Bond Election FAQ / Montgomery County MUD 94

What is the District?

Montgomery County Municipal Utility District No. 94 is a local governmental entity created in 2002 that owns, maintains, and operates the water and sewer infrastructure that serves the Spring Trails community. It is governed by a five-member Board of Directors, all of whom live in Spring Trails and are elected by the residents.

In its early years, the District sold bonds to pay for the water, wastewater, and drainage systems that serve Spring Trails.

Today, the District continues to:

Own, operate, and maintain its water plant and distribution system, sanitary sewer collection system, and storm sewer and drainage facilities;
Pay its share of the two regional wastewater treatment plants, including expansions and repairs;
Finance parks and recreational facilities, trash collection, streetlights, and security services (including dedicated Montgomery County constables);
Collect property taxes to pay bond debt and cover day-to-day operations, and send bills for monthly water and wastewater service; and
Manage the District’s operating, debt service, and capital project funds.

What is the election?

Voters in MCMUD 94 will be asked to vote FOR or AGAINST a proposition that would authorize the District to issue bonds for major water, sewer, and drainage projects. If approved, the District could issue bonds in the future, as needed, up to a maximum total of $50 million.

Approving the authorization does not mean bonds will be issued right away, and it does not require the District to use the full $50 million. However, the necessary capital improvements in Spring Trails will happen regardless of the authorization; the only thing that will change is how they are paid for.

What is a bond authorization?

A bond authorization is permission from voters for the District to issue bonds to pay for infrastructure projects. Think of it like a line of credit: voters set a maximum amount, but the District only borrows what it needs when projects are required over the next 15 to 20 years. Before any bonds can be sold, the District must follow rules set by the Texas Commission on Environmental Quality (TCEQ) and show that the bonds can be paid back without exceeding a set tax-rate limit, using careful estimates of property values and growth.

Bonds are issued only when specific projects are necessary. Each series of bonds is paid back over a number of years at a fixed interest rate through the portion of the District’s property tax that is set aside for debt. The bonds are like a mortgage that allows the District to finance large projects and pay them down over an extended period of time. Bonds issued by a Municipal Utility District require voter approval through a bond authorization election and require agency oversight to be approved by TCEQ, the Texas Attorney General, and the District’s elected board members

This is the language that will appear on the ballot:

PROPOSITION A

THIS IS A TAX INCREASE. The issuance of up to $50,000,000 in total principal amount of bonds for water, sanitary sewer, and drainage and storm sewer facilities and the imposition of taxes, without limit as to rate or amount, sufficient to pay the principal of and interest on the bonds

Why does the bond proposition say “THIS IS A TAX INCREASE”?

Texas law (Texas Election Code Section 52.072(e)) requires this wording on certain bond propositions that involve property taxes. If voters approve the bonds and the District later issues them, the debt is paid back through the District’s property tax. Whether the tax rate actually increases in any given year depends on how many bonds are issued, when they are issued, interest rates at the time, property values, and several other factors.

Why $50,000,000?

Much of the District’s infrastructure was built more than 20 years ago when the community was first developed and is reaching an age when repairs become more frequent and costly. Some facilities must be entirely replaced. When the District was created, voters authorized $55,000,000 in bonds for water, sanitary sewer, and drainage facilities. That original authorization is now nearly used up. The Board is asking for new authority, so the District can continue to pay for needed infrastructure work over the next 15-20 years. If approved, the $50,000,000 authorization may be used over time, as needed, to:

Maintain, repair, and upgrade the District’s water plant, wells, pumps, generators, and water lines;
Pay the District’s share of improvements at the two regional wastewater treatment plants, including rehabilitation or expansion and new dewatering facilities at the MUD 119 wastewater treatment plant, and significant rehabilitation of the WCID 92 wastewater treatment plant;
Inspect and maintain sanitary sewer lines, lift stations, and related equipment;
Inspect and maintain storm sewers and drainage facilities; and
Implement surface water conversion for Spring Trails to ensure additional sources of water in the future.

Can the District pay for projects without issuing bonds?

Yes. The District can pay for projects as they come up through increased water and sewer rates, or it could use other financing options allowed under state law (such as revenue bonds). Voter-approved municipal bonds, if authorized, would let the District borrow money and pay it back over time through the portion of the property tax that is set aside for debt. Without access to municipal bonds, the District would need to collect the full cost of each project prior to implementation through property taxes or water rates before work can even begin. Each approach has different timing and cash-flow effects. Revenue bonds, if used, are typically paid back from higher water and sewer bills that are front-loaded prior to the project beginning and often carry higher interest rates than municipal bonds. Municipal bonds are efficient, less costly, and don’t require increased water and sewer rates to fund projects.

How are my taxes determined?

The District’s annual property tax rate has two parts:

Debt Service tax – used only to pay principal and interest on outstanding District bonds.
Operations and Maintenance tax – used to pay the day-to-day costs of running the District.

Both parts are reviewed each year with the District’s financial and tax advisors. The total tax rate can change from year to year depending on the District’s obligations, property values, and other factors.

How does the District manage taxpayer dollars?

The District uses long-term capital planning, annual budgets, independent financial audits, and compliance with state law and bond requirements to properly manage its finances. Money is set aside to make debt payments on time, keep adequate operating reserves, and support long-term financial stability. Budgets, tax rates, and audits are available at public Board meetings and on the District’s website.

How can residents participate and learn more?

All Board meetings are open to the public and include time for public comment. The Board of Directors meets on the first Tuesday of each month at 12:00 p.m. Residents are encouraged to visit www.mcmud94.com, attend meetings, and submit questions through the District’s website. Official election materials, the engineer’s report, and the Notice of Election will also be available through the District and Montgomery County election resources.

This document is provided for informational purposes only and is not intended to advocate for or against the proposition.