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MUDs

Use that mandate in Harris County

Jay Aiyer pens an agenda for Harris County and its Democratic government.

First and foremost, flood mitigation has to be at the top of any list. Harris County has taken good initial steps to improve flood control infrastructure, and the passage of flood control bonds was badly needed. Those steps however, are only the beginning of what needs to be done. Development changes that prohibit growth and expansion in the floodplain, and ideas from experts like Rice University’s Raj Makand to impose a moratorium on new municipal utility districts until the region has a comprehensive plan for flood mitigation should be considered. Infrastructure development in Harris County — everything from toll road expansion to affordable housing construction should be factored into flood control efforts. Flood mitigation needs to be the county’s top priority.

[…]

The need for ethics and transparency is also required at the Commissioner’s Court itself. Unlike Houston City Council or the Texas Legislature, Harris County government remains largely shrouded in secrecy. The lack of broad transparency and pro-forma meetings results in a policy process that is largely kept behind closed doors. Commissioners have wide latitude in how business is conducted within their precinct, but that should be governed by a strong ethics policy that requires lobbyists to register and places limits on campaign contributions. A strong government requires one grounded in ethics and transparency.

Access to the ballot box and the integrity of voting process remains a major concern to all voters. Harris County needs a transparent and error-free voter registration process that works to actively register voters. Texas is eliminating straight ticket voting in 2020 and Harris County needs to start preparing for the longer lines and logistical strains that surround the longest electoral ballot in the country. This means expanding the number early voting locations throughout the county, as well as extending the hours of operation. Harris County also needs to follow other Texas counties and create election day voting centers that allow voters to cast a vote at location throughout the county — not just at a precinct.

Part of the improving voting means replacing the outdated machines. The current click-wheel electronic voting system is outdated and slow in handling our long ballot. Harris County needs to invest in modern, verifiable voting machines that can provide confidence in the electoral process while allowing voters to exercise their vote quickly and efficiently. County government has historically worked to make voting more difficult and cumbersome, and these reforms would be a good first step in reversing that.

Finally, Harris County should also revisit initiatives around the expansion of early childcare. In 2013, the well-meaning pre-K training initiative “Early to Rise,” which called for a ballot initiative to expand pre-K training programs, was strongly opposed by outgoing County Judge Ed Emmett and the Republican majority of Commissioner’s Court. While that initial plan was limited in scope, the idea of a regional approach to expanding early child care is one that needs to be explored. Research indicates that investing in early education initiatives are the best way to mitigate the effects of poverty and improve long term educational outcomes. A countywide program may be the smartest long term investment that Harris County could make.

I endorse all of Jay’s idea, which he proposes as a first-100-days plan, and I’d add a few things of my own, none of which need to be done immediately. One is for Harris County to be a more active partner with Metro, and to be fully engaged in the forthcoming transit plan and referendum. There are a lot of ways the county can contribute to better transit, and with everything Metro has going on now, this is the time. Two, continue the work Ed Emmett started in consolidating services with Houston and other cities, and make non-MUD governance a part of that development reform Aiyer outlines. Three, figure out what the office of the Treasurer can and should be doing. Incoming Treasurer Dylan Osborne has his own ideas, of course, but my point is that back in the 90s Commissioners Court basically neutered the office during Don Sumners’ term. Maybe now the time has come to restore some actual power to that office. Other counties have Treasurers, perhaps we should look to them to see if there’s a good model to follow.

I’m sure there are plenty of other ideas. (The parts that I cut out for this excerpt talked about criminal justice and bail reform, some of which have been going on.) Reviving the pre-K proposal is especially something we should all get behind. The point is, there is much that can be done, and no reason to feel restrained by “we’ve always done it that way” thinking. If it’s a good idea, let’s talk about it and figure out if we can make it work. It’s a new era in Harris County.

Is this development really necessary?

Boy, the optics of this sure are lousy.

CM Brenda Stardig

The Houston City Council has indefinitely postponed a proposal to build hundreds of homes in a west Houston floodplain amid questions about whether city leaders’ actions would match their rhetoric about mitigating the risk of flooding after Hurricane Harvey.

Mayor Sylvester Turner supported the move to refer the item back to his administration, a procedure that can be used to further study a controversial item or kill it.

Arizona-based Meritage Homes announced last May that it planned to build the single-family homes on the site of the recently closed Pine Crest Golf Club at Clay and Gessner in a master-planned community to be called Spring Brook Village. The finished project would include homes for up to 800 people, with properties priced between the high $200,000s and the mid-$500,000s.

