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. 63 in Galveston County with the powers and duties of a Municipal Utility District (MUD) governed by Chapters 49 and 54, Water Code and Section 59, Article XVI, Texas Constitution, and certain navigation district powers under Chapters 60 and 62, Water Code.

 1) Population- The proposed district’s boundaries are described through named tracts recorded in the Galveston County Clerk’s Office, so staff is not able to provide a more detailed description of location or population.  The population projections approved for use in the 2006 Region H Water Plan show a slight increase for the county from 250,158 in 2000 to 268,714 in 2010.

2) Location & Size- The District includes approximately 258.9 acres within Galveston County.  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.  This point, however, would place the proposed district within the City of Texas City and within the city’s Certificate of Convenience and Necessity area (10132).  The legislation states that all roads created by the district must meet the engineering standards set by the city and the district must obtain the city’s approval prior to using the power of eminent domain.

3) Powers- As with general law MUDs, the District would have the power to provide water, wastewater, and drainage services. The District would have the powers granted a navgation district created under Section 59, Article XVI, Texas Constitution, and to the extent authorized by Section 52, Article III, Texas Constitution, the District would also have limited powers related to a road project.

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- The District may exercise the power of eminent domain outside the District only to acquire an easement necessary for underground water, sewage, 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- 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 could not be performed on the boundary because of inadequate metes and bounds information.

11) Comments on Powers/Duties Different from Similar Types of Districts- The District 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. 

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 Texas City for surface water.