AIRW 2017-7, L.P.; 600 Westinghouse Investments, LLC; 800 Westinghouse Investments, LLC; Texas Commission on Environmental Quality; And Jonah Water Special Utility District v. City of Georgetown, Texas

ACCEPTED
15-24-00132-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
11/14/2025 4:23 PM
CHRISTOPHER A. PRINE
CLERK
FILED IN
15th COURT OF APPEALS
AUSTIN, TEXAS
WILLIAM A. FAULK, III 11/14/2025 4:23:09 PM
DIRECT DIAL: (512) 840-4549
cfaulk@spencerfane.com CHRISTOPHER A. PRINE
Clerk

November 14, 2025
VIA e-Filing
Court of Appeals for the Fifteenth Judicial District
ATTN: Christopher A. Prine, Clerk of Court
P.O. Box 12852
Austin, Texas 78711

Re: Court of Appeals No. 15-24-00132-CV;
AIRW 2017-7, L.P.; 600 Westinghouse Investments, LLC; 800 Westinghouse Investments, LLC;
Texas Commission on Environmental Quality; and Jonah Water Special Utility District
v. City of Georgetown, Texas

Dear Mr. Prine:

Pursuant to your correspondence regarding the setting of oral argument dated October 2, 2025, the City of
Georgetown, Texas hereby files the attached exhibit (“Exhibit 1”) to be offered to the Court during its oral argument
on November 20, 2025.

Thank you for your attention to this matter. Please do not hesitate to contact the undersigned with any
questions or concerns.

Respectfully submitted,

________________________________
William A. Faulk, III
State Bar No. 24075674
cfaulk@spencerfane.com
Counsel for the City of Georgetown, Texas

Enclosure

SPENCER FANE LLP | 816 CONGRESS AVENUE, SUITE 1200, AUSTIN, TX 78701 | spencerfane.com
Georgetown Ex.

1
City of Georgetown Ex. 1 – Summary of Authorities and Argument
Standard of Review – Substantial Evidence
Judicial review of an agency’s administrative action is governed by the Texas Administrative Procedure Act and Tex. Water Code §
5.351. Reviewing courts evaluate whether TCEQ’s decision violated statute or constitution, exceeded statutory authority, was made
through unlawful procedure, was affected by legal error, lacked substantial evidence, or was arbitrary and capricious. 1

Substantial-evidence review asks two questions:
1. Do the underlying fact findings logically support TCEQ’s ultimate conclusions and authority to issue the permit?
2. Are those findings reasonably supported by the record?

An agency’s action is arbitrary or an abuse of discretion if it fails to consider a mandatory factor, considers an irrelevant factor,
considers appropriate factors but reaches a completely unreasonable result, or fails to follow its own regulations. 2

Why the Court Should Rule for the City / Affirm the District Court
A. Legal Error: TCEQ Misapplied the Legislature’s Regionalization Mandate
Texas law requires TCEQ to “encourage and promote” regional wastewater systems and to use all reasonable methods to implement
this policy under Tex. Water Code §§ 26.003 and 26.081.

TCEQ’s rules require applicants to request service, obtain cost information, and document those efforts, which AIRW did not do,
and TCEQ did not enforce.3 TCEQ’s failure to apply statutory regionalization requirements constitutes unlawful procedure and
arbitrary action.

B. Lack of Substantial Evidence: No Legally Supportable “Denial of Service”
TCEQ’s conclusion that the City “denied service” lacks record support and is contrary to established law.

Where service is not denied for lack of capacity to serve, there was no final denial of service in the absence of a denial by the City
Council.4 TCEQ’s finding to the contrary lacks substantial evidence and is against clear law.

C. Arbitrary & Capricious: TCEQ Considered an Irrelevant, Prohibited Factor
TCEQ relied heavily on an alleged $20 million future “diminution in value” to the developer if annexed. This is not a permissible
“cost of connection,” is speculative, and falls outside TCEQ’s jurisdiction, which does not include evaluating property-value
impacts. 5 The real, documentable costs (construction costs) favored regionalization, as both parties’ evidence demonstrated
connection to the City was less expensive than a standalone plant. 6

TCEQ ignored relevant statutory factors and relied on factors it has deemed irrelevant—classic arbitrary and capricious conduct.

1 Tex. Architectural Aggregate, Inc. v. Tex. Comm’n on Env’t Quality, No. 03-22-00169-CV, 2023 WL 8459511, at *4 (Tex. App. Dec. 7, 2023)

(citing Tex. Gov’t Code § 2001.174(2)(A)–(F)); see Tex. Water Code § 5.351.
2 Tex. Gov’t Code Ann. § 2001.174(2); City of El Paso v. Pub. Util. Comm’n of Tex., 883 S.W.2d 179, 184 (Tex. 1994); Pub. Util. Comm’n v.