The entire 151-acre site sits in a flood plain, Harris County Flood Control District maps show. Officials said the developers’ drainage plan, once built, will place most of the tract in the 500-year floodplain rather than in the riskier 100-year floodplain.

The builders have said they plan to build the homes at a higher elevation to remove the structures from the 500-year floodplain, and have noted their plan exceeds the city’s minimum requirements for detaining storm water.

Still, Turner acknowledged the optics of approving hundreds of new homes in a floodplain two months after a historic hurricane flooded thousands of homes across the Houston area.

“We are living in the post-Harvey world, and I want people to have the confidence that we’re thoroughly vetting these projects and that we’re asking the questions,” Turner said. “When I have said previously that we can’t do things the same way and expect a different result, I want to make sure this project has been thoroughly vetted, and all the council members agreed to that.”

[…]

City Council took up the item because the developers needed its consent to create a municipal utility district to pay for roads, water, sewer and drainage infrastructure on the site.

Council members Brenda Stardig and Mike Knox said the developers told them the inability to form a MUD could result in more homes and less storm water detention being built on the site, because the builders might then be required to finance part of the infrastructure costs themselves rather than repaying those costs through future homeowners’ property taxes.

The MUD is the crux of the issue and the reason why Council is involved – as the story notes, if it were simply a matter of permitting, it would not require a vote. The reason why a MUD is needed at all is not fully explained, though this Press story does add a few details.

According to correspondence between MetroNational and Council Member Brenda Stardig, who represents the district where the golf course is located, approval of the MUD would also allow for a detention pond 16 acre feet more than what the city requires and a linear detention pond with trails for walking around — but MetroNational seemed to indicate that if the MUD isn’t approved, these bonus items won’t be possible.

Still, Matt Zeve, director of operations at the Harris County Flood Control District, said that even with the building elevations and drainage plans, there’s still a risk of “overland sheetflow flooding during extreme rain events,” which is when drainage gets overwhelmed and street flooding gets serious.

“The off-site sheetflow could still cause flooding problems, but it isn’t considered in the analyses that have been completed,” Zeve said in an email.

Maybe building the retention pond and requiring the higher elevation for the houses will be enough to mitigate the risk, I don’t know. As the Chron editorial board notes, leaving a former golf course undeveloped is itself a pretty good flood mitigation strategy. What does seem clear is that this was a business-as-usual idea – the land was bought by the developer a year ago, and the project was announced in May – but we are not and cannot be in business-as-usual mode any more. Projects like this require a much higher level of scrutiny and skepticism now. Otherwise, we really haven’t learned anything from Harvey.

City buys out some flooded homes

Expect to see more of this.

Mayor Sylvester Turner

Houston City Council on Wednesday approved funding nearly 60 home buyouts across three flood-prone neighborhoods, the first such step from City Hall in recent memory.

The city typically leaves buyouts to the Harris County Flood Control District and, in fact, the measure approved by the council would send $10.7 million to the district to pay for the purchases, estimated at about $175,000 per property.

Houston has not had any in-house staff devoted to the issue in recent memory, but Hurricane Harvey has spurred city officials to acknowledge the need to remove more flood-prone residences from harm’s way, leading to Wednesday’s vote to fund voluntary buyouts in three working-class neighborhoods. Harris County Commissioners Court approved the deal earlier this month.

Mayor Sylvester Turner said he “absolutely” expects the city to fund additional buyouts in the months to come but that the strategy must be paired with channel improvements, new reservoirs or detention basins and other flood mitigation efforts.

“There are thousands more homes that are subject to buyouts,” he said. “We need to handle it in a very strategic fashion. We need to factor in all of the strategies that will be required to make the city more resilient.”

In fact, Harris County Judge Ed Emmett on Wednesday unveiled 15 recommendations to combat flooding on a regional basis, calling for, among other things, more buyouts, cooperation across city and county lines, an expansion of county floodplains, and the immediate funding needed to complete several flood control projects along area waterways.

The dollars approved by the council Wednesday are federal funds the city received after two floods in 2015, and are earmarked for areas that suffered in those storms, Turner said. City data show each area also suffered significant damage during Harvey.

As Mayor Turner says, this is one piece of a very large puzzle. Among other things, you want to avoid creating a smattering of abandoned properties in the middle of neighborhoods. Locations for buyouts are going to have to be chosen very carefully.

