The lone voter who on Nov. 7 approved creation of Galveston County’s latest municipal utility district knows as well as anyone that every ballot counts.

That elector, one of just two registered voters in newly formed MUD 76 on Galveston’s West End, approved each of the eight propositions related to its creation and its initial debt authority.

State law allows as few as two registered voters to petition to have propositions creating so-called special purpose districts placed on the ballot, and a single vote is all that’s required to bring such requests to fruition.

“As long as a majority of the votes cast are in favor, then that proposition passes, whether there are one, 10 or 1,000 votes,” Sam Taylor, the Texas secretary of state’s chief spokesman, said. “There is a threshold that petitioners have to reach in order to get the proposition on the ballot in the first place, but once it’s on the ballot, all it takes is a simple majority in order to pass.”

The state’s requirement of a minimum of two registered voters to petition for electoral approval of a new municipal utility district exactly matched the number who currently reside within MUD 76, Galveston County Assistant Elections Coordinator Susan Williams said.

The single voter who approved MUD 76, which is now authorized to issue up to $116.1 million in bonds to create roads and to bring water and sewer mains to the proposed Sweetwater Cove subdivision, also elected a five-member board to oversee the district.

MUD 76 joins no fewer than three dozen MUDs currently approved in Galveston County, although some have yet to break ground.

Statewide, there are at least 949 MUDs on the books. Combined, they have issued some $60 billion in bond debt.

Residents of municipal utility districts typically can expect to pay higher overall property taxes than those living outside such jurisdictions, given that on top of other property taxes, homeowners within MUDs also are taxed to pay down the bonds that finance the infrastructure that serves them.

To wit, residents in MUD 56, which serves a 633-acre section of Texas City’s sprawling Lago Mar residential subdivision, in 2015 paid property taxes to Dickinson ISD, Galveston County and the city of Texas City in addition to paying to the municipal utility district $1 per every $100 of assessed property value.

Residents elsewhere in Texas City that year similarly paid school and county taxes, as well as Texas City’s 44.9 cent ad valorem assessment — but weren’t on the hook for the $1 levied by MUD 56 on those living within it.

“There’s an added tax burden, there’s no question about that,” Texas City Executive Director of Management Services Nick Finan said. “But there are advantages.”

Those, he said, include new utilities and roads and bond covenants that help protect such homeowners’ investment.

MUD 56, which was established in 2007, well before development within its boundaries began in 2014, had three propositions on the Nov. 7 ballot, asking residents to grant additional bond issuance authority up to $213 million as the district continues to build out.

As of the first of the year, there were 26 voters registered within MUD 56, just four of whom voted last week on the district’s three bond propositions.

All four voted to grant the district authority to issue $138.97 million for additional water and sewer mains. Three out of the four voted for the other two propositions, which, combined, granted the district permission to issue as much as $74.2 million for recreational facilities and additional roads within MUD 56, as needed.

Taylor said the Texas secretary of state’s office expects to sign off on the Nov. 7 elections by the end of the month, making official MUD 76’s creation by its solitary vote.

(4) comments

Jean Casanave

Municipal bonds or muni bonds are issued by municipalities such as states, counties and local governments to finance projects for public services. The municipal market totals $3.8 trillion in debt outstanding according to this report from SIFMA.Jun 24, 2015
Because taxpayers/homeowners are obliged to pay back these bonds with their property taxes, makes it a sure bet for those investing in the bond market. What happened to the days that developers got this funding on their own? Or did they ever?

Gary Miller

NO matter how much was authorized MUD bonds are sold at a pace MUD members can afford to repay. Selling them too fast could drive people out of the district or cause the district to default.

Ron Shelby

Something is just wrong with the picture. One voter, allowing the commitment of so much debt. This public policy needs review.

Marc Edelman

It is very common for a developer to put a trailer on 200 acres and have 2 people live there during the statutory requirement for voting in that location. Then those individuals call for an election via a petition and the vote. It is how it’s done.

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