Gulf States Utils., 809 S.W.2d 201, 207 (Tex. 1991); Heritage on the San Gabriel Homeowners Ass’n v. Tex. Comm’n on Env’t Quality, 393
S.W.3d 417, 423 (Tex. App.—Austin, 2012).
3 2 AR 146; 2 AR 74 at bates p. 00077.
4 See City of Denton v. Grim, 694 S.W.3d 210, 215 (Tex. 2024). All conversations between AIRW and the City were between parties unable

to unilaterally bind the City. 2 AR 142; 2 AR 102; 2 AR 101.
5 See Concerns Outside of TCEQ’s Authority, available at: https://www.tceq.texas.gov/agency/decisions/participation/permitting-

participation/concerns-outside-of-tceqs-authority (last visited Nov. 14, 2025).
6 2 AR 151; 2 AR 91.
D. District Court’s Reversal Fits APA § 2001.174
The district court reversed because TCEQ misapplied regionalization statutes, lacked substantial evidence for “denial of
service,” and improperly relied on speculative property-value considerations. The Court applies the same standards de novo
and should affirm the district court.
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Olivia Oswald on behalf of William Faulk
Bar No. 24075674
ooswald@spencerfane.com
Envelope ID: 108083646
Filing Code Description: Exhibit
Filing Description: Letter to 15th Court of Appeals Clerk re Georgetown's
Exhibit
Status as of 11/14/2025 4:32 PM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Patricia Carls 3813425 tcarls@tcarlslaw.com 11/14/2025 4:23:09 PM SENT

William Thompson 24088531 will@lkcfirm.com 11/14/2025 4:23:09 PM SENT

Edmond McCarthy 13367200 ed@ermlawfirm.com 11/14/2025 4:23:09 PM SENT

William Faulk 24075674 cfaulk@spencerfane.com 11/14/2025 4:23:09 PM SENT

John Carlton 3817600 john@carltonlawaustin.com 11/14/2025 4:23:09 PM SENT

Michael Parsons 24079109 michael@carltonlawaustin.com 11/14/2025 4:23:09 PM SENT

Carlota Hopinks-Baul 24094039 chbaul@spencerfane.com 11/14/2025 4:23:09 PM SENT

Helen Gilbert 786263 hgilbert@bartonbensonjones.com 11/14/2025 4:23:09 PM SENT

Kellie E.Billings-Ray Kellie.Billings-Ray@oag.texas.gov 11/14/2025 4:23:09 PM SENT

Sara Ferris sara.ferris@oag.texas.gov 11/14/2025 4:23:09 PM SENT

Colton Halter colton.halter@oag.texas.gov 11/14/2025 4:23:09 PM SENT

Erin K.Snody Erin.Snody@oag.texas.gov 11/14/2025 4:23:09 PM ERROR

Maris Chambers MChambers@spencerfane.com 11/14/2025 4:23:09 PM SENT

Andrew Davis andrew@lkcfirm.com 11/14/2025 4:23:09 PM SENT

Todd Disher todd@lkcfirm.com 11/14/2025 4:23:09 PM SENT

John Carlton john@carltonlawfirm.com 11/14/2025 4:23:09 PM ERROR

Kelli Carlton kelli@carltonlawfirm.com 11/14/2025 4:23:09 PM ERROR

Erin Selvera erin@carltonlawfirm.com 11/14/2025 4:23:09 PM ERROR

Yahaira De Lara ydelara@bartonbensonjones.com 11/14/2025 4:23:09 PM SENT

Jennifer Jamison jennifer.jamison@tceq.texas.gov 11/14/2025 4:23:09 PM ERROR

Bobby Salehi bobby.salehi@tceq.texas.gov 11/14/2025 4:23:09 PM ERROR

Jacob Beach Jacob.Beach@oag.texas.gov 11/14/2025 4:23:09 PM SENT
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Olivia Oswald on behalf of William Faulk
Bar No. 24075674
ooswald@spencerfane.com
Envelope ID: 108083646
Filing Code Description: Exhibit
Filing Description: Letter to 15th Court of Appeals Clerk re Georgetown's
Exhibit
Status as of 11/14/2025 4:32 PM CST

Case Contacts

Jacob Beach Jacob.Beach@oag.texas.gov 11/14/2025 4:23:09 PM SENT

Evan Greene evan.greene@oag.texas.gov 11/14/2025 4:23:09 PM SENT

Michael Cotton michael@lkcfirm.com 11/14/2025 4:23:09 PM ERROR

Skye Masson Skye.Masson@georgetowntexas.gov 11/14/2025 4:23:09 PM SENT

Kelsey Parker kparker@spencerfane.com 11/14/2025 4:23:09 PM SENT

Victor Hernandez victor.hernandez@oag.texas.gov 11/14/2025 4:23:09 PM SENT