As for those recommendations from Judge Emmett, here’s a summary:

  • Creating a regional flood control organization that can coordinate water management across county lines. Releases from Lake Conroe in Montgomery County have been fiercely criticized by Harris County residents.
  • Increasing regulations on development in flood prone areas, including rethinking floodplains. The county is currently conducting a reevaluation.
  • Developing an improved flood control system and localized evacuation plan that could utilize volunteer organizations to help first responders, as well as how to coordinate high-water vehicles and private boats. Residents in the areas around Addicks and Barker dams have called for a better warning system, and the U.S. Army Corps of Engineers, which operates the dams, considered such a system before dropping the idea two decades ago.
  • Installing automatic barriers at flood-prone underpasses and developing a plan for closing such underpasses. After the Tax Day floods, Emmett said he would lead such an effort.
  • Buying out all homes located in the 100-year floodplain or that have flooded repeatedly. The County has several disparate buyout efforts ongoing, but a larger scale program will probably cost billions of dollars.

The Press has the full list. I basically agree with most of it, but there are a couple of items I want to comment on:

9. Expanding the role of municipal utility districts. If your local MUD isn’t doing much about preventing flooding, Emmett thinks that needs to change, that their responsibilities should include both storm water management and flood control in cooperation with the flood control district.

15. Giving Harris County ordinance-making power. Even though if unincorporated Harris County were a city it would be the fifth-largest in the country, Harris County doesn’t have ordinance-making power. Also, Emmett said county government should receive some of the collected sales tax rather than just relying on property tax. “To continue to exclusively rely on the property tax is fundamentally unfair and unsustainable,” he said. This is much more of a long-term shift, however, Emmett said.

The governance of MUDs is definitely an issue, but I think this is the wrong approach. Especially since we need to get a handle on the kind of build-everywhere growth that MUDs promote, I say we should at the least encourage, if not outright coerce, existing and proposed MUDs to incorporate or be annexed. MUDs may have served a purpose in the past, but it’s a model we should not seek to perpetuate. It’s time for a different approach. Space City Weather has more.

MUDs and Harvey

City governments have their pros and cons, and their challenges getting things done. But at least their existence means residents of said cities have places to go when they need various services. Not everyone has that, and in times of crisis like what Harvey has wrought, that’s a big deal.

Cinco Ranch, a master-planned community 25 miles west of downtown Houston, is governed by a patchwork of municipal utility districts – MUDs for short – obscure entities that sell bonds and collect taxes to pay for water systems, sewage plants, roads and other infrastructure.

The closest thing to a mayor for Cinco Ranch is G. Timothy Lawrence, 74. He’s a semi-retired businessman and president of the board of the community’s main MUD. He and his four fellow board members set the property tax rate and hire lawyers, engineers and financial advisers. Yet he has never lived in Cinco Ranch and did not set foot there during the flooding. His home is a 20-mile drive away, in the Royal Oaks section of Houston.

Drawdy and many of his neighbors had never heard of him.

MUDs have proliferated in the Houston suburbs, helping to power the region’s runaway growth, because they offer developers an advantageous way to fund infrastructure. In unincorporated stretches of suburbia, they have evolved into permanent mini-governments largely invisible to the taxpayers they serve.

The devastation wrought by Harvey has stirred fresh questions about whether MUDs and similar special purpose districts are sufficiently transparent and accountable, and whether they’re capable of putting the public interest ahead of developers’ interests – particularly in protecting neighborhoods from flooding.

Typically, MUDs are created at the initiative of developers, who pick their initial board members, lawyers and other professional advisers. The districts sell bonds to reimburse developers for infrastructure costs. Residents pay off the debt through property taxes.

MUDs usually do not have websites, nor any physical presence in their communities. In Cinco Ranch, which is divided into 16 separate MUDs, there is no city hall and no civil servants. Water and sewage facilities are operated by contractors hired by the main MUD. That MUD’s board members usually hold their monthly meetings not in Cinco Ranch, but in the offices of the district’s law firm near downtown Houston.

“It’s the difference between paying your monthly bills to a nameless organization with an acronym and a number versus someone you know, who could be held responsible for what happens in a crisis,” said Brandon Rottinghaus, a political science professor at the University of Houston.

