In the last five years, seven special districts have been approved in the Georgetown area, Assistant City Manager Nick Woolery said. At a special-called April 1 City Council meeting, elected officials and city staff discussed several potential special districts in various stages in or around the city, including public improvement districts, or PIDs.
An extraterritorial jurisdiction is an unincorporated area located outside a city’s boundaries. Municipal utility districts are a type of special district used within or outside of an ETJ to create developments and provide utilities for residents in the area.
“Pretty much every larger master-planned development is using MUDs,” Georgetown Mayor Josh Schroeder said.
Terms to know
MUDs are special-purpose districts created by the state and used by developers to fund the upfront costs of building new communities in unincorporated areas—land outside city limits not governed by a municipal government—such as infrastructure for water, sewer, drainage and roads, according to the Texas Municipal League.
Unlike city residents, MUD residents typically do not receive municipal trash pickup or police services, and instead rely on county resources or private services.
Developers use other forms of special districts like PIDs, which can finance more than a MUD can and imposes an assessment instead of a tax, Woolery said. PIDs are typically created, governed and operated by the city, Schroeder said.
MUDs can be created through the Texas Commission on Environmental Quality, the state Legislature and a consent agreement with the city if they’re in the ETJ, Schroeder said.
Since 2023, Senate Bill 2038 has allowed landowners to leave—or deannex—from a city’s ETJ through petition or election, making way for the creation of more MUDs.
Diving in deeper
MUDs are governed by locally elected boards, often chosen in low-turnout elections where only a few residents qualify to vote because the land is typically undeveloped at the time, according to previous Community Impact reporting.
There are 83 active MUDs in Williamson County, according to the TCEQ. Since 2020, 21 new MUDs have set tax rates, according to county officials.
Residents in MUDs often face higher tax rates than those within city limits. Schroeder said a homeowner’s monthly payment can be hundreds of dollars more if they have a MUD tax.
Laurie Dunn lives in MUD 31 and said she’s willing to pay higher taxes, as the board of her MUD has been responsive to community requests and transparency improvements.
“Smaller government programs like this that keep more decisions in the hands of the communities that they’re in is valuable,” Dunn said.
MUD bonds can be used to fund:
- Water, sewer and drainage infrastructure
- Parks, trails and other recreational amenities
- Road projects
- Waste services
- Money voted on in past bonds that can be sold
- The number of bonds to be funded to date
- The tax rate
- The purpose of the district
Why it matters
Development company Columnar Investments is seeking PID approval from the city for Heirloom Georgetown, a roughly 620-acre community. While the property is currently in the ETJ, it would be annexed into city limits to become a PID, according to previous Community Impact reporting.
One reason Columnar is making an investment in Georgetown is due to the city’s wherewithal to get water and build treatment plants, said Logan Kimble, vice president of Texas land operations at Columnar Investments.
“Water is getting more scarce,” Kimble said. “It’s hard in Central Texas to get water if you aren’t getting it from a municipality.”
Potential developments drive the city’s discussion on how big future treatment plants should be, Georgetown Communications Manager Keith Hutchinson said. Additionally, if properties request to come back into city limits, officials want the ability to offer them services, Woolery said.
“The challenge with that is the wastewater treatment plants now are so expensive,” Woolery said. “If we build it too big, now all of our existing ratepayers here in the city are paying for something that’s not being used.”
If city officials don’t approve a district’s proposal, Kimble said that’s when developers start considering deannexation.
“Unfortunately, the only hammer that we have in those negotiations ... is to deannex from the ETJ,” Kimble said. “We don’t have a negotiation tool, because time kills all deals.”
Major takeaways
On April 8, City Council expressed concerns with wastewater plans for an Atkinson Ranch MUD proposal in north Georgetown. Although the developer, PulteGroup, has since removed their application with the city, Woolery said a future development at the 362-acre site is possible.
“That doesn’t mean that a different developer won’t walk back in six months from now to try and develop that property,” Woolery said.
Changes to state law bring uncertainty and complications to the process, Woolery said. To Schroeder, the pressure to accelerate housing development in Central Texas has caused the state and developers to remove guardrails in the process.
“I’m just convinced that we are setting off a bunch of long-term problems to solve this immediate ‘crisis’ without thinking about the long-term impacts of the decisions we’re making,” Schroeder said.
Chloe Young contributed to this article.
