2826, uhit@aol.com
Steve Lee, 210-415-2402, text; media@scenicloop.org
Jim Berbiglia, right, with members of the Scenic Loop-Helotes Creek Alliance, inspects a poster board opposing a MUD for Lennar, during a Dec. 17 work session of the city Planning Commission. (Photo by Lesli Hicks Lee)