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 Management District No. 1 (District) in Galveston County with the powers and duties of a Municipal Management District (MMD) governed by Local Government Code Chapter 375.

1) Population- The City of League City’s population projection for use in the 2006 State Water Plan shows an increase from 45,444 in the year 2000 to 53,546 in 2010.

2) Location & Size- The proposed district would be composed of approximately 97 acres within the City of League City and Galveston County.

3) Powers- The District has the rights, powers, privileges, authority, and functions of a general law MMD. The District has the powers given to a corporation under the Development Corporation Act (Section 4B, Article 5190.6, VTCS), the powers given to a housing finance corporation under Local Government Code Chapter 394, and the power to create a nonprofit corporation under Transportation Code Chapter 431.

4) District Finances- Similar to general law MMDs, including the authority to levy benefit assessments, ad valorem taxes, and issue bonds. A petition signed by the owners of a majority of the assessed value or surface area in the District, is required prior to financing projects. Approval of bonds by the Attorney General’s Office is required.

5) Board of Directors- The initial board consists of five voting directors, three serve until June 1, 2007 and two serve until June 1, 2009. Nonvoting members may be appointed by the Board. By resolution, the board may increase or decrease the number of directors to not fewer than five and not more than fifteen. Subsequent directors will serve staggered four year terms.

6) Eminent Domain- The District may not exercise the power of eminent domain.

7) Ability to Tax- The District may impose assessments, impact fees, ad valorem debt service and operation and maintenance taxes according to Local Government Code Chapter 375. To finance a service or improvement with an assessment a written petition must be submitted to the board requesting the service or improvement and must be signed by the owners of a majority of the assessed valuation or at least 50 persons who own real property in the District. The District may not impose an impact fee on an electric utility, gas utility or telecommunications utility.

8) Ability to Exclude Property- Same as a general law municipal management district under Local Government Code Chapter 395.

9) Overlapping Services- An adequate boundary description and location map was not provided for the proposed district. Therefore, an overlap check could not be performed.

10) Adequacy of Boundary Description- The description provided follows generally along streets and roads, a state highway, and indicates some approximate distances. The bill does not provide a detailed metes and bounds description, thus, it cannot be determined if it creates an acceptable closure.

11) Comments on Powers /Duties Different from Similar Types of Districts- Also, the District may authorize the creation of a nonprofit corporation to assist and act on behalf of the District in implementing a project or providing a service.

12) TCEQ’s Supervision- The District is exempt from TCEQ auditing and bond review authority unless the bonds are issued specifically for water, wastewater, or drainage facilities.

13) State Water Plan Objectives-Water Use: Although the district would be given powers to sell bonds and to develop a capital improvement plan, the main intent of the district would be to promote “employment, commerce, transportation, housing, tourism, etc”.  The creation of this district does not relieve the City of League City or Galveston County from providing services that they are currently providing, including water and wastewater service.  For this reason, I believe that the creation of this district would have no impact on the State Water Plan objectives.