Harris-Fort Bend Counties Municipal Utility District No. 1 Election FAQ / Harris-Fort Bend Counties MUD 1

The District owns, operates, and maintains a system of WS&D facilities, including water lines (totaling 13.5 miles), fire hydrants, 3320 water meters, sanitary sewer lines (totaling 16.8 miles), storm sewer lines (totaling 10.2 miles), weirs, storm sewer manholes, a drainage channel with outfall pipes, drainage swales, and two sanitary sewer lift stations. Additionally, the District is responsible for maintaining the hydraulic functions of twelve detention ponds. Moreover, the District jointly owns and finances the operation and maintenance of two water plants and one wastewater treatment plant with neighboring Harris-Fort Bend Counties Municipal Utility District No. 5.

What is the election?

The language below will be on the ballot for voters of the District when they go to the polls or vote by mail for the November 4, 2025 election, asking voters to select either FOR or AGAINST on the following proposition:

PROPOSITION A –

THIS IS A TAX INCREASE
THE ISSUANCE OF UP TO $17,335,000 IN TOTAL PRINCIPAL AMOUNT OF BONDS FOR WATER, SANITARY SEWER AND DRAINAGE FACILITIES AND THE IMPOSITION OF TAXES, WITHOUT LIMIT AS TO RATE OR AMOUNT, SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS

PROPOSITION B –

THIS IS A TAX INCREASE
THE ISSUANCE OF UP TO $10,000,000 IN TOTAL PRINCIPAL AMOUNT OF BONDS FOR RECREATIONAL FACILITIES AND THE IMPOSITION OF TAXES, WITHOUT LIMIT AS TO RATE OR AMOUNT, SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS

*Starting with the November 4th election, local government entities (including the District) that call a bond authorization election must, by law, include the phrase “THIS IS A TAX INCREASE” on ballot measures like those above.*

What is bond authorization?

Bond authorization is not the same thing as bond issuance. In other words, voting "for" Proposition A does not mean the District will necessarily issue $17,335,000 in bonds. Rather, authorization means the Board has the financial tool to borrow money from the bond market to fund district projects, if necessary. It is similar to a line of credit that a business might use to fund capital expenditures. Authorization is not immediate funding, nor is it a “blank check” to fund the entire amount of the authorization without meeting strict regulatory requirements. While authorization may be for a large amount, bonds may only be sold once necessary projects are ready to begin, or as needed for repairs and maintenance or replacement.

The District currently has $9,665,000 in remaining voted bond authority. In May 2016, voters of the District authorized $19,230,000 for WS&D facilities. Bonds issued out of that prior voted authorization were sold for funding necessary improvements to the District's WS&D facilities.

What will the WS&D bond authorization be used for?

The Bond Election Report prepared by the District engineer identifies the capital improvement projects the Board anticipates will be necessary over the next 15 years to rehabilitate, maintain, replace, and expand the aging WS&D facilities owned and operated by the District. WS&D bonds are needed to maintain the function of the District infrastructure and ensure continued compliance with regulatory requirements. Some examples of anticipated projects include replacement of pressure tanks, well rehabilitations, bar screen replacements, blowers, clarifiers, manhole rehabilitation, and updates to lift stations. A committee of two Board members worked with the District engineer to develop a 15-year Capital Improvement Plan (CIP), with the primary goal of utilizing only the bonding capacity needed to complete necessary projects over the next 15 years. As a proactive measure, the Bond Election Report estimates the projected costs for these projects (and required issuance costs), based on information available today.

What are the immediate goals regarding parks in the District?

The immediate goal is to replace most of the sidewalks in the District and construct a park in Parkway Oaks (which will be available to all District residents). A conceptual park plan has been prepared by the District's landscape architect that will build upon existing recreation facilities and develop new recreational facilities in various locations in the District. The District has not previously requested authorization of park bonds from voters.

What will the Park Bond authorization be used for?