You know how I feel about MUDs. It should be abundantly clear that MUDs are no substitute for government, which will mean different things to different people. Is this a good deal for the people of Cinco Ranch, who are dealing with the effects of Harvey without having any of the services and information dissemination capability that people who live in Houston expect? Is it the sort of thing that would make them reconsider their situation, and maybe work towards incorporating? I suppose if there’s no urge to think about those things now, there never will be. I wish the residents of Cinco Ranch and other such developments the best in getting the assistance they need, and in assessing their options going forward.

More MUD muddles

Who needs collateral?

When Houston businessman David Lucyk decided to develop land in northeast Harris County, he lined up a bank loan to pay for water pipes, sewers, roads and a stormwater detention pond.

He offered the bank three items as collateral: land his company owned, an ownership stake in a business, and the promise of money in the future – millions of dollars in payments from a municipal utility district, or MUD, that he helped create to finance his project.

If everything had gone as planned, Harris County Municipal Utility District 402 would have sold tax-exempt bonds to reimburse Lucyk’s company for its infrastructure costs, and Lucyk would have used the money to repay the bank.

MUDs are highly popular among Texas developers, who hold enormous sway over how they’re created and benefit greatly from their ability to issue tax-exempt bonds and levy property taxes to cover infrastructure costs, as Lucyk was counting on. Those infrastructure costs are ultimately passed on to property owners within the MUD’s boundaries, whose property taxes go to repay the bonds.

Taxpayers’ advocates have questioned the transparency of some MUDs and see them as an increasingly problematic way to pay for infrastructure as local government debt increases, given their sweeping power to sell bonds and raise taxes. What happened with Lucyk and MUD 402 became a case in point when things didn’t work out as planned.

Lucyk’s firm defaulted on the bank loan and filed for bankruptcy. But because part of the collateral he offered the bank was proceeds from the MUD’s forthcoming bond sales, future taxpayers were on the hook for his company’s debts.

Hugh Coleman, a Denton County commissioner and critic of special purpose districts, said the state needs to better protect taxpayers by stopping developers from using future MUD bond proceeds as collateral for bank loans. When things go wrong, banks can sell that collateral.

“It’s like buying credit card debt, except you get to buy it for a developer-run governmental entity and the property owners are on the hook to pay the full amount of the debt,” he said.

It’s one thing for a developer to reach an agreement requiring the MUD to reimburse its infrastructure costs with bond proceeds. But by using that deal as collateral to get a bank loan, Coleman said, it often means a developer enters the project under-collateralized. A chunk of the financial risk of development is transferred from the developer to the taxpayers, he added.

[…]

It’s unclear how often future MUD payments to developers are used as collateral and then bought and sold after a bank loan default.

The Texas Commission on Environmental Quality, which along with the legislature creates MUDs at the request of developers, does not track how often those developers go bankrupt.

“TCEQ is not aware of any effects a developer’s bankruptcy has on bonds issued by a district,” said agency spokesman Brian McGovern.

I dunno, that sounds like a nice piece of data to have. I’ll say again, MUDs may have their merits, but I seriously doubt this is the system we’d willingly choose to have if we were designing everything over from scratch. For all the chest-thumping we are subject to by Republican legislators about being zealous watchdogs of taxpayer money, not to mention the fervor to meddle in local affairs, you’d think someone would file a bill to provide more oversight of MUDs. I guess the pander potential is insufficient for that.

MUDs and debt

Another story about the least-understood form of debt and taxation in Texas.

BagOfMoney

In Houston’s conservative suburbs, where local governments are loath to raise taxes, the thankless task of hiking revenues has fallen to hundreds of so-called municipal utility districts created for developers to finance water and sewage systems, roads and other amenities.

These MUDs, as they’re called, have virtually unlimited power in bright red, anti-tax Texas to sell bonds and levy property taxes.

The state’s leading tea party conservatives, Comptroller Glenn Hegar and Lt. Gov. Dan Patrick, have championed their creation in what ethics reformers say is a clear example of special interest influence in Austin.

All told, lawmakers who carry bills creating MUDs and other water districts have collected $3.5 million in campaign contributions since 2001 from law firms that specialize in creating those districts on behalf of developers or do bond work on their multimillion-dollar deals, a Houston Chronicle investigation has found. The Chronicle used a state database to pinpoint which law firms work for water districts. The data doesn’t include developers, who also contribute large sums to legislators.

