Liberty County Commissioners Court listens intently to attorney Scott Bounds from Olson and Olson, LLP as he presents the various types of districts that can be formed throughout the county and state.

Liberty County Commissioners Court listens intently to attorney Scott Bounds from Olson and Olson, LLP as he presents the various types of districts that can be formed throughout the county and state.

Colony Ridge Land developer Trey Harris, whos developing 9,000 lots in the Plum Grove area of Liberty County, shows maps with details on what he is trying to do with a MUD district in the area.

Colony Ridge Land developer Trey Harris, whos developing 9,000 lots in the Plum Grove area of Liberty County, shows maps with details on what he is trying to do with a MUD district in the area.

Liberty County officials hear options for development

An advertisement providing legal notice for the creation of a Municipal Utility District (MUD) and a Municipal Management District (MMD) in the Plum Grove area lit a firestorm on social media and on Tuesday, Feb. 14, county officials and the public sought answers at a Liberty County Commissioner's Court workshop.

County Judge Jay Knight prefaced the meeting with a simple, but firm statement.

"This is an opportunity for us to learn," Knight said. "It's just educational, not confrontational. If it gets that way, you'll be escorted out of the building. That's the best I can put it," he said.

The advertisement appeared in the Cleveland Advocate Newspaper, a sister publication of the Dayton News.

Elected officials across the county and state representatives were caught off guard with the notice and a prior scheduled meeting on development tools now took on a different tone.

Knight and Pct. 2 Commissioner Greg Arthur had attended a workshop in Dayton where the topic was discussed as that city also faces the possible creation of multiple districts in its city limits and ETJ (Extra Territorial Jurisdiction).

Commissioners had already planned the meeting before the lid blew off the pot in the Plum Grove area.

"We invited some folks to come and educate us," Knight said, and with that the meeting began and ended without any incidents.

The county judge introduced attorneys from Houston who were specialists in these types of development tools to make a presentation.

"A lot of these development tools are property owner driven. They're not always governmental entity driven although they may end up operating them," said Scott Bounds, attorney with Olson and Olson, LLP.

Since the facts are not known, Bounds said he could only talk generically about some of the tools that were made available by the Texas Legislature.

"A lot of times how the law applies to a particular situation is very fact intensive, and the statutes are fairly complex as well, so our answers will be more at a 30,000-foot level on how these things work," he said.

Bounds began by saying the districts and their creation come straight from the Texas Constitution with the legal basis on how they are to be operated.

The districts themselves are created by a special act of the Texas legislature or by a petition, notice and hearing process before the County Commissioner's Court and or the Texas Commission on Environmental Quality (TCEQ).

The request generally comes from the property owners or developer, but can be made by almost anyone.

"The districts," Bounds said, "are a way to provide additional governmental services to a defined geographic area whether inside or outside of the city. They are more commonly created in the unincorporated areas of the county to provide services that the county is not authorized to provide."

He listed the development districts available by the state legislature as Freshwater Supply District, Irrigation District, Municipal Utility District (MUD), Navigation District, Water Control Improvement District (WCID), Water Improvement District, and Public Improvement District (PID) all with overlapping or different types of services that they can provide with methods to pay for those.

"There are thousands of layers of districts in the state of Texas that are providing additional services to their residents," Bounds said. "They can get costly for the taxpayers."

Knight asked Bounds to focus on the two under consideration: a Municipal Utility District (MUD) and a Municipal Management District (MMD).

"The most common district you're likely to encounter is a Municipal Utility District in Texas," he said. "They are created primarily because they have a broad range of powers providing water, sewer, drainage, other governmental services related to garbage, some roads and parks."

Bounds answered some concerns stating the only persons liable for the bonds lie only within the district itself.

"Taxpayers in that district have to vote on the bond indebtedness and they assume the liability only. The city or the county outside of that area is not responsible for the debt," he said.

Bounds continued telling the court that only the people within the district have control of the district and they alone can vote.

They are generally under the oversight of the TCEQ and the Texas Water Code.

Once the district has been approved, the state legislature appoints an interim board until there can be an election. The developer cannot be on the board depending on where he lives. If they do not live in the district, Bounds said he didn't believe the developer could be on the board.

"We already have WCIDs and ESDs and their board of directors are required to live within that district," said Knight. "I would anticipate that this would be the same."

One participant asked how they the people of the proposed MUD district in Plum Grove could afford more taxes when they can't afford decent houses.

"I don't feel like they will be represented property," the participant said.

But the vote will be in their hands and they can certainly vote no to the proposition.

Notifications must be published at least 30 days in advance in the newspaper and notifications must be sent to the state senator, state representative, TCEQ, the governor, and the city with which it affects their ETJ.

"If it's created through TCEQ, the county basically has no political standing," said Tim Green, attorney from Coats Rose Corporation. "But if it's done through the state legislature, it's a political process. You have political input. The Senator is going to look to see if there's any opposition by the commissioner's court."

Green, the attorney for Harris, is the one who drafted the legislation for the creation of the district and whose practice is 99 percent the creation of and representation of the districts.

"I think his [Trey Harris] motivation is two-fold. One is, he anticipates in the long run that he's going to have some commercial development within his property and he would like to capture the sales tax revenue off that. Secondly, use it either on its own or in combination with an ad valorem tax if the residents approve it to provide what has been described to me as supplemental law enforcement, EMS, firefighters and maintenance of the public infrastructure, including roads," Green said of his client.

"Trey has told me multiple times that he's not looking for this district to issue bonds and tax people to reimburse him for the infrastructure, isn't that correct?" as Green turned to Harris and asked.

"That's absolutely correct," Harris responded.

But that's not exactly what he told the Cleveland Advocate earlier.

In an interview with the editor of the Advocate, Harris said the MUD district also will allow his company to recoup some of its infrastructure costs while providing funding for police, EMS, fire and trash service.

"A lot of times MUDs will reimburse the developer for the costs of water and sewer systems and improvements," he said in the Advocate interview. "My purpose for the MMD? The MMD is the commercial arm of the district. In the future, the population here is going to grow so large that there will be a need for commercial demands, like grocery stores. I will be able to collect a sales tax and provide economic incentives to try to attract the major commercial retailers to Liberty County."

No one is certain of his motives except by his own words, he will help provide maintenance for the roads if the funding is there.

There was also some concern that the boundaries of the district could be expanded.

"There is no way that the boundaries, once created, can be expanded unless someone comes to the board of directors for the district and petitions them to allow them to come in," Green said.

Harris spoke up and offered clarification on his position.

"What I'm trying to provide is better quality housing on the ground. By providing better services, for the higher end customer who wants to know how far it is to the nearest grocery store, or the nearest police support, or ambulance, or the nearest school. The guy in the Mercedes will drive away. I'm trying to keep that customer," Harris said.

Harris said his seeking higher end homes was a request by Pct. 4 Commissioner Leon Wilson.

"That's one of the vehicles I can use to create that, depending on how much money the district creates, maybe I can help with the roads, but I won't be able to if there is no money coming in," he said.

Harris said he intended to use the Municipal Management District (MMD) only in the commercial area and use those funds to help with the fire, EMS, police sub-station and more if possible.

The meeting ended with Harris laying out his maps and reassuring residents his intentions were good.

The rest is here:

Liberty County officials hear options for development - Chron.com