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The Investigation
Hidden Levy · Part 5 of 12
How a board of five neighbors can issue twenty years of debt
Municipal Utility Districts were designed to fund water and sewer for places cities couldn't reach. In Harris County, they now fund a lot more — and the people paying are the people who don't know they exist.
By David · ~5 min read
The MUD I sat in two weeks ago is one of 902 in Texas. Most were created the same way: a developer needs water and sewer for a subdivision the city can't or won't serve, so the legislature creates a special-purpose district with the authority to issue bonds against future property tax revenue.
This was a perfectly reasonable invention in 1971. It is still, in many cases, a reasonable invention. The problem is what's been bolted on since.
"The system worked exactly the way it was supposed to work. The result is that the people paying the bill have no idea they're paying it."
A modern MUD board has authority over water, sewer, drainage, fire protection, parks, road improvements, and recreational facilities. Each carries bond authority. None requires city council approval, because the MUD is not part of the city.
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Next week →
Part 6 — Following one MUD's bond from issuance to your mortgage statement
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