What is a MUD?
A Municipal Utility District [MUD] is a political subdivision of the State of Texas governed by Chapters 49 and 54 of the Texas Water Code. MUDs are subject to the jurisdiction of the Texas Commission on Environmental Quality [TCEQ] to ensure their residents receive quality drinking water and sanitary waste is properly handled. The rate-making authority of a MUD is subject to appellate review by the Public Utility Commission of Texas [PUC].
A MUD typically provides the following services to the community: potable water, sanitary sewer service, and storm sewer service (for those residents of Fort Bend County). In addition, a MUD can request and receive approval to provide other services such as trash service, parks and recreation, streetlights, and police/security protection. A MUD has the ability to levy and collect property taxes to pay debt service, operate the District, and cover other operating expenses.
A MUD is typically started by a real estate developer who is interested in converting rural vacant land to a newly constructed residential housing community. Folks living in the proposed development area get to vote in a public election to create the new MUD. Once created, the MUD residents can then vote on Directors, a proposed property tax rate, and can also vote on the issuance of municipal bonds for the primary purposed of installing the water and sewer infrastructure necessary to serve the proposed community. If not for the bond money, the developer would have to fund the infrastructure and that could adversely impact the sales price of the new houses being constructed.
Once sufficient taxable value is created in the MUD to meet TCEQ economic feasibility tests, municipal bonds may be issued and the proceeds used to reimburse the developer. New municipal bonds for a MUD typically have a 25-year repayment schedule.
Typically, most MUDs do not have employees other than the five-member Board of Directors. The MUD board will contract with an attorney, bookkeeping firm, tax assessor, financial advisor, an engineering firm, and an operator to perform the necessary duties necessary to operate the district. For most of the districts in Cinco Ranch, the operator is Severn Trent. Cornerstones MUD, which serves residents in North Lake Village, contracts with SI Environmental, as its operator.
Who runs the MUD?
Each MUD has an elected Board of Directors, comprising five members. The Directors are publicly elected to a four-year term. The terms are staggered and elections are held every two years. If a vacancy occurs, the remaining Board Directors can appoint an individual to serve out the remainder of the unexpired term. If an election is uncontested, the Director election can be canceled and the candidates for the office are installed at the first Board meeting after the date of the original election.
Typically, most MUD Boards meet once per month on a regularly scheduled basis. MUD meetings are open to the public. The Directors typically approve the minutes of the previous meeting, receive and approve reports from the District operator, engineer, bookkeeper, and tax collector. Approval of pending invoices is also done and checks are signed for payment of invoices. Also, each meeting usually has an agenda item that allows members of the public to address the Board. Public comment is always welcome!
Any resident or property owner in the district over the age of 18 can run for election to the Board of Directors. Directors have various backgrounds though there are no specific educational or experience requirements to be a Director. The desire to serve is all that is needed!
Directors get compensated at the rate of $150 per day for each day served to do District business. Texas state law limits the annual compensation for a MUD Director to $7,200 [48 meeting days].
Where does my MUD meet?
Each MUD Board selects its monthly meeting place and time. Most MUDs do not meet in Cinco Ranch though there are exceptions. Some MUD meeting places are Willow Fork Country Club, Inframark office (Grand Parkway), the Cinco Associations office, Tradition Bank (Grand Parkway), Allen Boone Humphries Robinson LLP office (Southwest Freeway) and Harris County MUD 81 (Hidden Canyon). Meeting times vary, so check with your MUD to get the exact time and location.