Bond Authorization Election Information
The Newport MUD Board is pleased to announce the $52,960,000 bond authorization election for the May 2, 2020 election cycle. The board has responded to our neighbors’ comments, concerns and requests expressed at the Community Meetings, Saturday morning “Coffee & Conversation” gatherings, countless individual meetings and telephone conversations. The Board listened and made these adjustments to respond to our voters:
- The Board directed the District Engineer to reduce the timeframe of the MUD’s Capital Improvement Plan (CIP) from 10 years to a 6 Year CIP. This reduced the amount of the proposed bond authorization from $70,000,000 to $52,960,000. This plan takes the MUD through the mandated expansion of the Surface Water Treatment Plant (SWTP) and the Waste Water Treatment Plant (WWTP) in 2025 and takes care of all the MUD’s anticipated capital needs for the next six years.
- As a result, the Board anticipates that we will need to call another bond election at a future time to complete the necessary district work listed on the last four years of the original 10 year CIP.
Community Meetings will continue at least once a month for further discussion. The next meeting will be March 24, 2020, at 6:30pm in the Community Room next to the Fitness Center at 16401 County Club Drive.
In addition, two MUD Board members can be available for “Coffee & Conversation” on Saturday mornings, at Stonebridge. It is greatly appreciated if neighbors interested in the Saturday morning meetings would RSVP by utilizing the Contact Us Form on the District’s website at www.newportmudtx.org ahead of time to make sure we have adequate accommodations. Look for these notifications on Newport Resident Facebook page and Nextdoor Newport.
The Newport MUD Board would like to thank all our neighbors for your comments, participation and thoughtful recommendations. The Board looks forward to continuing this open dialogue, reporting on district progress on all projects, and completing the CIP on time and on budget.
To ensure that the residents of the District have accurate information regarding the proposed bond authorization and the Board’s goals for the District, we have put together answers for our residents’ common questions. The Bond Authorization FAQs ( Frequently Asked Questions) will be posted on the District’s website for easy viewing. To review a copy please go to www.newportmudtx.org or if you would like to receive a copy by mail please contact the District’s Operator at 281-324-9803.
In an effort to inform the residents of Newport, the Board of Directors welcomes the chance to address any questions or concerns the residents may have regarding the Bond Election.
Frequently Asked Questions
What is Newport MUD?
Newport MUD is responsible for providing water and sanitary sewer service to approximately 12,000 residents in over 3,907 Homes in the 2,350 acres that make up the District.
What is Newport asking for?
The District is requesting authorization from its voters to issue $52,960,000 of bonds in several smaller increments over time, as needed, to fund the required construction, maintenance and rehabilitation of the District’s water and sanitary sewer infrastructure over the next six years. This plan will also include the expansion of the water treatment and wastewater treatment plants to provide greater capacity to residents and support the District’s proactive system goals.
What is a bond authorization?
A bond authorization is a request for voter consent for the Board to sell bonds to fund District projects. It is similar to a line of credit that a business might use to fund its operations. An authorization is not immediate funding, nor is it a “blank check” to fund the entire amount of the authorization without meeting regulatory requirements. While an authorization may be for a larger amount, bonds may only be sold once necessary projects are ready to begin or as needed for repairs and maintenance. The total authorization amount will not be funded all at once.
The most recent approved bond authorization was in 2005, when the District’s voters authorized a total of $30,000,000 for the purpose of constructing water, sanitary sewer, and drainage facilities as well as an additional separate authorization for recreational facilities. This authorization has almost been completely utilized and additional authorization is being requested to fund necessary projects for the water and sanitary sewer infrastructure in the District.
What will bond authorization be used for?
If approved by District voters, bond funding will be used for several vital projects identified by the District’s engineer in our Capital Improvement Plan (often referred to as the “CIP”).
The CIP identifies the projects anticipated to be necessary over the next 6 years in order to maintain, rehabilitate, or rebuild the aging water and sewer infrastructure. The projects outlined in the CIP are all for the benefit of property already within the District’s boundaries.
