Even though the Senate voted down a bill that would have overruled the City Council’s vote against a water-sewer extension for the 751 South subdivision, local officials are reconsidering their own policies before the legislature returns.

“As a result of the transpirings of the last several weeks, there is the reality we may need to go back and be more definitive,” City Manager Tom Bonfield said after a closed council meeting Thursday.

Bonfield said the administration was told to review how the city handles water-sewer extensions, annexations, territory outside the city limits and aligning city and county zoning decisions. A special meeting on urban growth boundaries, called for Tuesday, was cancelled.

Bonfield expects to have proposals ready in September. The General Assembly reconvenes Jan. 30.

Legislators had considered a bill that would have required cities to let property owners outside city limits but within a “designated urban growth area” connect to municipal water-sewer systems.

In 2011, the City Council enlarged Durham’s urban growth area to include the 167-acre tract near Jordan Lake where Southern Durham Development wants to build a mixed-use project the size of a small town. In February of this year, though, the council unanimously rejected the developers’ application for a water-sewer extension.

Southern Durham’s project has generated controversy since it was proposed in 2008. The developers say it would bring tax revenue and jobs Opponents say it threatens water quality in already polluted Jordan Lake and have called “foul” multiple times over tactics used to advance the project.

The legislature’s involvement, through Senate Bill 382, was the latest case in point. The bill, which opponents said was improper state meddling in local business, failed by a single vote.

“It’s dead, for now,” Durham state Sen. Floyd McKissick said after the vote, but it had been a protracted demise. After losing 25-15, bill proponents persuaded senators to reconsider. Approval failed again, but only 19-18.

“It was high drama,” McKissick said.

Originally, SB 382 pertained to withholding taxes. In that form, it passed the Senate in 2011 but languished in the House until June 25, when state Rep. Tim Moore, R-Cleveland, presented it in the House Rules Committee with the original tax language replaced by the provision on water service for an “urban growth area” – a term defined nowhere in state law.

Moore said he inserted the new language after a conversation with attorney Cal Cunningham, a college friend who has represented Southern Durham Development in court.

The rewritten bill won quick approval in the House, then went back to the Senate for concurrence in its new form. A conference committee rewrote the water-sewer provision to make it even more specific to Durham and 751 South than Moore’s original. That was the version the Senate later voted down.

“To me, the whole thing is surreal,” said Mayor Bill Bell.