TO:	Honorable Eddie Lucio, Jr., Chair, Senate Committee on Intergovernmental Relations
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB2245 by Campbell (Relating to the creation of the North Hays County Municipal Utility District No. 2; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.), As Introduced

The Legislative Budget Board, in cooperation with the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ), has determined that:
 
This bill creates North Hays County Municipal Utility District No. 2 (District) with the powers and duties of a standard municipal utility district under Water Code Chapters 49 and 54.

Population -The very specific description of the proposed boundaries does not allow staff to develop precise population estimates. Based on the Original Texas Land Surveys mentioned in SB 2245, staff is unable to determine a population estimate.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for areas of Hays County served by small systems or private wells (County-Other) is 35,048. The Hays County-Other population projections approved for the 2017 State Water Plan projects the population to grow to 42,032 in 2020, 49,902 in 2030 and 78,147 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Hays County Real Property Records and metes and bounds. Due to the complexity of these boundaries for the various sub areas of the district, staff was able to determine only the general location of the proposed district.
 
The proposed district's area is approximately 1.08 square miles in eastern Hays County, located within the city limits of Kyle and south of the City of Buda along Interstate Highway 35. The proposed district may overlap portions of an existing Certificate of Convenience and Necessity (CCN) boundary held by City of Kyle.
 
Comments on Powers/Duties Different from Similar Types of Districts:  This bill grants the District authority for road projects; this bill allows the District to divide; the bill specifies that at the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from ad valorem taxes may not exceed one-fourth of the assessed value of real property in the District; if the bill does not receive a two-thirds vote of all members elected to each house, the District may not exercise the power of eminent domain; House Bill 4273 by Rep. Isaac is the companion to this proposed bill.
 
Overlapping Services:  TCEQ does not have mapping information for water and/or wastewater providers because this function was transferred from the TCEQ to the Public Utility Commission on September 1, 2014.  As a result, TCEQ is unaware of possible overlapping service providers.
 
TCEQ's Supervision:  As with general law districts, the TCEQ will have general supervisory authority, including bond review authority and review of financial reports.

Water Use - SB 2245 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution".

Within Hays County, 40 percent of the total water use was groundwater (Edwards Aquifer) in2014. Eighty two percent of all the groundwater pumping was for municipal use.The water source of the proposed district might pursue is unknown.