Why is it necessary to do these projects now?
The District was created in 1972 and much of the District’s water and sewer infrastructure has been in place for many years. As infrastructure ages, it requires maintenance, rehabilitation, and, sometimes, replacement as part of its lifecycle. On average, infrastructure lasts about 30-40 years with optimal maintenance and operations, and much of our system has already exceeded its expected lifespan.
The District intends to issue bonds only as necessary over the next six years as outlined in the CIP in order to proactively rehabilitate its facilities and expand capacity to comply with the changing requirements set by state agencies and to repair or replace aged infrastructure.
Can’t the District just pay for projects without issuing bonds?
The primary alternative to authorizing the bonds is to fund all necessary projects on a “pay as you go” basis, likely requiring substantial increases in maintenance tax rates and/or water and sanitary sewer rates.
Funding projects with maintenance taxes, or water and sewer rates (billed monthly), would require a major increase in rates. This would be necessary in order to collect all the required funds in advance of starting any project. This method places the entire financial burden on current residents and could create significant delays for the completion of large projects, especially if there was an emergency repair.
Authorizing the District to issue bonds will allow the Board to spread the costs of the necessary projects over 20-30 years similar to how a mortgage on a home works. This enables the District to complete necessary projects quickly and allows the costs of the required projects to be both spread over a longer timeframe and shared by both current and future users of the District’s system, including commercial property owners.
How does the District manage taxpayer dollars?
As a result of prudent financial management throughout the years, the District has earned an A rating from S&P Global Ratings.
Through careful supervision of expenses and planning for maintenance, the District currently has 10 months of reserve funding. These reserves are available for emergencies and play a significant role in the District’s excellent credit rating and therefore allows the District to borrow money at a comparatively lower interest rate when issuing bonds.
How will the authorization affect our taxes?
Currently, the District’s engineer is projecting most (if not all) the funds will be needed over the next six years, but there are a number of variables that make it hard to accurately predict exactly when and where all the funds will be used. At this point, based on the engineer’s plan and all the information available to the District, Newport would only need to sell $12-$13M over the first two years (2020-2021), some of which is from the 2005 previously approved authorization. This would involve an increase of around $0.11 on the debt service tax rate over a two-year period to service that amount of debt (barring any emergency repairs or event). The largest tax rate increase would likely occur in the year 2025, when the District will be required to expand both its surface water treatment plant and its sewage treatment plant. The anticipated tax rate increase in that year is approximately $0.19.
For more information on the tax implications, residents are encouraged to attend one or more of the community meetings that the MUD has scheduled. The next meeting will be held on March 24, 2020 at 6:30 p.m. in the Community Room next to the Fitness Center at 16401 Country Club Drive. Attending a community meeting will give residents a better understanding how these funds will be used to maintain the District’s infrastructure and superior water rating moving forward. Bond authorization will give the Board an alternative way to pay for necessary expenses, rather than just from water and sewer revenues.
Who is responsible for drainage facilities within the District?
Harris County maintains the public roadways including the storm drainage system within it. Harris County Flood Control District maintains the drainage channels that convey the storm water, such as Gum Gully, within the District. Newport MUD maintains four detention facilities that have been constructed according to the Harris County standards in place at the time of design.
How will ongoing communication be handled regarding District projects?
The Board understands that improving communication with residents regarding its projects and goals is vital. The Board wants to maintain direct communication with all our residents. To that end, we will be using the District’s website, www.newportmudtx.org along with conversations with residents, and community education events to ensure residents are able to make an informed decision in May. To receive District information via email or text, please go to our website, choose the “District Alerts” tab on the left side of the Home page, and follow the instructions to enroll in email and text alerts.
I have more questions…
Good! The goal is for the residents to have all the information at their disposal when voting approaches. Additional questions can be fielded through the Contact Us Form on the District’s website at www.newportmudtx.org.