No more than 26 registered voters will decide Tuesday whether to grant the board overseeing Galveston County’s Municipal Utility District 56 permission to issue up to $213 million in new bond debt to build out a 633-acre swath of Texas City’s sprawling Lago Mar residential subdivision.
As of the first of the year, those 26 homeowners were the only residents on MUD 56’s tax rolls and in the county’s voter registry.
The district was created in 2007, but sat idle until development began in 2014.
“The total 2016 assessment on the district’s 26 properties was $303,641,” Tommy Lee, the president of Friendswood-based Assessments of the Southwest Inc., said of MUD 56’s most recent tax collection.
“This year, we are sending out tax bills to 330 property owners in the district. That includes homeowners, builders who have purchased lots and developers on lots they haven’t sold.”
MUD 56’s 26 registered voters have total say over the multimillion-dollar bond issue on Tuesday’s ballot, Lee said: “The only people who can vote on this are the registered voters within the district.”
The proposed MUD 56 bond issue — it calls for a debt ceiling of $139 million for water and storm and sanitary sewers; $17.55 million for recreational facilities; and $56.6 million for roads — dwarfs Galveston County’s three-pronged, $80 million bond issue, also on Tuesday’s ballot, for infrastructure improvements throughout the county’s 378 square miles and 13 municipalities.
Residents inside MUD 56 as of 2015 paid a total of nearly $4 for every $100 of assessed valuation, including $1.54 to Dickinson ISD; 1.33 to Galveston County and $1 to the municipal utility district.
Yet, Lee, whose company also assesses and collects taxes for about 160 other MUDs statewide, said he expects that should the MUD 56 bond issue be approved, residents of the district likely won’t see their current municipal utility district tax assessment of $1 on each $100 of property value rise anytime soon.
“The tax rate should stay the same for now,” he said.
Should the district’s registered voters approve the bond measure, the board that oversees MUD 56 may never sell all of the $213 million, tax-exempt bonds it’s requesting.
“The directors have calculated how much in the way of bonds are needed to build out the district,” Lee said. “This vote would give them permission to issue the bonds; it’s not saying they will actually do so.”
The five-member board’s primary interest is in seeing that the developer of the 2,033-acre Lago Mar subdivision, Houston-based Land Tejas Cos., recoups its infrastructure investments in the three years since construction began in MUD 56, one of several such districts within the overall subdivision.
“MUD 56 was created in February 2007, and development began in 2014,” Sherri McElwee, with Bellaire-based engineering firm Jones Carter and the district engineer for the 633-acre MUD 56, which comprises just less than a third of Lago Mar’s total acreage. It is on the cusp of expanding, she said: “Currently, there are 369 lots platted in MUD 56.”
There is a good deal of room for more lots, both in MUD 56 and in the entirety of Lago Mar, whose master plan calls for 4,000 total homes.
Current homes in Lago Mar average 2,600 square feet and sell for a median price of $285,000, according to the Houston Association of Realtors.
Tuesday’s MUD 56 bond vote is not the only municipal utility district issue on Tuesday’s ballot.
In one such vote, a developer wants voters to create Galveston County MUD 76 to benefit the proposed subdivision of Sweetwater Cove, on the island’s west end.
MUD 76’s multiple propositions asks voters there to approve the new district, elect a five-member board, as required by Texas statute, and grant permission for up to $116.1 million in bond authority.
MUD 76 would join no fewer than three dozen MUDs currently in Galveston County, some of which have yet to break ground. Statewide, there are at least 949 MUDS, with a combined $60 billion in outstanding bond debt.
According to the ballot measure, the proposed MUD 76 wants permission to issue $23.1 million in bonds to install water and storm and sanitary sewers; $7.2 million for recreational facilities; $10.5 million for roads; and $17.25 million for navigation facilities, while not taxing residents more than $1.5 per $100 of assessed valuation.
Today, only a few people live in the proposed district, yet by state law fewer than a handful of people must live at least 30 days in a proposed MUD to trigger an election to create such a district.
As recently as 2008, MUD 187, which serves a retirement community comprising 519 acres in Fort Bend County, came into existence with just two residents voting their unanimous approval to sell up to $188 million in infrastructure bonds.
“That’s all it requires,” Galveston County Tax Assessor Cheryl Johnson said. “They have to place a handful of occupied trailers on the property for 30 days in order to establish voter registration. That’s what the law says.”