The MUD just found a $5M credit card under the couch. It's burning a hole in their pocket.
MUDs were authorized by the TX legislature to service the infrastructure debt associated with rapid growth, so that cities could manage their own debt wisely. Our MUD retired all its debt years ago, but now the MUD board has applied to the state for a new bond authorization of $5,000,000. That's more than two years' worth of annual tax collections.
They want to spend it.
But doesn't it cost money to have nice things?
This MUD's track record on buying nice things is terrible.
In 2023, the board built a beautiful playground that no children ever got to use because it didn't meet safety standards.
It's worse. The chickens are coming home to roost
The MUD board made a catastrophic decision to pursue litigation against their own constituents. They have spent about $300k on claims which were dismissed before trial for being a flagrant violation of the defendants' Constitutional rights. Some claims remain for trial, which would cost a great deal extra. Have you ever met a lawyer who encouraged litigation without specific goals? The board's stated objectives for commencing the suit will not be advanced by any of the remaining claims. It's all personal now, but with your money.
The Board wants to give you some catnip so you won't notice
You pay your monthly utility bills to the MUD, but the cost of providing the services is a wash. Property taxes are the only source of money that the board can spend freely. The lawsuit has already cost more than 10% of the MUD's annual tax revenue. It will lead to a fiscal shortfall unless other spending is cut, such as planned capital improvements and maintenance. The board says we need to go into debt so that the annual revenue can be used for nice things for the community and more lawsuits. But don't be fooled. Using our money wisely, the board could build nice things without going into debt. It's the lawsuits they can't afford without pursuing the bonds. Bond debt translates to increased property taxes.
Let the board make its own bed
We can have nice things as a community, but within our means. Bonds are needed for projects that generate real economic growth to pay for themselves. Our MUD is fully developed. The proposed improvements are incremental and won't substantially increase property values. We will be giving the MUD board a blank check that taxpayers are on the hook for. Would you cosign a loan with some random person who is sure they'll win big with one more chance at the slot machine? That's our MUD board right now.