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. 54 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- 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 to 268,714 in 2010.

2) Location & Size- The proposed district will be composed of 35 acres and appears to be located in the area northwest of the IH 45 – FM 1765 intersection, within the City of Texas City and 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 also have the powers of a municipal management district pursuant to Chapter 375, Local Government Code, and limited authority related to road projects. 

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 powers of eminent domain outside the District only to acquire an easement necessry for underground water, sewage, or drainage facilities that services 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 and Galveston County DD1 3185000. 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 has small gaps.

11) Comments on Powers /Duties Different from Similar Types of Districts- The District has the powers to create a nonprofit corporation to implement a project or provide a service under Chapter 431.  

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 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 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 perhaps more likely that the district will contract with Texas City for surface water.