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What Exactly Is A Water
District?
The simple answer
to that question is that it is a local political subdivision of the State,
governed by a board of directors. Also known as MUDs -- Municipal Utility
Districts -- they are authorized under the Texas Constitution, Article
III, Section 52, or Article XVI, Section 59.
ENABLING LAWS
With the
passage of the municipal bond law in 1895, cities were given the authority
to issue tax-supported bonds to acquire a water supply. This financing
had to be within the tax limits prescribed by the Constitution.
In
1904, Section 52 of Article III authorized the Legislature to pass laws
permitting counties, districts and all other political subdivisions of the
state to issue bonds in an amount not to exceed one-fourth of the total
assessed value of real property for the "improvement of rivers, creeks,
and streams to prevent overflows and to permit the navigation thereof or
irrigation thereof...." This amendment also authorized the Legislature
to permit any county, district or political subdivision to levy a tax at a
rate sufficient to pay the principal of and interest on such bonds.
After
the terrible floods in Texas during 1912-14, people across the state
realized there was a real need to confirm the State's duty to not only
prevent floods but, also through the storage of flood waters, to conserve
the water for beneficial usages. This was the genesis for the passage of
Section 59 of Article XVI in 1917, which allowed water districts to
operate with unlimited bonded indebtedness.
In
1925, legislation was passed which authorized the creation of Water
Control and Improvement Districts -- WCIDs -- with the same bonded
indebtedness and taxing authority.
HOW WATER
DISTRICTS ARE CREATED
To
create a new water district, a developer files an application through the
Office of the State Attorney General to the Texas Commission on
Environmental Quality (TCEQ). The application outlines the developer's
plans for providing various services such as water, sewer and drainage to
areas where municipal services are not already in place. A Board of
Directors is established, which is assisted by qualified professionals who
provide services on a fee basis.
One
of the most important features about water districts is that they are
governed by a board of directors elected by the voters in the district.
This board is responsible for conducting all the business of the district,
including services or functions contracted to other parties.
Water
districts must comply with the Texas Open Meetings Act and the Texas Open
Records Act and have an annual audit performed by an independent auditing
firm. The best way to learn about the function and responsibilities of
your water district is to attend a meeting.
Not
all water districts are created equal. Some are established under General
Law by the Texas Commission on Environmental Quality(TCEQ); some by
Commissioners Court; and others are created by the governing board of a
city. Special law districts are created by an act of the State
Legislature. All water districts, however, must comply with the laws
contained in the Texas Water Code.
MUD RIGHTS AND
RESPONSIBILITIES
While
the powers and responsibilities of a specific water district are
determined when it is created, water districts are generally empowered to:
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Incur Debt:
Most districts can issue bonds and other forms of debt. If that debt is
to be secured by tax revenues, voters in the district must approve the
plan. In most cases, bonds secured in this manner must also be approved
by the TNRCC.
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Levy Taxes:
If voters approve unlimited tax bonds, a debt service tax to pay the
bonds is also approved. Each year, the water district board is
obligated to levy a property tax adequate to cover the debt. This tax
is levied on all property in the district based on appraised value,
regardless of services received, and must comply with the Property Tax
Code. The tax rate must be published each year and public hearings held
if the effective tax rate increases more than three percent over the
previous year. District voters may also approve a maintenance tax.
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Adopt Rules
and Charge for Services: The
district adopts rules which specify the method, terms and conditions of
water supply and sewage treatment service.
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Expend
Public Funds: Districts can spend
public funds for authorized district activities.
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Contract for
Goods and Services: For contracts
more than $15,000, the district must obtain three competitive bids. For
those more than $25,000, the district must advertise for competitive
bids.
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Obtain
Easements: In order to install,
inspect, repair and maintain water distribution and collection lines, a
district may obtain and use easements to access land owned by another
person; and to
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Right of
Eminent Domain: Purchase property
for district purposes under this legal provision if deemed necessary and
approved by the board.
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