Both Hegar and Patrick say MUDs and other water districts have played a critical role in developing infrastructure and creating jobs. They deny campaign contributions have anything to do with the bills they’ve carried. But both also say they are concerned about surging property tax burdens levied by school districts, towns, cities, counties – and MUDs, their less accountable, largely anonymous first cousins.

MUDs and other water districts have to date issued more than $60  billion in outstanding debt and face almost no government oversight of their spending. While most voters know the names of their mayors and city council members, many have no idea who runs their local MUD – or even what a MUD is.

James Quintero, director of the Center for Local Governance for the Texas Public Policy Foundation, a conservative think tank based in Austin, wants the legislature to protect taxpayers by preventing local officeholders from “off-loading” the delivery of public services to MUDs and other “special purpose districts” that contribute to the property tax burden and often lack transparency.

See here for past blogging on this topic, and be sure to read the whole story. Anyone who is surprised by the connection between MUD law firms and the politicians who push MUDs should probably go lie down in a quiet room for awhile. I know one should never read the comments, but I was struck by the number of commenters on that story who basically accused the Chronicle of being “anti-development” for having written this. I don’t doubt that MUDs are an effective mechanism for spurring development in currently undeveloped placed. The question I have is whether this is the best way to spur development in currently undeveloped places (*) or if perhaps a better mechanism may exist. To put it another way, if we could emulate Metro’s bus system redesign and start with a blank map of Harris County and its governmental entities and undertake the task of reimagining them all from the ground up, would we want to design something that looks like what we have now, or would we go a different direction? Call me crazy, but I think we’d gravitate towards the latter. That doesn’t mean that we can easily or pragmatically move in a different direction from where we are now, but it is worth reminding ourselves that what we have now, with its heavy reliance on this unhealthily symbiotic relationship of officeholders and niche law firms, not to mention millions of dollars in debt being ratified by elections in which literally two people vote, is not the only possible option. The Chron’s Chris Tomlinson has more.

(*) There is of course the completely separate question about whether it is a good idea to spur development in undeveloped places at all, or whether it would be better to spur it in already-developed places, with more investment in transit and other non-car modes of travel. That is a conversation that is very much worth having, but it would make Dan Patrick’s head explode, and so it is unfortunately beyond the scope of this blog post.

Stuck in the MUD

Tricky things, these municipal utility districts.

MUD 187 came to be when a Houston developer arranged for two people to move their trailer onto a 519-acre site on the edge of Richmond in Fort Bend County, which at the time was an empty field.

As the only “residents” within the municipal utility district’s boundaries, the couple headed for the polls in November 2008. The ballot asked whether the state’s approval of MUD 187 should be confirmed and whether the district should be authorized to sell up to $188 million in bonds for water and sewage systems, drainage, parks, recreational facilities, roads and a fire station.

The vote was unanimous – 2-0.

“That’s not how democracy is supposed to work,” said Clifford Gay, a retired construction superintendent who now lives in Del Webb Sweetgrass, a retirement community that owes its existence to MUD 187 – and the taxes it is levying to pay off $24 million in bonds.

Gay and his neighbors wonder how high those taxes might go as more bonds are sold, especially with extraordinary bond issuance costs of 9 percent, according to IRS documents. MUD 187’s bonds are rated Baa3 by Moody’s, which says they may have “certain speculative characteristics.”

[…]

There are 1,751 active water districts in Texas, a class of special purpose districts tracked by TCEQ, ranging from large river authorities to tiny irrigation districts, including 949 MUDs, according to the state.

The epicenter of water district financing: Houston’s suburbs.

Forty-four percent of those 1,751 districts are in Harris, Fort Bend and Montgomery counties. Sixty-five percent of the 949 MUDs are in those three counties – 389 in Harris County, 146 in Fort Bend County and 85 in Montgomery County.

MUDs are the most popular type of water district in Texas with developers, in large part because they hold enormous sway over how they’re created and because MUDs are empowered to issue tax-exempt bonds covering the developers’ infrastructure costs.

Taxpayers’ advocates increasingly view them as a problematic way to pay for infrastructure in the face of climbing local government debt, given their sweeping power to sell bonds and raise taxes.

Since 2000, 207 water districts were created in Harris, Fort Bend, and Montgomery counties, with voters approving more than $39 billion in bonds to be used for various infrastructure projects. There is more than $60 billion in outstanding debt statewide, according to the most recent financial audits that water districts are required to submit to TCEQ.

Water district debt makes up at least 15 percent of Texas’ debt. It’s also the fastest-growing debt, according to recent data from the state Comptroller’s Office.

