What is a MUD?
“MUD” Is an acronym for “Municipal Utility District” and provides utility related services to businesses, schools and neighborhoods within its allotted boundaries. The homes within Teal Run, Teal Run North, Estates of Teal Run, Andover Farms, Cambridge Falls and Winfield Lakes, are all located within the boundaries of Fort Bend County Municipal Utility District No. 23.
Municipal Utility Districts exist almost exclusively in Texas and are more abundant in south Texas than other parts of the state. A MUD is created as a mechanism to finance necessary water, sewer and storm drainage construction and maintenance within a subdivision. The districts are created by the Texas Commission on Environmental Quality (TCEQ). The city in whose extra-territorial jurisdiction (ETJ) the district lies, must consent to its creation. MUD No. 23 lies within the ETJ of Houston. The city of Houston, therefore, has limited development controls and sole authority to annex MUD No. 23 into its city limits. However, because we are NOT within the city limits of Houston, only the ETJ, we do not pay city of Houston property taxes.
Municipal Utility Districts are run by five-member boards. These board members are elected by registered voters living within the boundaries of the MUD The board members act in a similar capacity as city council members in a municipality. They tend to the affairs of the district and ensure that all water and wastewater facilities the district constructs are in operation and properly maintained. In lieu of a full-time paid staff, districts contract with professionals, such as financial advisors, attorneys, bookkeepers, engineers and operators, to aid the District in its operation.
When a MUD is formed, an estimate is made regarding the cost of water, sewer, and storm drainage facilities needed for “build-out.” Build-out is the total number of homes, businesses, schools, etc., in the MUD when development is complete. The residents living in the district then vote to grant the board the authority to issue an amount of bonds to cover ultimate build-out. The board will issue these bonds in phases, as needed, to finance construction projects. Annually, board members adopt a budget and set the property tax rate at a level sufficient to meet the long-term debt obligations, operations and maintenance, and administrative costs of the district.
Who is FBMUD No. 23?
Now that we have discussed MUDs in general, let’s talk about our MUD Fort Bend County MUD No. 23 was created February 15, 1978, and currently encompasses 1301 acres containing approximately 4,500 single family homes, two elementary schools, and multiple retail establishments within Fort Bend County, Fort Bend I.S.D., and the City of Houston ETJ. The members of the board for MUD 23 are all property owners who live in the district. The board meets on the fourth Thursday of each month at 6:00 p.m. in the offices of our attorney. Our fiscal year runs January 1-December 31.
The property tax rate for 2019 was $.78 per $100 valuation. This rate was down from a high of $1.80 in 1992. Based on the tax rate, annual MUD taxes for a home valued by the Fort Bend Central Appraisal District at $200,000 would be $1,560. For most of us with mortgages, these taxes are paid by the mortgage company from our escrow account. The total amount of bonds AUTHORIZED by voters since the creation of the district is $90 million. However, the amount of bonds ISSUED and incurred debt to date is approximately $62 million. When bonds are issued, that means the district actually SELLS that amount in bonds, receives the proceeds to pay for infrastructure construction, and then begins making debt service payments to repay the amount sold.
HOA Boundaries can be toggled on in the map above.