Harris County MUD 459

Submitted by Thomas Parent on Sun, 05/28/2017 - 15:24

* Buyer Beware *  

Harris County MUD 459 was setup to serve the Hunters Creek subdivision in Baytown, currently being built by Chesmar Homes. It has since been expanded to finance Goose Creek Reserve, halfway across town, being built by DR Horton. The tax rate for the district ranks among the highest in Harris County (and surrounding counties) and prices are on par with other in-city developments that do not have a MUD tax. Sales personnel will deflect questions about the MUD, tax rate, and home price. 

Primary concerns 

  • In-City MUD - City provides the services that MUD is intended to provide, developer says it lowers upfront cost for buyer but houses are priced based on what the market will bear and market doesn't appear to differentiate between MUD and no-MUD
  • Total property tax rate - $3.93
    • 25% higher than Baytown average
    • 20% higher than next closest property tax rate (besides new development Goose Creek Landing which has the same tax rate and concerns being an in-city MUD)
    • Top 0.05% of all properties in Harris County
  • High operational overhead - $85-140k / year versus $250k in tax revenue
    • Legal fees - $50-100k / year
    • Bookkeeping - $12-20k / year
    • Audit - $8k / year
    • Financial advisor - $15k / year
  • Will cost $3.75 in taxpayer money for every $1 in construction costs
  • No strategy in place by city for end life of MUDs
  • Directors do not live in the district, approve maximum reimbursements and exceptions for developer

 

Board composition 

Directors that live in the district - 0 (all 5 directors live out of district, have been granted "Director's Lots" by developer to qualify to serve on board)

Board agenda posting location 

Hunters Creek - box near entrance of splash pad
Goose Creek Reserve - proposed to be posted at community information board by pool

History of HC MUD 459 

Dan Moody and Charles Simmons sell 71.570 acres of land to Moody Simmons Baytown, Ltd - 05/13/2004
City of Baytown annexes the 71.570 acres into city limits - 08/26/2004
Additional 66.862 acres of land purchased by Moody Simmons Baytown - 10/01/2004 and 10/13/2004
City of Baytown annexes the 66.862 acres into city limits - 01/31/2005
City of Baytown adopts ordinance 10,003 to establish rules for operation of in-city MUD - 02/10/2005
City of Baytown and Moody Simmons Baytown (on behalf of HC MUD 459) enter into allocation agreement for city services - 03/18/2005
City of Baytown consents to the creation of HC MUD 459 - 03/24/2005
Petition by Moody Simmons Baytown, Ltd and Moody Simmons Baytown II, LTD for creation of district - 08/27/2005
TCEQ approves creation of HC MUD 459 - 01/17/2006
Election held to confirm creation, bond amount, and directors (2 voters) - 05/17/2006
Moody Simmons Baytown sells land to Affinity Development - 01/18/2007

Bonds issued 

Costs are based on bond applications, values will vary slightly versus actual amounts.

  • 2013 
    • Bond amount - $1,750,000
    • Construction costs - $1,000,000
    • Non-construction costs - $750,000
      • Legal fees - $50,000
      • Fiscal agent - $35,000
      • BAN interest - $50,000
      • Developer interest - $200,000 (Board approved more than 2 years interest)
      • Issuance expenses - $65,000
      • Bond engineering report - $40,000
      • MUD Creation costs - $71,000
      • Admin/operational costs - $68,000
  • 2016
    • Bond amount - $2,000,000
    • Construction costs - $1,325,000 ($157k impact fees to City of Baytown)
    • Non-construction costs - $675,000
      • Legal fees - $60,000
      • Fiscal agent - $40,000
      • BAN interest - $26,000
      • Developer interest - $105,000
      • Issuance expenses - $78,000
      • Bond engineering report - $40,000
      • Admin/operational costs - $78,000