Title
Consider and take action on an ordinance authorizing a Utility Agreement with Baybrook Municipal Utility District No. 1 and BC-SB Baybrook JV, LLC, consenting to the annexation of approximately 450 acres known as the Midline Tract into Baybrook MUD 1, and authorizing the City Manager to execute the Agreement (Executive Director of Development Services)
Background:
Approval of this ordinance will authorize a utility agreement with BC-5B Baybrook JV, LLC. (Developer) on behalf of Baybrook Municipal Utility District No. 1 (BMUD 1) to allow for the annexation of approximately 450 acres within League City into the existing BMUD 1. A municipal utility district (MUD) is a political subdivision of the State of Texas authorized by the Texas Commission on Environmental Quality (TCEQ) to provide water, sewage, drainage, roadways and other utility-related services within the MUD boundary. The purpose of the MUD is to provide a developer with an alternative way to finance the infrastructure within the MUD. A MUD sells bonds to generate income so that the MUD can reimburse a developer for authorized improvements. A MUD then repays its bond debt by assessing taxes on the property owners within the MUD.
BMUD 1 was created in 1984 and is petitioning to annex approximately 450 acres of land, commonly referred to as the “Midline Tract”.
Included in the ordinance is the consent to the annexation of the Midline Tract into BMUD1. BMUD 1 will be used for the purpose of furnishing water, sanitary sewer, drainage, park and recreational, and road facilities and services to the area within its boundaries. The portion of the District within League City will be 450 acres of undeveloped property. The area is to be developed to include residential and commercial developments as well as an area dedicated to the City for a community park (15 acres in size) and an ~ 4-acre site for a future Fire Station. This MUD within League City is located generally between the City of Friendswood to the west, FM 528 to the north, Old NASA Road and existing developments to the east, and Grissom Road to the south.
The Utility Agreement proposed for this annexation has the following requirements:
- Sections 6.07 provides a tax rate cap and revenue controls by the District agreeing that it shall not adopt a total ad valorem tax rate in excess of $1.00/$100 of assessed valuation without first obtaining written approval from the City.
- If the District exceeds the $1.00 tax rate cap, then any ad valorem tax revenues generated by the District in excess of the $1 shall be deposited into the District’s debt service fund and solely used to reduce outstanding bonded indebtedness and shall not be used for O&M or any other purpose.
- Section 6.08 outlines Homestead & Senior/Disabled Exemptions.
- City control of Bond Issuance by requiring city approval prior to sale of bonds, establishing strict debt to valuation ratios and requiring final maturity of all bonds to be capped at December 31, 2060.
- Developer contributes a Fire Station site (up to 4.5 acres) and a 15-acre City Park site that will be deeded to the City.
- Execution of the Utility Agreement is contingent upon the City of Houston, the City of League City, and Baybrook Municipal Utility District No. 1 entering into a separate “Tri Party Agreement” that establishes conditions for annexation of the Midline Tract, bond issuance, tax limitations, and allocation of utility service responsibilities.
Staff recommends approval of this agreement.
Attachments:
1. Proposed Ordinance
2. Exhibit A - BMUD 1 Utility Agreement
3. Exhibit B - Description of Annexed Area (450 acres)
3. Aerial Map
FUNDING
{X} NOT APPLICABLE
STRATEGIC PLANNING
{ X } Addresses Strategic Planning Critical Success Factor #1 – Develop & Maintain our Infrastructure