Response to E-mail (Part 2)

As for your post on September 22, 2011 on the tax rates remaining the same, you mention that nearly everyone's house value has gone down. HCAD tells us our house went up in 2009 but has remained the same in 2010 and 2011. Has other's in the Brunswick area gone down (without contesting)? With a larger base and I would expect a smaller per-household district expense, I would have expected the rate to decrease. Your explanation of how it really works is great - it's never as simple as it looks! Did the other three board members mention why they voted against it? 

 

I posted about this before being elected to the Board, in part. Click here. 

But since joining the Board I have more insight as to why the other three Board members are so opposed to ever raising taxes. Originally, the District served only Morningside Place and the debt they incurred was resulting in crushing tax rates for their small neighborhood. They were facing tax rates of nearly 2% of their home values. 

 

Developers came to them offering to build Morningside Place 2 and the Brunswick neighborhoods to reduce their tax burden. They jumped at the chance. And their tax rates did fall. But apparently promises made by the developers were overstated and there were many conflicts between the Board members and the developers. Then the economic downturn made the house values fall, which reduced the amount of taxes being collected. But the debt had already been incurred for the new developments and to building the new waste water treatment plant on Fellowes Road as well as the new water well being drilled on Furman. That debt must be paid off and the majority of our taxes goes toward that debt relief.

 

In my humble opinion, the 3 members of the Board from Morningside feel that they were lied to about the tax relief promised and are reluctant to raise tax rates as a result. 

 

Do the bonds end up costing home owners at least as much as raising the tax rate? Does it make sense that after the whole area has been bonded and built out (streets, lights, sidewalks, etc) then we would not need additional bonds and therefore with an even larger base to tax the rate would drop significantly? Or is it typical for a MUD to need to raise additional funds or have a huge debt and therefore need to raise rates further at this point?

 

The bonds are the way the District borrows money to build the infrastructure (new waste water treatment plant and new well) and repay the developers for the infrastructure that they build (streets, sidewalks, detention ponds, lights, etc.) The taxes pay off the debt and the tax rate fluctuates depending on the need for money to repay the debt. When the need for additional bonds ends, the need to pay off the debt remains. So it is possible that the tax rate may increase or decrease in the future. Much has to do with the appraisals of the values of homes in the District, which is of course dependent on the state of the economy.

 

It is mysterious to me as to why we need MUDs in the first place. I understand Texas may be the only state with MUDs so as an out-of-stater I have a lot of learning to do!

 

A brief history of MUDs in Texas:

1925-1971 - The legislature authorized the creation of a group of regulatory agencies and the creation of a variety of types of water districts. A triad, consisting of the Texas Water Rights Commission (TWRC), Texas Water Quality Board (TWQB), and The Texas Water Development Board (TWDB), slowly evolved into The Texas Water Commission. The general laws now provide for 13 different types of water districts.

1971 - The legislature passed the Municipal Utility District Act that added Chapter 54 to the Texas water Code. The Act was modernized and streamlined piece of legislation governing a specific type of district - municipal utility district - which, under supervision of the Texas Water Commission, is designed to be used in conjunction with urban lands.

1993 - A group of regulatory agencies, consisting of the Texas Water Commission, The Texas Air Control Board and The Texas Health Department, were combined and reorganized to form The Texas Natural Resources Conservation Commission (TNRCC) with supervisory jurisdiction over all types of utility districts, including MUDs.

1995 - Chapter 49 was added to the Texas Water Code to provide a common set of laws and procedures governing all types of special water districts. Most, but not all, of Chapter 54 of the Texas Water Code was repealed, but selected portions of Chapter 54 relating specifically to municipal utility districts are still in effect. The result is that both Chapters 49 and 54 of the Texas water Code govern municipal utility districts.

The Texas Water Code has been amended almost every year since 1995 that the legislature has been in session. The TNRCC changed its name to Texas Commission of Environmental Quality, or TCEQ.

WCID#89 started in the 1960s and after the 1971 law, changed to a MUD, but kept the Water Control & Improvement District (WCID) name.

 Are MUDs inherently more efficient than what every other state does? If our MUD taxes are used to pay for infrastructure, why are our water bills five times more expensive than the city of Houston's? When I lived in the Heights in 2009, 2,000 gallons was less than $10. It's almost $50 here. That's a difference of about $500/year. That's on top of a property tax rate of 0.75% more (about $600/year per $100,000 house value after homestead exemption). Tell me again what the long-term benefit is of living in an expensive MUD? 

Having been a Texan all my life I can't really speak to the efficiency aspect compared to other states.  MUDs are more prevalent in Harris County than anywhere else in the state. They were designed to allow developers more power and control over the neighborhoods that they built outside city limits. And any time the Texas Legislature can reduce governmental control and increase power of private enterprise, they'll do it.  

One of the selling points by the developers is avoiding city taxes and laws. That's why we can shoot off fireworks when those who live north of Almeda Genoa can't because they are in the city of Houston. Developers also claim that they can build better infrastructure because they are willing to put the money up front and be repaid rather than wait on the city to raise the money. 

