The City of Grey Forest will now be able to contest the wastewater permit for the controversial Guajolote Ranch development after the State Office of Administrative Hearings (SOAH) reversed an earlier decision by the state’s environmental agency.

At least 80 individuals and groups had applied to contest the Texas Commission on Environmental Quality’s (TCEQ) decision to green-light the wastewater plant that would serve a major home development in the Texas Hill Country. But in August, TCEQ opted to hear opinions from only three affected parties —  San Antonio Metropolitan Health District, the Greater Edwards Aquifer Alliance and landowner Ann Toepperwein.

The reversal makes way for the small city of 500 residents, located in northwest Bexar County, to oppose the wastewater plant that is meant to serve a proposed 2,900-home subdivision on 1,160 acres known as the Guajolote Ranch.

The Florida-based developer Lennar Homes first applied for the permit to build a wastewater plant for the neighborhood in 2022.

The proposed plant would discharge between 1 and 4 million gallons of treated effluent daily into Helotes Creek. Opponents of the Guajolote Ranch project are worried the plant could negatively affect the Edwards Aquifer, which supplies water to more than 2 million people in Central Texas, including in San Antonio.

Residents, environmental groups and local leaders will be able to challenge the project’s wastewater permit at a hearing scheduled to begin on Feb. 18.

A contested case hearing is a legal proceeding similar to a civil trial in a state district court and is conducted by SOAH.

At a preliminary hearing set by SOAH on Thursday, state officials heard from residents and city officials of Grey Forest who voiced their concerns about the water treatment plant and how it could uniquely affect waterways within their small town.

“I’m so excited to announce that we do have standing in this case, and it was a concerted effort — all citizens, friends of the city of Grey Forest and those who care about our natural environment and the water system,” said Grey Forest Mayor Paul Garro, who testified virtually.

Lindsey Carnett covered business, utilities and general assignment news for the San Antonio Report from 2020 to 2025.