Read the whole thing – for as dry and wonky a subject as this would seem to be, the behind-the-scenes stuff is quite intricate and rather fascinating. And that’s without taking into account the bizarre voting procedures that “govern” MUDs and related beasts like Road Improvement Districts (RUDs) and Levee Improvement Districts (LIDs). Say what you want about cities, but at least you get to vote for people who are supposed to represent you.

In past discussions of MUDs and RUDs, I’ve been asked what the alternative is, since everyone seems to agree that as things are now, there’s no way for the kind of development that needs to happen to keep up with Texas’ booming population to take place in the absence of this structure. That may be, but let me turn the question around. If we were (as a thought experiment) to do with the state of Texas and the greater Houston region what Metro did with its bus system and redesign it all from scratch, would you set things up the same way they are now, or would you try to come up with something different? I don’t know about you, but I’d lean strongly towards the latter. I freely admit, I have no idea what that might look like, though I’m sure there are actual experts out there who could offer a suggestion or two. My point is, just because this is what we have to work with, doesn’t mean it’s the best way to do it.

One more thing: Given the current Republican obsession with dictating to cities how to run their business as well as their obsession with property taxes and debt of all kinds, you’d think the plight of people like Clifford Gay might interest them a bit. I’ll leave it to you to speculate why cities must be brought to heel, but MUDs and RUDs and so forth can do pretty much what they want. The Chron editorial board has more.

More on MUDs

The Chron covers this topic.

A few months ago, a cabinet maker and his wife were recruited to move into a manufactured home parked on a dirt road that was plowed into the woods on the west side of Conroe in Montgomery County.

Daniel and Deborah Spiecher are now the only residents of a newly created municipal utility district, or MUD, carved from 82 acres of land there. They are also the only ones eligible to vote Tuesday on $500 million in proposed bonds to develop that tract.

In fact, they are among just seven voters who will decide the fate this week of $1.07 billion in bonds for roads, water, sewer and recreational facilities in three such districts that were recently formed in this fast-growing county north of Houston. The debt will be repaid with taxes imposed on future residents and businesses. While some believe the MUDs provide a means to bring about high-end development in an orderly way, critics say they are out of control, with developers manipulating the democratic process to essentially take on the roles of cities and borrow hundreds of millions of dollars to make public improvements.

Montgomery County resident Adrian Heath decries the lack of transparency and citizen input into what critics call “rent-a-voter” MUD elections. Heath notes that the billion-dollar MUD proposals make the contentious, countywide election over a $280 million road bond package look like “kid stuff.”

Yet an attorney representing one of the developers for the three MUDs refers to these initial seven voters as “urban pioneers.”

“They move onto the land and help establish new communities, paving the way for the future homeowners,” said Angela Lutz, the attorney for Stoecker Corp., which plans to develop land covered by a separate MUD on Conroe’s west side and also north of The Woodlands. She stressed these elections are completely legal, as well as being “typical and ordinary” and the way MUDs have operated for decades.

[…]

Without MUDs, much of Harris County and The Woodlands would not exist today, he said. In order for MUDs to be confirmed in an election as state law requires, developers have to move residents onto their property to vote, Melder said.

“While the method may seem unusual, it has led to hundreds of thousands of high-quality and affordable homes in the Houston area,” said Lutz, the attorney for Stoecker.

However, others, such as University of Connecticut School of Law professor Sara Bronin, question the “lack of formal democratic process” in these MUD elections, utilizing a small voter pool that is “handpicked by the developer.”

Bronin, who wrote an article for the Fordham Law Review on Texas’ MUDs, notes how MUDs were originally designed only as a vehicle for supplying water to unincorporated areas. Since then, as the number of MUDs has proliferated, their power also has grown, she said.

“The lines are so blurred that you can’t tell much difference between a MUD and what a city can do,” she said.

See here for recent coverage from Your Houston News. The defenders of these MUDs (and their cousin, road utility districts or RUDs) make some good points, but the whole thing feels like magic to me – just put a few people in trailers on some undeveloped rural land, and voila! instant access to hundreds of millions of dollars in credit for your construction dreams – not to mention completely non-transparent. I mean, school bond issues have their share of problems, but at the end of the day every penny gets accounted for. Does anyone believe there isn’t a little grease built in to this process? Good luck finding it. I’d also guess that the sudden appearance of these subdivisions in what used to be pastures and piney woods contributes more than a little to Montgomery County’s inability to keep up with its own infrastructure needs, but that’s their problem. I get that this is legal, but it doesn’t mean it’s a good idea, and it doesn’t mean that the original intent of these districts hasn’t been swept aside. Chalk this up as another reason why I prefer city living. We may have our own problems, but I at least have some say in how things are done.

