The Resolutions adopted by the County Judges and Commissioners Association of Texas (CJCAT) originate among members of Commissioners Courts and serve as the CJCAT Legislative Platform. Resolution Spotlights are designed to explain the history behind the Association Resolutions. Rockwall County introduced the following spotlight.
Municipal Utility Districts and Other Utility Districts
County Judge or Commissioner → Association → Legislature
A municipal utility district (MUD) is a state governmental entity that provides utility services to designated areas.
A MUD can be created by the Texas Legislature or by the Texas Commission on Environmental Quality (TCEQ) following a petition and consent process described in the Texas Water Code.
MUDs are usually created to provide water and wastewater services and maintain drainage facilities. Chapter 54 of the Texas Water Code explains the specific purposes of a MUD, https://bit.ly/watercodeMUD.
MUDs are often initiated by housing developers to build infrastructure to attract residents to developments, explained Rockwall County Judge Frank New. Developers are subject to the zoning and ordinance-making authorities in cities, which must consent to a MUD; counties have very limited authority and cannot prevent the creation of a MUD.
MUDs are managed by a board, which is elected by property owners within the MUD. A MUD may issue bonds to reimburse a developer for authorized improvements.
As was the case in the creation of Rockwall County MUD #10, developers sometimes arrange for the placement of one voter in a temporary residence on the acreage within the proposed MUD, New observed. One vote is all it takes to create the district, establish a board of directors with borrowing authority, and obligate future residents to a tax burden, New continued.
To complicate matters, MUDs do not provide for needs beyond utilities. The ease with which MUDs can be established has led to overdevelopment of areas, New elaborated, where unsuspecting residents may be left without expected services, including emergency medical and law enforcement, and with an unexpected tax burden. Another complication is overcrowded classrooms.
Rockwall County Story
Geographically speaking, Rockwall County is the smallest county in the State of Texas at 12 miles by 12 miles, or 144 square miles. Rockwall County currently houses 11 MUDs with three more in the works.
“I understand the necessity of MUDs out in rural areas where there aren’t utilities, where you are requiring the developers to invest their money to essentially provide the function of a city,” New stated. However, there are 10 cities that are wholly or partly within Rockwall County that provide infrastructure.
Overdevelopment of the county has resulted in neighborhoods without fully supported services and the overcrowding of area schools, New emphasized. Rockwall County ISD passed a $500 million school bond in 2021, and plans are already in the works to propose another bond next year just shy of $1 billion to keep up with growth.
“Once you are in a MUD, you cannot vote your way out of it,” New emphasized. “The developer sets up a board of directors who are not required to have elections inside of the district, and they can reissue debt for the district. It is non-transparent and immoral.”
Rockwall MUD #10
In December 2021, an application to create Rockwall County MUD #10 was filed with the TCEQ; this application triggered a ratification election.
In 2022, one voter cast a vote in the election that created MUD #10 and its board of directors. This board then borrowed $366 million for water and sanitation infrastructure and $466 million for roads, New reported. In other words, one voter cast one ballot that triggered authorization of taxes and more than $800 million in debt for residents who did not yet reside in the area.
This past summer, Rockwall County filed a lawsuit against MUD #10 alleging that the lone voter had been convicted of a felony, and felons cannot vote in Texas unless they have been pardoned or “fully discharged of the record.” As of press time, the lawsuit was ongoing.
During the 88th Legislative Session, New worked with Rep. Justin Holland on legislation to regulate the creation of MUDs; the bill passed in the House but died in the Senate Calendars Committee. New plans to work with lawmakers once again during the upcoming legislative session.
Rockwall County officials presented the issue to the County Judges and Commissioners Association of Texas, who helped develop and adopted the following resolution:
Opposition to Granting Powers to Municipal Utility Districts and Special Utility Districts
WHEREAS, city government and county government should have appropriate authority to regulate growth in their respective counties and cities; and
WHEREAS, special water districts and private water corporations have the means to furnish water and provide for growth in rural areas of the counties; and
WHEREAS, municipal utility districts and special utility districts have been improperly used by certain developers to avoid compliance with county and city infrastructure plans;
NOW, THEREFORE, BE IT RESOLVED that the County Judges and Commissioners Association of Texas opposes the granting of additional powers to municipal utility districts, special utility districts, and any special districts, and requests that the approval of the county be required before any further districts are created.