On the other hand, we don't get city services like trash pick up and police protection, which is why we have to rely on Harris County Sheriff, unless we contract for our own services, and why we pay Waste Management to pick up the garbage. Those services are paid out of the operation budget and come from the maintenance taxes - not the debt portion of the taxes.

By law we have to buy 80% of our water from the city of Houston, so whenever they raise their rates, we pass that extra cost on to the residents. The water bills don't have anything to do with the taxes to pay for the infrastructure.  You must remember that the property tax rates are based on the appraisals of the home values and the size of the jurisdiction. Houston can afford lower tax rates and lower water bills because they have millions of homes and taxpayers to share the responsibility. We have only about 2000 sharing the tax burden.

Long term benefit to being in a MUD? None I'm aware of. Only three ways out of the situation. 

1. Move out of the MUD.
2. Have MUD expand when the debt burden gets too crushing.
3. Get annexed by a local city. 

Thanks for the thoughtful e-mail and I hope that I have answered your questions.

Response to E-mail (Part 1)

I recently received the following e-mail and would like to address each section. 

I appreciate you being on the board and keeping us all informed about interesting topics. There appears to be a constant "us vs them" or "new vs old" disagreement going on. It's also curious why your questions are not always returned with straightforward answers. I hope it doesn't discourage you - it might discourage me!

Truth be told, I do get discouraged serving on this Board because of the 'us v them' disagreements and the lack of simple civility in the meetings. The 'us' is me and AK Babers; the 'them' is the three members who are all up for re-election this year in November - Sharyn Smalls, Byron Watson, and Arthur Washington.

The Board fails to act in a professional manner, with nearly every meeting falling into some sort of petty dispute. And lately, those arguments have not even been related to policy matters. They have been personal attacks on AK.

I had not posted on these matters because, quite frankly, it's embarrassing enough to have to endure them at the meetings. Rehashing them here seemed pointless. However, there was a concerted effort on the part of 'them' to sanitize the minutes of the 11/15/11 meeting regarding the discussion surrounding the vote on the Harris County Appraisal District (HCAD) Board. I think it was a grave injustice to AK and he and I both voted against adopting the minutes in their sanitized form. I will speak out on what really happened here.

AK expressed an interest in serving on the HCAD Board and we nominated him for the position. At the 11/15/11 meeting we were presented the ballot of candidates for the HCAD Board. Arthur asked if AK would be able to make the HCAD meetings, considering he was already serving on our Board and had a full-time job. AK said he would. 

Sharyn then stated that AK should know more about HCAD and hadn't done any research to show he was a serious candidate. AK objected to her accusation and the fight was on.  Sharyn made several unfounded accusations about AK's intentions and his performance on our Board, including inflating the number of absences that AK had at our Board meetings. She also overstated the number of absences that I had. Tempers flared and many harsh words were exchanged. Eventually the motion was made to vote for AK on the HCAD ballot, and it passed 4-1, with Sharyn the only dissenting vote. She then refused to sign the HCAD ballot, which was her duty as President of the Board, but eventually relented.

It was later discovered that her information on the attendance records started as an open records request from a former Board member. Because there is no official record of attendance except for what the minutes of the meeting reflect, Sharyn had instructed our attorney to provide the bookkeeper's payroll records to the former Board member and herself in reply to the request. There was no attempt made to inform me or AK that the request had even been made. She then used that information to blindside AK in the meeting. Needless to say AK had every right to feel that her attempted assault on his character was more than unwarranted, premeditated, and disrespectful. 

At the next meeting on 12/5/11, AK asked that the Board's continuous lack of professionalism in the meetings be addressed. He also stated that any open records requests and any responses made should be shared with the entire Board, which the attorney agreed to do.

FYI - I have attended all but 8 of the meetings since elected to the Board. As I stated in previous blog postings, I was laid off in January and had major surgery on June 29th, which interfered with my ability to attend several meetings. The dates/reasons I missed meetings are below:

8/17/10 was on vacation planned way before I was elected to the Board

2/1/11 new job - was in training

2/15/11 new job - was in training

March - made both meetings and tried to get time of meeting changed due to conflict with Commissioners Court meetings, which my new job required me to attend. The Board voted 3-2 to not change the meeting time. AK & I both voted to change it; Arthur, Sharyn, and Byron voted to not change it.

4/5/11 in conflict with work duties - arranged for someone else to cover CC meetings so I could make Board meetings.

6/21/11 work related conference out of state

7/5/11 recovering from major surgery

7/19/11 recovering from major surgery

8/2/11 recovering from major surgery

 

By the way, I actually like the fact the elections have been moved to November - I like the cost savings and I think we will get a much better response. More people make an effort to go to the polls in November than in May.

I agree that moving the election of Board members to the general ballot in November is more efficient and hopefully will result in better turnout. My only concern is that we will be at the bottom of the ballot and might be skipped as a result. 

Two people from Brunswick Meadows have petitioned to be put on the ballot -  Karri Garza and CG Johnson. I plan to request information from every candidate, including the incumbents, to post on this blog closer to election time so that everyone can make an informed vote. Now on to the next part of the e-mail....