Relating to the creation of the Montgomery County Municipal Utility District No. 263; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

Contracts

• Reimbursement Agreements: Developers must draft agreements stipulating that infrastructure costs incurred now will be reimbursed by the District later. Warning: Ensure these contracts align with TCEQ allowable cost rules; non-compliant costs will be rejected during the bond application process.
• Municipal Consent Agreement: You must negotiate and execute a consent agreement with the City of Conroe (or applicable municipality) prior to the confirmation election. This agreement typically imposes stricter development standards than county code.
• Public Works Transition: Future construction contracts funded by the District must include statutory requirements for public works, including prevailing wage rates, payment bonds, and performance bonds.

Hiring/Training

• Director Appointments: You must identify five qualified temporary directors. These individuals must be prepared to execute $10,000 faithful performance bonds and take the oath of office immediately upon TCEQ appointment in 2026.
• Professional Services: Retain Bond Counsel and a District Engineer immediately to prepare the creation petition and consent negotiations.

Reporting & Record-Keeping

• Petition for Creation: Prepare a petition detailing the holders of a majority of the assessed value of the land. This document must be ready for filing on January 2, 2026.
• Road Standards Verification: Per Section 8016A.0304, you must document that all road projects meet the construction standards of the municipality (if in ETJ) or county (if outside). Obtain written approval from the Texas Transportation Commission if state roads are involved.

Fees & Costs

• Ad Valorem Taxes: The District is authorized to levy operation and maintenance (O&M) taxes and unlimited contract taxes, subject to voter approval.
• Bond Issuance: The District may issue tax-exempt bonds. Note: Road bonds are strictly capped at 25% of the assessed value of real property in the district at the time of issuance.