Best planning and implementation toolbox

Municipal Utility District:

Purpose of Tool:
A Municipal Utility District (MUD) relates specifically to providing public services to residents outside of incorporated cities. An MUD may participate in various activities, including (but not limited to):
  • Law enforcement
  • Trash collection
  • Fire protection service
  • Water, wastewater and stormwater services
  • Drought contingency plans

    MUDs are in place throughout the United States. In the State of Texas, an MUD is funded either through ad valorem taxes or voter-approved bonds.

    Benefits of Using Tool:
    An MUD is beneficial for providing basic services in communities that do not have those services available in their local jurisdictions, such as rural and outlying communities and areas that are experiencing rapid growth. For example, an MUD allows desirable land closer in to a city to be developed without having to depend on wells and septic tanks for water and wastewater services. The flexibility afforded by these districts can further stimulate urban-types of growth in these rural/unincorporated areas, whether small communities or large developments.

    Steps Involved to Use Tool:
    In order to establish an MUD in Texas, the following procedure must be followed:
    1. A majority (50% or more) of property owners in an area must petition the Texas Commission of Environmental Quality (TCEQ) to create an MUD.
    2. A public hearing is held, and the TCEQ will either approve or deny the petition.
    3. If approved, a MUD board is established to authorize bonds and taxing for bond repayment.

    If a developer wants to establish an MUD, he or she must pay or place a letter of credit valued at 30% of the cost of the subdivision utilities. This protects the community from subdivisions that do not get completed or those that are not committed to the success of the district. Neither these developers nor their associates may sit on the MUD board.

    Special Requirements to Use Tool:
    Other than the conditions and procedures described above, there are no special requirements or considerations for using this tool.

    Specials Resources Needed to Use Tool:
    No specific resources are needed to use this tool.

    Communities / Agencies that Have Used Tool:

    Source: Hydropower Reform Coalition
    The Harris County, Texas MUD was created in 1973 to provide water, drainage, sewer and other services to the citizens residing on approximately 1,847 acres of land located about 23 miles from Houston, Texas. While the district is primarily residential, there are also some retail and other commercial businesses within the MUD boundary. This MUD has accomplished many projects since its inception, including the construction of three (3) water plants, a wastewater treatment plant, two detention ponds, and multiple drainage channels.  Contact:

    Gary Sundstrom - President
    2815 Spring Cypress Road, #3
    Spring, TX 77388
    281-350-0895

    The Brushy Creek Municipal Utility District in Round Rock, Texas was formed in 1977. The district, now 2,210 acres in area, was formed to support the growth of the Brushy Creek North and Brushy Creek South developments by partially reimbursing the developers for land development costs. The Brushy Creek MUD provides groundwater service and treats water from wells, and it constructed two new water storage tanks and helped develop several parks and trails in the Brushy Creek area.  Contact:

    Paul J. Tisch - President
    Place3@bcmud.org
    16318 Great Oaks Drive
    Round Rock, TX 78681
    512-255-7871

    Metrics to Use to Monitor Tool Effectiveness:
    Because different municipal utility districts initiate varying types of improvements, there are no standard, quantifiable measures on how the district improves quality of life.

    List of Resources to Obtain Additional Info:
    References:
    - What You Need to Know about Municipal Utility Districts – JB Goodwin Realtors: http://www.jbgoodwin.com/knowmud.htm
    - Municipal Utility Districts – Alamo Title: http://www.alamotitle-austin.com/library/20/MunicipalUtilityDistricts.pdf
    - Harris County Municipal Utility District No. 82 – Information Kit: http://www.hcmud82.com/informaiton-kit-2006.pdf
    - Brushy Creek Municipal Utility District Information - http://www.bcmud.org/content/95/default.aspx