Master District Contract
Harris County Municipal Utility District Nos. 500 (Harris County MUD 500), for land within its internal boundaries, 501, 502, and 503 collectively comprise the approximately 2,112 acres referred to as the Master District Service Area. Each of these municipal utility districts has executed a contract with Harris County MUD 500, in its role as the Master District, as participants (the Master District Contract) and each has obtained the approval of the Master District Contract from its voters at an election held within its boundaries.
Harris County MUD 500, in its capacity as the Master District, is the provider of regional water, sanitary sewer, storm sewer, park, road and other facilities necessary to serve the Master District Service Area and has contracted with each of the four municipal utility districts, including Harris County MUD 500, to construct and provide service from these regional facilities. The Master District Contract provides that all four municipal utility districts pay a pro rata share of the debt service on the Master District’s Contract Revenue Bonds, based upon each district’s pro rata share of assessed value for tax purposes, calculated annually. The four municipal utility districts, including Harris County MUD 500 in its capacity as a provider of internal services to residents and customers within its boundaries) are responsible for providing the internal water distribution, wastewater collection and storm drainage utilities within their boundaries. Click here for more information regarding Harris County MUD 500’s role as a provider of internal services to property located within its boundaries.
Master District Debt
The Master District Contract authorizes Harris County MUD 500, in its role as the Master District, to issue contract revenue bonds to pay for the regional water, sanitary sewer, storm sewer, park, road, and other facilities necessary to serve the Master District Service Area. Contract revenue bonds are bonds secured by an unconditional obligation of Harris County Municipal Utility District Nos. 500, 501, 502, and 503 to pay for the debt service on the bonds through the district’s levy of an annual ad valorem contract tax, from the district’s water/sewer revenue, or from any other available funds of the district that lawfully may by used for that purpose. The Master District has issued contract revenue bonds for water, sewer, and drainage facilities, and roads, and anticipates continuing to issue water, sewer, and drainage; road; and potentially park contract revenue bonds to pay for the regional facilities that already have been constructed or are planned to be constructed in the future.
Harris County MUD 500, in its role as the Master District, does not levy any taxes on the municipal utility districts located within the Master District Service Area. Instead, under the Master District Contract, each municipal utility district within the Master District Service Area (namely, Harris County Municipal Utility District Nos. 500, 501, 502, and 503) is responsible for paying to the Master District its share of the debt service on the bonds issued by the Master District to pay for the regional water, sewer, storm sewer, park, road, and other facilities necessary to serve the Master District Service Area. The amount each district must pay to the Master District is calculated annually based upon that district’s pro rata share of the certified appraised value, as provided by the Harris County Appraisal District. Each district within the Master District Service area generally levies a contract tax to fund its pro rata share of the Master District’s debt service on the contract revenue bonds issued for the regional facilities.
Master District Maintenance and Operations Costs
Under the Master District Contract, Harris County Municipal Utility District Nos. 500, 501, 502, and 503 are responsible for paying to the Master District their respective shares of the operation and maintenance costs of the regional water, sewer, storm sewer, park, road, and other facilities constructed by the Master District. The expected amount of the maintenance and operations expenses of the regional facilities and the cost of water is calculated annually by the Master District in connection with the adoption of the Master District budget. It is paid by Harris County Municipal Utility District Nos. 500, 501, 502, and 503 to the Master District on a monthly basis, and it is based on the number of equivalent single-family connections reserved to each district.