Special district proposals grow in Georgetown From the cover
Terms to know
How do MUDs work?
Without MUDs, these projects would either:
A MUD is a type of special purpose district authorized by the state Legislature that functions as an independent limited government.
MUDs are special-purpose districts created by the state and used by developers to fund the upfront costs of building new communities in unincorporated areas—land outside city limits not governed by a municipal government—such as infrastructure for water, sewer, drainage and roads, according to the Texas Municipal League. Unlike city residents, MUD residents typically do not receive municipal trash pickup or police services, and instead rely on county resources or private services. Developers use other forms of special districts like PIDs, which can finance more than a MUD can and imposes an assessment instead of a tax, Woolery said. PIDs are typically created, governed and operated by the city, Schroeder said. MUDs can be created through the Texas Commission on Environmental Quality, the state Legislature and a consent agreement with the city if they’re in the ETJ, Schroeder said. Since 2023, Senate Bill 2038 has allowed landowners to leave—or deannex—from a city’s ETJ through petition or election, making way for the creation of more MUDs.
Cost more per property
Be smaller
How are MUDS created?
1. Petition
2. Review
TCEQ reviews public hearing requests from interested parties and the county court. If a requester is affected, there will be a hearing followed by a judge’s ruling. 3. Government
4. Annexation
Property owners within a proposed district must petition TCEQ to create the MUD. The developer must put up a letter of credit equal to 30% or more of the cost of subdivision utilities.
The TCEQ evaluates the petition, holds a public hearing and either grants or denies the requests.
New sites can be annexed into a MUD through a formal request to the MUD's attorney or engineer. The board votes to approve or deny the request.
To live in a MUD outside of the city
To live in the city
Higher property tax rates than city residents
Lower property tax rates than MUD residents
Fewer property regulations
City zoning and property regulations
More new housing options
High city impact fees for new developments
Typically more access to outdoor amenities
Parks and rec development funded by city
Vote for representatives of MUD boards
Residents can vote in city elections
SOURCE: TEXAS MUNICIPAL LEAGUE, TEXAS WATER CODE/COMMUNITY IMPACT
Diving in deeper
has been responsive to community requests and transparency improvements. “Smaller government programs like this that keep more decisions in the hands of the communities that they’re in is valuable,” Dunn said.
have set tax rates, according to county officials. Residents in MUDs often face higher tax rates than those within city limits. Schroeder said a homeowner’s monthly payment can be hundreds of dollars more if they have a MUD tax. Laurie Dunn lives in MUD 31 and said she’s willing to pay higher taxes, as the board of her MUD
MUDs are governed by locally elected boards, often chosen in low-turnout elections where only a few residents qualify to vote because the land is typically undeveloped at the time, according to previous Community Impact reporting. There are 83 active MUDs in Williamson County, according to the TCEQ. Since 2020, 21 new MUDs
Comparing tax rates
MUD bonds can be used to fund:
Water, sewer and drainage infrastructure
Road projects
$1
$0.75
Waste services
Parks, trails and other recreational amenities
$0.5
When a resident buys a house in a district, they are notified of the following:
$0.25
Money voted on in past bonds that can be sold The number
$0
Tax rate
The purpose of the district
of bonds to be funded to date
SOURCE: WILLIAMSON COUNTY, TEXAS MUNICIPAL LEAGUE/COMMUNITY IMPACT
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