The park bond authorization can only be used for the acquisition, design, and construction of recreational facilities, such as park equipment, playgrounds, and trails in the District. Planned projects include district-wide sidewalk replacement for amenity and safety purposes. Other proposed projects include the Willow Fork Drainage Channel Trail Extension, which will connect the current 10' sidewalk to Roesner and feature a pedestrian bridge, irrigation, landscaping, benches, and trash cans, in partnership with the Willow Fork Drainage District. The Parkway Oaks Park plan envisions a variety of amenities such as a soccer field, sand volleyball, pavilion, restrooms, trails, exercise stations, shade structures, however, all amenities are subject to change. Additionally, potential upgrades to the Falcon Point pocket park are anticipated, including irrigation improvements, new furniture, and a shaded picnic area, though no major rehabilitation is expected in the near future.

Why is it necessary to do these projects?

As infrastructure ages, it requires maintenance, rehabilitation, and sometimes replacement as part of its lifecycle. On average, infrastructure lasts about 30 years with optimal maintenance and operations. Based on the anticipated need for improvements to these aging facilities, the District Engineer has developed an estimate of the probable costs of the design, construction, purchase, and acquisition of the improvements and additions thereto, and incidental expenses connected with the improvements and the issuance of WS&D bonds by the District.

The District intends to issue bonds only as necessary in order to proactively maintain, and, where necessary, implement repairs or replacement to its facilities. This will enable the District to ensure reliable and continuous service by maximizing the life of its WS&D facilities.

The District was created with the consent of the City of Houston in its Extra-Territorial Jurisdiction with the expectation that eventually, the City of Houston would annex the District and assume responsibility for the District's facilities. However, the City has no plans to annex the District or any other municipal utility districts at this time, and it is doubtful if the City will ever annex the District. Therefore, tax payers of the District are responsible for funding the facilities they use and rely upon every day.

Can’t the District just pay for projects without issuing bonds?

The primary alternative to authorizing the bonds is to fund all necessary projects on a "pay as you go" basis. Accordingly, utilizing this approach would likely require large increases in the District’s maintenance tax rates and/or water and sanitary sewer rates in order to collect the required funds. If the District is forced to raise the necessary money on an as-you-go basis, it could create significant delays in the completion of large projects.

Much like a home equity loan for a major roof repair, when the District issues bonds it spreads the costs of the necessary projects over several years and avoids large spikes in tax rates and/or water and sanitary sewer rates typically required by a "pay as you go" approach. Moreover, the interest rates for the District on the repayments of its municipal bonds can be substantially lower than the comparable rates for traditional construction loans; tax-exempt bonds are an efficient use of funding for District capital improvement projects. Finally, issuing these bonds on an as-needed basis enables the District to complete necessary projects quickly when the need arises.

How are my taxes determined?

The District levies a total tax rate each year that has two components:

The debt service tax rate, the proceeds of which can only be used to make payments on the District’s outstanding bonds; and
The operations and maintenance tax rate (often referred to as M&O), the proceeds of which are deposited to the District’s General Fund and used, together with water and sewer revenue, to pay operating and maintenance expenses of the District.

These two components of the tax rate have changed over the years as the District’s debt service and operating expenses have changed.

How does the District manage taxpayer dollars?

For details regarding tax rates, click here.

Through careful supervision of expenses and planning for maintenance, the District has more than one year of operating reserves, which exceeds the common benchmark for municipal utility districts. Reserve funds earn interest and are available for emergencies. However, these reserves would not be sufficient for large-scale rehabilitations, repairs, or replacements.

I have more questions…

Good! The goal is for the residents to have all the information at their disposal when voting approaches. Additional questions can be fielded through the Contact Us form on the District’s website.

Why should I pay for something I can't use?

Property values play a key role in the ability of the District to fund its operations and capital improvement projects. Each of the subdivisions within the District are impacted if property values decrease or increase in one of the other subdivisions. As the District ages and residents put their homes on the market, they are facing competition from subdivisions with more and newer amenities. The Park Bond authorization would give the Board the financial tool to issue bonds for the construction or improvement of recreational facilities in the hopes of keeping the communities within the District competitive in the market for home buyers and, by extension, try to preserve the value of properties in the District. Any amenity built with District Funds, such as recreational facilities, can be used by all residents of the District.

Harris-Fort Bend Counties Municipal Utility District No. 1 Election FAQ

What is the District?