Towne Lake’s MUD 501 to Issue $15M in Road Bonds Following Developer Reimbursement Request
Residents of Towne Lake served by Harris County Municipal Utility District No. 501 (MUD 501) are receiving important updates regarding district finances, road reimbursements, and the newly adopted 2025 tax rate. At the heart of this update is a significant development involving road bonds that ties back to long-standing agreements and evolving state law.
At its September 3, 2025 meeting, the MUD 501 Board was notified by its attorney of a $13 million reimbursement request from CW SCOA WEST, L.P., the developer behind Towne Lake. The reimbursement concerns construction costs for public roads and landscaping within MUD 501’s boundaries. This request follows legal updates that expanded what infrastructure developers can be reimbursed for.
A Look Back at the Agreement
MUD 501 and its developer originally entered into a financing agreement in 2009, according to MUD 501. Under this arrangement, the developer agreed to front the cost of constructing public roads and landscaping, while MUD 501 committed to reimbursing the developer through future road bond issuances. At that time, only major thoroughfares and regional roads qualified for reimbursement—facilities typically handled by MUD 500, the Master District responsible for regional infrastructure across Towne Lake.
However, a key change came in 2019, when the Texas Legislature broadened the legal definition of road facilities to include public streets and landscaping located within rights-of-way. The application of that law to existing MUDs like MUD 501 remained uncertain until 2022, when the Texas Attorney General confirmed its broader application.
What This Means for Residents
In response, MUD 501 will now issue up to approximately $15 million in road bonds—covering the developer's construction, engineering, land costs, and bond issuance fees. Importantly, to protect the district’s financial stability, the MUD 501 Board and developer reached an agreement that no interest will be paid on the reimbursed amount, even though Texas law typically allows for it.
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In a forward-looking move, the Board and developer also terminated existing financing agreements for utilities and park facilities and modified the road agreement to ensure this is the only reimbursement the developer will receive. These decisions were made to protect the district and its taxpayers from further unexpected obligations should state laws change again.
2025 Tax Rate Breakdown
Alongside the bond news, MUD 501 announced its 2025 tax rate, which will remain at $0.5972 per $100 of assessed property value. This rate comprises three components:
- Maintenance Tax Rate: $0.0622
- Debt Service Tax Rate: $0.1450
- Contract Tax Rate: $0.3900
The largest portion, the Contract Tax Rate, goes toward MUD 501’s share of regional services provided by MUD 500, which includes water, sewer, drainage, roads, parks, and more for the entire Towne Lake community.
Looking Ahead
Because the need for road bonds wasn’t anticipated in previous years, the Board acknowledged there may be future changes to the tax rate, depending on actual certified property values and financial requirements. However, they emphasized that every effort will be made to keep any tax increases minimal.
For Towne Lake residents, this update highlights how long-term planning, evolving state policy, and responsible governance intersect at the local level. As always, MUD 501 encourages residents to visit hcmud501.org to stay informed, engaged, and reach out with any questions about district operations or finances.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
