As many residents may already know, the Board of Directors (the "Board") of Galveston County Municipal Utility District No. 66 (the "District" or “GCMUD 66”) has called an election for Saturday, May 3, 2025 (the “Election”), regarding two (2) bond authorization propositions: (a) one for the issuance of bonds to finance water, sanitary sewer, storm sewer and drainage (“WS&D”) facilities to serve land within the District; and (b) one for the issuance of bonds to finance park and recreational facilities within the District.. These answers to common questions were prepared to provide residents and other constituents of the District with information regarding the proposed bond authorization. This page will be updated to address additional questions and provide additional information prior to the Election.
What is Galveston County Municipal Utility District No. 66?
Galveston County Municipal Utility District No. 66 is a municipal utility district and political subdivision of the State of Texas. It is authorized to purchase and construct water, sanitary sewer, storm sewer, drainage, park and recreational facilities to serve the land contained within its boundaries. The District currently contains approximately 527 single-family residences across 378 acres in the Pearlbrook, Sunrise Cove, and Vida Costera subdivisions. The District also serves the Costa Mariposa multi-family project and the Mainland Medical commercial development.
What is included in the Election?
On May 3, 2025, residents of the District will be asked to vote FOR or AGAINST the following propositions:
PROPOSITION A – THE ISSUANCE OF BONDS IN THE AMOUNT OF $30,000,000 FOR WATER, SANITARY SEWER, DRAINAGE AND STORM SEWER SYSTEMS AND THE LEVY OF TAXES IN PAYMENT OF THE BONDS
PROPOSITION B- THE ISSUANCE OF BONDS IN THE AMOUNT OF $10,000,000 BONDS FOR PARK AND RECREATIONAL FACILITIES AND THE LEVY OF TAXES IN PAYMENT OF THE BONDS
Residents also will be able to vote for or against these propositions by mail prior to May 3, 2025. The Election will be conducted by the Galveston County Clerk’s Office, Records and Elections Center. Information regarding voting procedures can be found at galvestonvotes.org.
What is a bond authorization?
A bond authorization allows the District 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.” While an authorization may be for a large amount, the District may only sell bonds after the Texas Commission on Environmental Quality approves the proposed projects and the Texas Attorney General determines that the bonds comply with all state laws and regulations.
What will the WS&D bond authorization be used for?
The Bond Election Report submitted by the District engineer generally identifies the projects the Board anticipates will be necessary over the next ten (10) years to construct or upgrade the WS&D facilities, which will be owned and operated by the City of Texas City, as well as parks and recreational facilities. The Bond Election Report outlines the estimated cost for these projects (and required bond issuance costs), considering all information available today.
What will the Park/Recreational Facility bond authorization be used for?
The park bond authorization can only be used for the acquisition, design, and construction of recreational facilities, which generally include greenbelts, open spaces, and native habitats; certain sidewalks, trails, paths; certain pedestrian bridges; parks, amenity lakes and associated water features (subject to certain restrictions); landscaping and parking related to the above items; and certain fencing.
Why is it necessary to do these projects?
The District was created in 2006 and initially contained approximately 310 acres. Since its creation, approximately 68 acres has been added to the District. As the District has grown, the infrastructure has been expanded to meet the needs of the 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. This could result in increases in the District’s maintenance tax rate in order to collect the funds required to construct the needed WS&D facilities and construct, operate and maintain park and recreational facilities. Further, the law requires the District to have the necessary funds in hand before it can proceed with a qualified 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 roof replacement, when the District issues bonds, it spreads the costs of the necessary projects over several years with the goal of avoiding increases to the tax rate typically required by a "pay as you go" approach. Moreover, the interest rates for the District on the re-payments of its municipal bonds generally are lower than the comparable interest rates for traditional construction loans. Financing infrastructure through the issuance of bonds enables the District to complete projects timely and quickly should the need arise.
How is the District tax rate 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 principal and interest payments on the District’s outstanding bonds; and
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 to pay operating expenses of the District.
These two components of the tax rate have decreased over the years.
How does the District manage taxpayer dollars?
The Board has been able to lower the District's total tax rate since 2019 at a rate from $0.9806/per $100 of assessed valuation to $0.900/per $100 of assessed valuation. For more details regarding tax rates, click https://gcmud66.com/tax-information/. As a result of prudent financial management, the District has earned an “Baa3” rating from Moody’s Investors Services LLC.
At this time, based on all the information available and reflected in the Bond Election Report, the Board of Directors for the District does not anticipate an increase to the total District tax rate as a result of the issuance of the bonds set out in the election propositions.
I have more questions…
Good! The goal is for the residents to have all the information at their disposal as the Election approaches. Additional questions can be fielded through the Contact Us form on the District’s website.