Overview of the District’s Financial Program
(Purposes, Bond Issues and Tax Rates)

The District was created for the purposes of financing (a) the acquisition and/or construction of the water supply and distribution, wastewater collection and treatment, and storm drainage facilities (the “System”) and (b) the acquisition, construction and maintenance of parks within the District.  The System facilities provide infrastructure necessary to provide the District’s residents and customers with drinking and irrigation water, the ability to flush their toilets, and the means to drain storm water from the land located within the District.

The District lies outside the city limits of the City of Houston but within its extraterritorial jurisdiction is governed and regulated by the Texas Commission on Environmental Quality (the “Commission”) and State of Texas law. 

The District, with the approval of the Commission has the authority to issue tax exempt municipal bonds to finance the purchase and/or construction of the System facilities and its parks.  All bond issues must be approved by the Commission based on certain financial feasibility rules prior to their issuance.  Once approved, the District’s bonds are sold at competitive sale at fixed tax-exempt interest rates.  Over the years the Board of Directors (the “Board”) has established prudent fiscal policies that have allowed the District to acquire investment grade ratings and municipal bond insurance on its bonds.  Since 1991, the District’s bonds have been sold with an “AAA” rating as a result of acquiring municipal bond insurance.  The municipal bond insurance has allowed the District to issue its debt at the lowest available interest rates.    As interest rates have declined in recent years, the District has refinanced its outstanding debt at higher interest rates with lower interest rates to reduce its debt burden.

The District’s bonds are secured from ad valorem taxes levied on all property within the District (vacant land as well as improved property).  Currently the District levies a tax rate of $0.61 per $100 of assessed valuation. 

Bond Issuance History

Voters in the District have authorized an aggregate of $13,800,000 principal amount of bonds for the purposes of acquiring and constructing a waterworks, wastewater and storm drainage system to develop the land within the District and $1,775,000 principal amount of bonds for the purposes of acquiring and building park facilities.  Since 1968 the District has issued $21,565,000 principal amount of bonds and today $15,185,000          principal amount of bonds remain outstanding.    In addition the District has issued $5,165,000 principal amount of bonds to refund certain bond issues at higher interest rates for lower interest rate debt.   All bond issues are secured by ad valorem taxes levied on all property located within the District boundaries.