Brittany Kelley
KYLE — Residents of the 6 Creeks housing community may get what they've spent the last year fighting for: in-city water and wastewater rates.
An item to accept the discussion points and term sheet, as negotiated by the 6 Creeks developers and interim city manager Perwez Moheet, was brought forward at the Tuesday, Aug. 18, Kyle City Council meeting, following council direction at the May 19 meeting “to resolve outstanding contractual issues,” according to agenda documents.
The process, said Moheet, consisted of obtaining the city attorney’s written legal assessment of the contractual issues and Moheet personally dedicating time to understand the 6 Creeks developers’ position, as well as providing repeated assurances that the city wanted to amicably resolve the outstanding issues. They then collaborated on an approach for resolution that would support the best interests of both sides, while providing the framework to move forward as partners.
The 15 discussion points for the term sheets were as follows:
• All items were considered for discussion purposes and remain subject to council approval.
• The city would agree to move forward with rescinding the notification letter dated Jan. 20, 2026, invalidating the development agreement (DA).
• 6 Creeks developers will pay $1,200,000 from the public improvement district (PID) bond process, which can then be used in any way to benefit the public that the council chooses.
• 6 Creek developers will dedicate all right-of-way for Old Stagecoach Road for the reconstruction under the 2022 Road Bond Program.
• The initial $1,500,000 owed to the city by 6 Creeks has been fully paid.
• 6 Creeks developers agree to pay $686,545.60 owed for the city allocation for PID areas 1A-1 through 1A-5. Additionally, the city can use all payments of city allocation for any public purpose that council chooses.
• 6 Creeks will pay the $685,545.60 owed within 10 business days of the execution of the second amendment to the DA.
• Any city allocation will be characterized as a 10% community benefit fee. The current restrictions that limit the use of these payments to fund specific projects that directly complement the 6 Creeks development will be removed and funds can instead be used for any public purpose as determined by council.
• The city agrees to clarify that residents of the 6 Creeks development will receive the same water and wastewater service rates and impact and other fees as applied to all water and wastewater utility customers located within the incorporated limits of the city.
• The city and 6 Creeks developers agree that at the time of any bond sale, the bond principal may exceed a 3:1 value to lien ratio, based on the value in the improvement area as of the date of the sale. If the proceeds exceed the value, they will not be available until the value in the applicable improvement area supports the aforementioned lien ratio. Until then, no 10% community benefit fee will be due.
• 6 Creeks will be allowed to determine the appropriate number of PID areas, based on the market and configuration of future development areas.
• 6 Creeks agrees that the city is not required to build any additional park improvements.
• The city and 6 Creeks agree that upon final completion of the development, the city and developers will perform a final reconciliation of all bond proceeds accounts and determine any unused funds. If there are, the funds will be applied against the debt service for the PID bonds.
• Next steps include city council discussion and approval for the second amendment to the DA at the Sept. 15 meeting.
• No additional discussion points and term sheets.
“It is my recommendation that the city council consider and approve the discussion points and the term sheets that … I just now walked you through, each one of those 15 items,” said Moheet.
Council member Melisa Medina noted that the terms to bring in-city water rates to the 6 Creeks residents was done prior to budget presentation Aug. 1. So, she wondered if these new numbers were configured into the proposed budget or if they will now be affected, since revenue rates will change.
He did consider this, said Moheet, but, there is enough of a fund balance to absorb the difference, if council approved this.
“I ask because, for months, prior to May, when you took over, some of us have tried having discussions to at least give temporary reprieve to the [extraterritorial jurisdiction (ETJ)] customers for their rates and were receiving push back after push back after push back that we couldn’t move forward with any of those agenda items … [because] if we did something to lower their rates, we would have to raise in-city rates,” explained Medina. “So, just for everyone at home to hear again, if we bring their rates back down, no one’s suffering the consequences.”
Asking for more clarification on how there will be no impacts was council member Claudia Zapata, who stated that she will be voting for the change, but wants to ensure that there are safety nets established for low-income utility customers, in an effort to reduce the possibility for in-city rates to rise dramatically in the future.
“I can give you this assurance tonight: If I’m standing here this time next year, we will have some form of lifeline rates. That will give our senior citizens, our fixed income people, within their minimum monthly cost, some gallons that they do not get charged. We will recoup that cost from the higher-end users,” said Moheet.
Council member Michael Tobias noted that “it’s been a long time coming” for the residents of 6 Creeks, with many showing up to council meetings over the past year to defend themselves against the 77% water rate increase that occurred for the 2025-26 fiscal year.
Although celebrating for 6 Creeks residents, council member Courtney Goza brought forward concerns for other ETJ customers, who are still dealing with these rates. So, she looks forward to Moheet’s solutions in the future.
The rate change would occur for the first bill in the new fiscal year, beginning Oct. 1, if approved.
In a motion to accept the term sheets and bring back the item for council approval at the Sept. 15 meeting, Tobias also directed the interim city manager to negotiate a solution with two residents that filed a rate dispute and place the settlement funds paid by 6 Creeks in a separate account dedicated for the new Kyle Vista Park.
His reasoning, agreed upon by Medina, was that the residents on the east side, specifically in Kyle Vista, have been waiting for 20 years for this park.
Both Zapata and council member Lauralee Harris were hesitant on the park funding, as they didn’t want any restrictions for the $1.8 million the city would gain, with Zapata suggesting working on a project, such as Post Oak Road.
“It’s amazing how now people are starting to notice the east side all of a sudden, that they have potholes and things like that. We’ve been having that for many years … I got stop signs that are falling down, potholes. Those items are truly needed, but that’s where I believe we develop a better [capital improvement plan (CIP)] to where we can get a lot of these roads redone,” said Tobias. “Now, [we] have the opportunity for us to be able to use this funding to be able to jumpstart what the city should have done 20 years ago.”
The question was called to stop discussion, passing 7-0, requiring council to vote on Tobias’ earlier motion.
“You’ve put us in a difficult position,” said Harris. “As much as I dislike doing this, I believe that the motion as it stands does not relate to the 6 Creeks development, which is what was on the agenda. I am going to have to say no.”
The motion passed 5-2, with an eruption of applause from the crowd. Harris and council member Marc McKinney dissented.
To listen to the full discussion, visit bit.ly/4bWIYOb.
