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. 64 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. 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 91 acres and appears to be located in Texas City, in an area between State Highway 197 and Moses Lake. 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 (Water Code Chapter 54), the powers of a navigation district (Water Code Chapters 60 and 62) and road powers.

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.

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 initial 5 board members are named in the bill. The first three listed shall serve until May 2006, the remaining two listed shall serve until May 2008.

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 may exercise the power of eminent domain outside the District only to acquire an easement necessary for underground water, wastewater, or drainage facilities that serve the District.

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-Data not available.

9) Overlapping Services- An adequate boundary description was not provided for the proposed District. Therefore, an overlap check could not be determine.

10) Adequacy of Boundary Description- Not enough information was provided to determine whether the tracts form adequate closures.

11) Comments on Powers /Duties Different from Similar Types of Districts-The District may purchase, construct, acquire, own, operate, maintain, improve, or extend, inside and outside the District, canals, waterways, bulkheads, docks, and other improvements or facilities. The District may provide for the construction, maintenance, and operation of roads or works, facilities, or improvements in aid of those roads. The District must have the consent of any road projects of any municipality or county in whose jurisdiction the District is located. Bonds or other obligations issued for road purposes may not exceed 1/4 of the assessed valuation of the real property of the District and must be approved by a 2/3 majority of voters.

12) TCEQ’s Supervision- As with general law districts, the TCEQ will have general supervision authority, including bond review authority and review of audit reports.

13) State Water Plan Objectives-Water Use: The proposed district would be located over the Gulf Coast Aquifer and would be part of the Harris-Galveston Coastal Subsidence District. Only seven percent of Galveston County’s water use was supplied by groundwater. Eighty-nine percent of the groundwater 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.