When Chambers County Municipal Utility District No. 1 was developed, the agreement was for the City of Baytown to annex the area in 2021.
That agreement was made before the Kilgore Parkway and its associated developments and, more importantly, Senate Bill 5, which does not allow for the involuntary annexation of property. That leaves the district’s future in limbo as far as annexation.
The future of MUD No. 1 was discussed during a recent city planning session. The MUD provides an interesting situation for the city because it is mixed residential and retail.
The city has been running a financial analysis on the MUD and while there is revenue to be had, it would not be a large windfall. The MUD includes Chambers Town Center.
“The process to annex would be tricky,” Assistant City Manager Nick Woolery said.
“Two legislative sessions ago, the state basically eliminated the city’s ability to involuntarily annex. I don’t know if we are still going to be able to go out and annex them.”
The purpose of a MUD is to provide a developer an alternate way to finance infrastructure such as water, sewer, drainage and road facilities. A board of property owners manages it.
Annexation could move forward with 51 percent of the residents petitioning the city. The city has never had a MUD outside of the city annexed into city limits.
Another issue is that even if residents wanted to be annexed, they would have to be willing to sell their existing debt on the MUD. It was suggested by staff the MUD board may be unwilling to do so the way it is set up.
Mayor Brandon Capetillo said there are other issues to look into. There is the condition of the water and sewer lines and other potential problems. The mayor compared it to the annexation of Pinehurst.
“When it came in, you had inherent issues,” Capetillo said.
Woolery said the MUD board is appointed by the state legislature and the city would need to know if it would be interested in selling its debt before moving forward. According to an audit performed in 2018, the district listed remaining debt of over $12 million. Preliminary options included dropping property tax from $.81 to $.80 and getting a better interest rate on the debt.