MUD Facts

Municipal Utility Districts, MUDs, are a little known taxing entity authorized by state law. In addition to property taxes, MUD residents also pay Emergency Services District (ESD) taxes, school district taxes, county taxes and sometimes other property based taxes.

MUDs are usually established by a developer to establish a taxing authority that allows bonds to be issued for the construction of water, storm drainage and sewer lines including processing facilities. This transfers the initial construction costs from the developer to the home buyer or business operator.

For instance, MUD #25, cited in the previous post, has authority to tax property at $0.92 per $100 valuation. This is more than twice Georgetown's tax rate of $0.42 per $100 valuation.

The law governing MUDs also provides for the election of a board of directors to govern the MUD. Often these boards issue huge amounts of debt for recreational and community facilities, such as are found in the Brushy Creek MUD between Round Rock and Cedar Park.

Brushy Creek MUD incurred large bond debts to preclude them from being annexed by Austin or any other adjoining city, since the annexing city would have to assume the MUD debt.

One consequence of MUDs is that it allows cities to extract money from the MUD residents to support its own utility developments in excess of what a city can charge city residents because of the higher property tax rates that MUDs are allowed to impose. This occurs when MUDs sign agreements with cities for essential services such as waste water and potable water treatment.

Growth Continues

The City Council has approved a development agreement with the owners of Parkside on the River, a development within the City's ETJ West of I35, South of SH29 and North of Leander Road. Here is a location map:

Click image to enlarge

Since the development lies outside the city limits, the City has limited ability to control development. So as a means of exerting some control, the City has signed a development agreement to provide city services in return for adherence to City requirements.

1. Quality Development. The development meets or exceeds the intent of the development, infrastructure, and design standards of City codes;

2. Extraordinary Benefits. The development provides extraordinary public benefits that advance the vision and goals of the Comprehensive Plan, such as, but not limited to, extension, financial contribution, and/or enhancement of master planned infrastructure, diversity of housing, and enhanced parks, trails, open space, and recreational amenities that are available to the public;

3. Enhance Public Service and Safety. The development enhances public services and optimizes service delivery through its design, dedication of sites, connectivity, and other features.

4. City Exclusive Provider. The development further promotes the City as the exclusive provider of water, sewer, solid waste, and electric utilities;

5. Fiscally Responsible. The development is financially feasible, doesn’t impair the City’s ability to provide municipal services, and would not impose a financial burden on the citizens of Georgetown in the event of annexation;

6. Finance Plan. The developer(s) contributes financially to cover a portion of infrastructure expenses without reimbursement by the MUD or the City and as reflected in conditions placed on the issuance of bonds by the district;

7. Annexation. The development will not impair the City’s future annexation of the MUD or adjacent property or impose costs not mutually agreed upon.

The Water Oak development on SH29 connects with the Parkside development as shown in the next two illustrations.

Click on image to enlarge

Both Water Oak and Parkside are in MUD #25 and the City will provide water and electric services through contracts with the MUD.

Finally, the following chart shows the kinds of development envisioned for the site.

Click image to enlarge

2500  new single family homes with multi-family dwellings and commercial development along Leander Road.

Firehouse Costs

Something seems to be seriously out of whack with the City's building contract system. The current "new" city hall costs $355 per SF, the Westside service center, which is a metal building with some office space, cost more than $300 per SF and now the new fire stations cost $494 per SF and $560 per SF.

By way of contrast, Liberty Hill is just completing a new fire station on Ronald Reagan similar in size to Georgetown's two new fire stations at a cost of $429 per SF.

What is going on down at Georgetown's building department? Why are they not getting less expensive bids? Have they required too many "bells & whistles", or more expensive materials?

Inquiring minds would like to know!

Also note that the two Georgetown fire stations are being funded with Certificates of Obligation, which do not require voter approval and supposedly are to fund things with a relatively short life, <10 years. Liberty Hill issued 20 year bonds to build their fire station.

Is the city abusing the use of Certificates of Obligation?

Is the City Building "Cadillac" or "Lexus" Fire Stations?

The City is getting ready to let contracts for the construction of fire stations #6 and #7.

Fire station #6 is being constructed on Williams Drive near FM 3405.

The bids are in and the City is ready for the Council to approve their recommended bidder.

Fire station #6 is 11,125 sq ft. This makes the cost $494/sq ft for a ready to occupy building.

Fire station #7 is being constructed on East Highway 29 near the Inner Loop.

Here is the cost for fire station #7.

This fire station is 10,984 sq ft and the cost is $560/sq ft.

The original agreement between Georgetown and ESD#8 was that ESD#8 would provide the land and pay for the construction of fire house #6. Assuming that has not changed, Georgetown will manage the construction contract and the outfitting of the station. Original estimates were that the station would cost $5,000,000. So, there has been an escalation in the price!

The City purchased the land for fire station #7 for about $2.08M and that is not included in the above price. The City has $521,326 carried over from the 2018 budget that can/will be used on fire station #6 or #7. The City has budgeted $6,250,000 in the Fy19 budget for fire station #7.

The question is still, why do city buildings cost double the cost/sq ft of GISD school buildings? See prior post. GeorgetownWatchDog