When low turnout is the goal

You really have to admire the sheer brazenness of this.

Montgomery County Municipal Utility District No. 142 is yet another special-purpose district this election cycle using what appears to be a service that hires voters to pass MUD elections in areas without existing voters.

MUD No. 142 will be the site of The Woods of Conroe, a 92-acre subdivision west of Conroe that will include about 400 residential lots, according to previous Courier articles.

According to voter registration records, two voters list their residence at 5283 Old Highway 105 W. in Conroe, which happens to also be the site of early voting for MUD 142. The MUD 142 election is being held separate from the Montgomery County joint elections and therefore is not on the sample ballot provided by Montgomery County Elections Central.

The two voters in MUD 142 also happen to list their mailing addresses at 20615 Marilyn Lane in Spring, which is the home site of Stingray Services. According to the Stingray Services website, the company specializes in providing turn-key voter trailer installation services, and election services,” their website “About Us” says. “We have completed over 70 trailer installations in Texas over the last 10 years, and have supported nearly 100 elections. We locate residents, perform landlord services, support residents in changing their license and voter registration, and assist with the district election. We have worked with a host of major developers and engineers including Lennar, Toll Brothers, Friendswood, Land Tejas, Taylor Morrison, Pate Engineers, Brown & Gay … to name just a few.”

Emphasis mine. Read the whole thing, and see here for more on one of the other MUDs mentioned in the story. I know that all the “concern” about “voter fraud” and “election integrity” in the Legislature is so much partisan grandstanding and security theater, but you’d still think that something as egregious as this might attract a little bit of attention. Instead, the only people to get in trouble are the ones who tried to expose the sham. But hey, at least these MUD voters have to show photo ID when they vote, right? KTRK has more.

The games our tax system plays

I find this just fascinating.

BagOfMoney

It’s been described as bribery, taxation without representation and a shady political maneuver. Others have called it an innovative way to deal with budgetary problems and get things done.

Ever since Texas lawmakers made it more difficult for cities to absorb suburbs into their boundaries 15 years ago, Houston has been quietly cutting deals with municipal utility districts to levy a 1 percent sales tax on purchases in neighboring communities.

The agreements for “limited purpose annexations” now generate tens of millions for Houston and for the utility districts, which split the revenue. But some question the appropriateness of the deals.

Houston seems to play off suburban fears of annexation to demand taxes in exchange for promises to leave them alone, said Paul Lewis, a professor of local politics and urban development at Arizona State University.

“It’s a kind of bribery,” he added.

Some local officials wonder whether the agreements lead to wasteful spending that lacks transparency. The revenue is not subject to the voter-approved revenue cap that has forced the city to lower its property tax rate and slash budgets. Critics also note that Houston provides no services to most of these suburban areas, whose residents can’t vote in city elections.

“It’s unconstitutional,” Fort Bend County Judge Bob Hebert said. “I thought we fought a war back in the 1700s on ‘taxation without representation.’ ”

Utility district leaders defend the agreements, noting that they take half the money collected and receive a contractual promise they will not be fully annexed for 30 years.

City officials agree that the agreements are fair. Census figures show that nearly two-thirds of those who work in Houston live outside of the city limits. City officials note that suburban residents attend plays in the Theater District, watch free concerts at Memorial Hermann Park and put wear and tear on city property.

“It is the primary tool we have to deal with the growth that goes on outside the city and the burden put on infrastructure by suburban citizens without our property tax,” Houston Finance Director Kelly Dowe said.

You can read the story and decide its morality and/or constitutionality for yourself. Personally, as a resident of Houston, I have no problems with it. What occurs to me in reading this is that it’s a natural outcome of our overall system of taxation in Texas, which is heavily dependent on sales and property taxes, and also on legal ways to minimize one’s sales and property taxes. There’s one way we could avoid all the problems associated with a tax system designed around political boundaries, and that’s to switch to one that is primarily dependent on income taxes instead. Of course, there are plenty of ways to game an income tax system, too, so it would most likely substitute one set of shenanigans for another. But at least it would be something different for us to argue about.