As many residents may already know, the Board of Directors (the "Board") of Harris County Municipal Utility District No. 167 (the "District" or “HCMUD 167”) has called for a bond authorization proposition to be on the election ballot for Saturday, May 3, 2025. To ensure that residents and other constituents of the District have accurate information regarding the proposed authorization and the Board’s goals for the District, we have put together answers for common questions. This page will be updated to address additional questions and provide additional information prior to the election.
What is the District?
The District is responsible for providing water, sanitary sewer, drainage and storm sewer facilities to an estimated 15,000 residents across 1,278 acres including Plantation Lakes, Villages of Bear Creek, Ricewood Village, Creekside, Cypress Place, Bear Creek Glen, Westfield Ranch, Brenwood, Meadow Wood, and Haven at Kieth Harrow.
HCMUD 167 currently operates and maintains two (2) water plants with three (3) onsite water wells, five (5) sanitary sewer lift stations, one (1) waste water treatment plant and one (1) elevated storage tank. This infrastructure is connected by three (3) miles of water lines, and three (3) miles of sanitary sewer lines. Additionally, HC MUD 167 has three (3) detention basins serving ten (10) subdivisions.
What is the election?
The language below will be on the ballot for residents of the District when they go to the polls or vote by mail for the May 3, 2025 election, asking voters to select one (1) option of either FOR or AGAINST on the following proposition:
PROPOSITION A – THE ISSUANCE OF UP TO $120,000,000 IN TOTAL PRINCIPAL AMOUNT OF BONDS FOR WATERWORKS SYSTEMS, SANITARY SEWER SYSTEMS, STORM WATER SEWER SYSTEM, AND SOLID WASTE DISPOSAL SYSTEM, AS WELL AS ALL EXPENSES IN ANY MANNER INCIDENTAL THERETO, AND THE LEVY OF TAXES, WITHOUT LIMIT AS TO RATE OR AMOUNT, SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS
This proposition is related to the bond authorization amounts the District is seeking to complete water, sanitary sewer, drainage, and storm sewer facilities (Proposition A) projects in the District.
What is a bond authorization?
A bond authorization is an authorization to sell bonds to fund district projects. It is similar to a line of credit that a business might use to fund its operations. An 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 an 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 $2,135,000 in bonding authority. The most recent bond authorization was in 2004, and the amount of bonds authorized by the District's voters in the 2004 election totaled $88,210,000 for the purpose of water, sanitary sewer, and drainage facilities. The authorized bond amounts were issued periodically, as needed, to fund necessary projects for the water, sanitary sewer and drainage infrastructure in the District.
What will bond authorization be used for?
The Bond Election Report submitted by the District engineer identifies the projects the Board anticipates will be necessary over the next 20 years to expand, maintain, replace, or upgrade the aging water, sanitary sewer and drainage infrastructure owned and operated by the District. As a proactive measure, the Bond Election Report outlines the potential cost for those projects (and required bond issuance costs), considering all information available today.
Why is it necessary to do these projects?
The District was created in 1978 and was initially 633 acres. Between 1978 and 2020, the district has continued to grow to what is now 1,278 acres. As the District has grown, the infrastructure has been expanded to meet the needs of the residents. Also, as such 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.
The District intends to issue bonds only as necessary over the next 20 years pursuant to the Bond Election Report in order to proactively maintain, and, if 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 water, wastewater and drainage and detention infrastructure.
Municipal Utility Districts were originally created with the expectation they would eventually be annexed by a neighboring city, after which the city would pay for the costs of operating, maintaining, and repairing all District utility facilities. Under current circumstances, annexation of the District by the City of Houston in the near future appears unlikely, so the District must prepare to fund all necessary costs of maintenance for the water, sanitary sewer, and drainage facilities required to serve its residents.
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. Further, the law requires the District to have the necessary funds in hand before it can proceed with a required project. 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 the increases 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 re-payments 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 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:
1. The debt service tax rate, the proceeds of which can only be used to make payments on the District’s outstanding bonds.
2. The operations and maintenance tax rate (often referred to as O&M), 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?
The Board has been able to lower the District's total tax rate since 2017 at a rate from $1.25/ $100 to $0.84/ $100. For more details regarding tax rates, click here. As a result of prudent financial management, the District has earned an “A3” rating from Moody’s Financial Services LLC.
Through careful supervision of expenses and planning for maintenance, the District currently has approximately eleven (11) months of operating reserve funding. A common benchmark for Municipal Utility Districts is generally 12 months. Reserve funds earn interest and are available for emergencies, but can prove to be insufficient if large-scale rehabilitation, repair, or replacement is required, as in the case of plant facility failure or compromise.
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.