The general manager of Mustang Special Utility District, the Aubrey-based water and sewer provider for much of northeastern Denton County, resigned late Friday during a specially called district board meeting.

General Manager Byron Gaines presented the board an employment separation agreement, which the board approved 5-1 after a closed session Friday, said Mustang Board President Sonny Snow.

The meeting’s agenda called only for discussion of the district’s contract with Gaines.

Gaines’ resignation takes effect today.

Though the district has been dealing with problems recently, including system water losses and an employee satisfaction survey that included negative responses about district officials, Snow said he was not sure why Gaines resigned and that it was not expected.

Gaines, 59, said he was not pressured into resigning.

“It’s a decision that I think is best for me at this time,” he said. “I’ve been at it for two and a half years. I leave with a lot of good friendships.”

Gaines began work as Mustang’s general manager in September 2004 after being selected from a field of about three-dozen candidates and three finalists.

Gaines replaced former Aubrey Mayor Jason Pierce — who resigned as general manager as part of a settlement with the district in June 2004 — after less than three months on the job.

Board member Mike Frazier said the agreement between Gaines and the district appears to be similar to the one with Pierce.

The board approved Gaines’s agreement with a 5-1 vote, with Frazier opposed.

“I felt like the board could have addressed this matter two years ago, and since,” Frazier said. “I disagreed with the financial aspects of the agreement. I voted my principles, as I understand my constituents would want me to vote.”

Frazier said there are severance benefits included in the agreement, but was not able to disclose specific amounts.

Gaines’ original contract entitled him to a $75,000 annual salary, plus benefits. The three-year contract was to expire Sept. 30, 2007.

Board members said they did not know the exact amount of Gaines’ ending salary. Gaines declined to comment on the matter.

Although the district has experienced water losses in the past two years, Gaines told the board of directors in September that he was “proud” of the overall loss rate of 6 percent, saying it compared well to other suppliers.

The board agreed Sept. 18 to solicit feedback from employees on their job satisfaction and respondents returned mixed assessments, according to a document distributed to board members Oct. 30.

Employees gave the district high marks on “work/life balances/stress,” “workplace and resources,” “respect for employees” and “fairness” but returned negative responses about “open communications,” “recognition,” “feedback,” “misinformation” and “mission” of the district, according to the board document.

In response, board members adopted a seven-point plan to address employees’ complaints. Only one of the seven recommendations directly referred to Gaines, requiring him to “get to know each employee individually, their desires and needs.”

Snow said the board has not decided what course of action they will take in lieu of Gaines’s resignation.

The next regularly scheduled board meeting is Jan. 22.

Snow said he expects that the board will discuss how to continue with the seven-point plan at that meeting.

“Whatever the board decides, I’ll do my best to move forward with it,” he said.

Gaines offered his help to the district with any future business but said that there are other places and things he wants to move on to.

“The district is in fine shape, and I hope that it continues that way,” he said.