The Legislative Budget Board in cooperation with the Water Development Board (TWDB) and Texas Commission on Environmental Quality (TCEQ), has determined the following:

Subject to a confirmation election, the bill would create the Galveston County Municipal Utility District No. 62 in Galveston County with the powers and duties of a Municipal Utility District (MUD) governed by Water Code Chapters 30, 49, 50 and 54.

1) Population- Though the boundaries of the district could not be located, the area in which it would be sited is a sparsely populated part of Texas City, with a year 2000 population of less than 100 people.  The Texas City population projections approved for use in the 2006 Region H Water Plan show a slight increase for the city from 41,521 in 2000 to 41,891 in 2010.

2) Location & Size- The proposed district will be composed of two tracts for a total of 215 acres.  The initial point in the description of the boundaries is the intersection of F.M. 1764 and the Galveston, Houston & Henderson Railroad line adjacent to State Highway 3.  Staff is unable to determine the exact boundaries of the proposed district, but the district will be within the City of Texas City and the City’s Certificate of Convenience and Necessity area (10132).  The legislation states that in addition to the powers given to a MUD in the Water Code, the district has the power to build roads, convey roads to the City, tax, sell bonds and the power of eminent domain, with the City’s approval.

3) Powers- As with general law MUDs, the District would have the power to provide water, wastewater, and drainage services. The District would also have the powers of a road utility district pursuant to Chapter 441, Transportation Code, the powers of a navigation district pursuant to Water Code Chapters 60 and 62, and the powers of a municipal management district pursuant to Chapter 375, Local Government Code.

4) District Finances- Consistent with general law for municipal utility districts. The District may issue tax and/or revenue bonds, levy a maintenance tax, and set fees and rates. The District must have 2/3 majority of voter approval before imposing a maintenance tax or issuing bonds payable from ad valorem taxes. The District may issue bonds, notes or other obligations secured by revenues other than ad valorem taxes without an election. Bonds issued for road improvements must be approved by a 2/3 vote and cannot exceed 1/4 of the District’s assessed valuation.

5) Board of Directors- The District is to be governed by a board of 5 elected directors. The directors will serve staggered 4-year terms. The first three initial directors will serve until May 2007 and the remaining two directors will serve until May 2009.

6) Eminent Domain- Same as general law districts, the District will have the power of eminent domain under Texas Water Code Chapter 49. The District must obtain approval from the City of Texas City before exercising this power.

7) Ability to Tax- Yes, for bonds and maintenance purpose, subject to voter consent, which is consistent with general law for MUDs.

8) Ability to Exclude Property- Same as general law MUDs, the District has the power to exclude property.

9) Overlapping Services- An adequate boundary description was provided for the proposed District. The proposed District appears to overlap the City of Texas City CCN Nos. 10132 and 20050. However, the Commission does not have information to perform overlap checks of the proposed District boundary relative to other city service areas, county service areas, and unknown district service areas.

10) Adequacy of Boundary Description- A closure check of the description of the proposed District has been performed and the boundary does appear to create an acceptable closure.

11) Comments on Powers /Duties Different from Similar Types of Districts- The District has the powers of a road utility district including the power to contract with an organization created under Chapter 431, Transportation Code, for a joint road or facility. The District also has the powers of a navigation district including the powers to purchase, construct, acquire, own, operate, maintain, improve or extend canals, waterways, bulkheads, docks and any other improvements as necessary. The District has the power authorized for a tax increment reinvestment zone operating under Chapter 311, Tax Code, all or any part of the District is eligible.

12) TCEQ’s Supervision- As with general law districts, the TCEQ will have general supervision authority, including bond review authority of all water, wastewater, drainage and recreational facility projects and review of audit reports. The TCEQ review of road and navigation projects is limited to the financial feasibility and shall not include the review or approval of the design and construction of such projects.

13) State Water Plan Objectives- Water Use: The proposed district would be located over the Gulf Coast Aquifer and would be located in the Harris-Galveston Coastal Subsidence District.  Only seven percent of Galveston County’s water use was supplied by groundwater.  Of the groundwater used, 89 percent went towards municipal uses.

The vast majority of water used by Texas City is surface water purchased from the Gulf Coast Water Authority.  Though the proposed district may obtain its water from groundwater wells, it is more likely that the district will contract with Texas City for surface water.