Municipal Utility District vs. HOA, What is the Difference?

What is a MUD and HOA?

Municipal Utility District

A Municipal Utility District (a “MUD”) is a political subdivision of the State of Texas authorized by the Texas Legislature, Texas Constitution, and the Texas Commission on Environmental Quality (the “TCEQ”) to provide water, sewage, drainage and other services within the MUD boundaries.


A Homeowners Association (a “HOA”) is membership of homeowners that is responsible for the enforcement of the Covenants, Conditions and Restrictions for the properties in their immediate subdivision.

How are they Created?

Grand Mission MUD No. 2

Grand Mission Municipal Utility District No. 2 (the “District”) was created in 2005 by the TCEQ. The District was approved by the majority of the registered voters within the boundaries of the District. The District currently contains 688.4 acres.


HOA’s are created under and regulated by state law. In Texas, a committee of at least three land owners in the boundaries of the proposed HOA must form to petition for the creation of an HOA. The committee must file official written notice and requires at least 60% of the property owners to sign and approve the petition for creation. Typically, most HOA’s are created by the Developer and/or Homebuilder in the neighborhood’s early stages. Most HOA’s are created as a non-profit entity for the purpose of serving the community.

Who is the Governing Body?


The governing body of an HOA is referred to as the Board of Directors. The By-Laws of each HOA state the number of Board members, how they are elected or appointed, and their terms of office.

The District

The governing body of a MUD is an elected Board of Directors. The Board of Directors is typically comprised of five (5) people who are property owners (or registered voters) within the boundaries of the MUD and are elected to four (4) year staggered terms by a majority vote of the registered voters within the District.

The District employs the following consultants to assist the Board of Directors in the management and operations of the District:

  • Engineer – Quiddity Engineering, LLC
  • Attorney – Coats Rose, P.C.
  • Operator – Municipal District Services
  • Bookkeeper – Myrtle Cruz, Inc.
  • Financial Advisor – Rathmann & Associates, L.P.
  • Tax Assessor/Collector – Tax Tech, Inc.

How are they Funded?

The District

The District is funded through ad-valorem taxes and water and sanitary sewer revenue. The District has authority to tax all property owners within its jurisdictional boundary. Water and sanitary sewer rates are imposed on all residential and commercial users, which may include a combination of single family subdivision(s), multifamily, commercial, or other types of property.


HOA’s are typically funded through annual assessments or special assessments. Only residents within the specific HOA’s boundaries pay assessments to the HOA.

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Weather Update as of 12/19/22

  • The approaching arctic air outbreak will be the coldest air mass since February 2021.
  • It is forecast that temperatures will drop quickly Thursday Night into Friday Morning.
    • Temperatures likely to be in the teens north of Highway 105, near 20 degrees near I-10, and in the mid 20s south of I-10
    • Many areas could be below freezing for 20-36 hours
  • Many areas will likely not get above freezing on Friday.
  • Though warming into the upper 30s will occur on Saturday, temperatures will drop below freezing on Saturday Night/Sunday Morning

Important to Protect the Four Ps

  • People
  • Pets
  • Plants
  • Pipes

National Weather Service Information

  • Thursday into the Christmas Holiday
    • The Arctic front is on track to move into the area on Thursday. It will bring periods of freezing temperatures (and likely some <25°) into much of the weekend.
    • Too early to confidently pinpoint exactly just how low readings will fall, or how many consecutive hours below freezing any single location will get.
    • Confidence is high that we will see some bitterly cold air and freezing temperatures, but don’t focus on any individual model, or model run, this far out.
    • The specifics will change as time progresses.
  • All businesses and residents should begin preparation for some hard freezes before the coldest weather is set to move in on Thursday.
  • For industry that needs an extended amount of lead time, the NWS encourages individuals to review plans/actions that might need to be implemented should conditions warrant (any extended durations of subfreezing temperatures, gale force winds, high seas, low water conditions, etc.)

Notice Regarding Extreme Weather Emergencies

This communication is to notify you that Grand Mission Municipal Utility District No. 2, your retail water and sanitary sewer provider, is:

  • prohibited from imposing late fees or disconnecting retail water or sewer service for nonpayment of bills that are due during an extreme weather emergency until after the emergency is over;
  • required to offer a payment schedule to a customer who requests such a schedule for unpaid bills due during an extreme weather emergency; and
  • prohibited from disconnecting retail water or sewer service for nonpayment of bills due during an extreme weather emergency until after a payment schedule has been offered and the customer has either declined to accept the payment schedule in a timely fashion or violated the terms of the payment schedule.

For purposes of this communication, an “extreme weather emergency” is defined as a period beginning when the previous day’s highest temperature in an area did not exceed 28 degrees Fahrenheit and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Service reports for that area. An extreme weather emergency is over on the second business day the temperature exceeds 28 degrees Fahrenheit.

Aviso Sobre Emergencias Climáticas Extremas

Esta comunicación es para notificarle que su proveedor de agua y alcantarillado sanitario Grand Mission Municipal Utility District No. 2 es:

  • prohibido imponer cargos por demora o desconectar el servicio de agua o alcantarillado por falta de pago de las facturas que vencen durante una emergencia climática extrema hasta después de que termine la emergencia;
  • obligado a ofrecer un plan de pago a un cliente que solicite dicho acuerdo para las facturas adeudadas durante una emergencia climática extrema; y
  • prohibido desconectar el servicio de agua o alcantarillado por falta de pago de facturas adeudadas durante una emergencia climática extrema hasta que se haya ofrecido un plan de pago y el cliente se haya negado a aceptar el plan de pago de manera oportuna o haya violado los términos del plan de pago.

A los fines de este comunicado, una “emergencia climática extrema” se define como un período que comienza cuando la temperatura más alta del día anterior en un área no superó los 28 grados Fahrenheit y se pronostica que la temperatura permanecerá en ese nivel o por debajo de este durante las próximas 24 horas. de acuerdo con los informes del Servicio Meteorológico Nacional más cercano para esa área. Una emergencia climática extrema termina el segundo día hábil en que la temperatura supera los 28 grados Fahrenheit.