It is not well known that the City currently has 12 MUDs within the city limits with more applications awaiting approval. This is additional work for city contract management staff to assure the MUDs are in compliance with state law. This will ultimately result in hiring more city staff!
MUDs are authorized to impose taxes and sell bonds. These bonds, which are to be used to build infrastructure, will be paid by the residents/property owners within the MUD.
This allows the developer to transfer his costs to the new property owners in the MUD. At the same time, the City gets paid for the services it provides and does not incur any debt and associated payments. The City will be free to raise it's fees to the MUD without raising property taxes, and the MUD will just raise its taxes.
This is a classic example of socializing private costs to the public property owners.
Since the developer has to pay for minimal development costs, his profit is maximized with the help of the State of Texas and the City of Georgetown. What a deal!
Have developers, with help from the City, found a new way to transfer development costs from the developer to the home owners and renters?
It certainly appears to be the case!
Why are there MUDs within the city limits and more are requested? Inquiring minds would like the answer.
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