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Municipal Utility Districts

Municipal Utility Districts (MUDs) can be created by provisions of the Constitution, the Water Code, or Legislative Act. MUDs may help finance the cost of water, wastewater, drainage and detention required for development, usually (but not necessarily) in unincorporated areas. MUDs have the power to levy an ad valorem tax to repay developers for the provisions of needed services plus the operation and maintenance of district facilities. MUDs generally reimburse developers from between 70% to 100% for water, sewer, drainage and detention costs, as well as associated financing costs. Some MUDs have road construction powers as well. MUDs have also recently been given broader powers to provide such additional services as garbage collection, security, and parks construction.