What is the Karis Municipal Management District (KMMD)?
The KMMD is a municipal management district located within the city of Crowley, TX. Municipal management districts are a political subdivision of the state, and KMMD is separate from the city government.
Municipal management districts typically serve as a financing mechanism for commercial, residential, or entertainment development. They are able to levy taxes within the territory of their districts, and finance improvements or services through issuing bonds.
On June 7, 2018, the Crowley City Council heard a presentation regarding the creation of a Municipal Management District (MMD), noting in the minutes that: “As part of the financing of the Karis project by the Nehemiah Company is wanting to establish a MMD.” The Crowley City Council then gave its permission for the creation of the district within its city limits.
In late 2018 the Nehemiah Company, a real estate development firm that developed the Viridian area of Arlington, announced that it planned to begin “a Viridian-style project called Karis – with slightly less expensive homes – on 550 acres in Crowley that will include ponds, jogging paths, neighborhood parks and a host of other quality-of-life amenities.” The company’s CEO, Robert Kembel, stated: “We want to do for Crowley what we’re doing for Arlington.”
KMMD was established by the Texas of Environmental Quality on February 19, 2019. The initial directors appointed at the time of founding are: Ron Smith & Tom O’Dwyer (two-year terms), and Michael McFarland, Cody Klipfel, and Martin Sprandley (four-year terms).
During the 2019 state legislative session, Senate Bill 2456 was introduced, relating to the powers and duties of KMMD. The bill sought to make changes to the district boundaries, allowing KMMD to charge civil fines of between $25-$250 for violations of district regulations, and providing KMMD with the authority to issue bonds.
On June 30, 2019, Governor Greg Abbott vetoed the bill, arguing that the additional powers that SB2456 would grant to KMMD would allow them to impose additional taxes for services that residents expect the city to provide, such as police and fire protection, construction, and permitting, using city taxes.
In November 2019, KMMD is seeking voter approval for several propositions, including issuing bonds and levying an operations and maintenance tax in the district.
- Text of SB 2456 (vetoed by Governor Abbott, 6/15/19) https://legiscan.com/TX/text/SB2456/id/1971590
- Filing documents for creation of KMMD (Feb 13, 2019), Texas Commission on Environmental Quality Docket No. 2018-1540-DIS (includes all petition materials, including detailed map of district, estimation of costs over next 35 years, and information about KMMD Board), https://www.tceq.texas.gov/assets/public/comm_exec/agendas/comm/backup/Agendas/2019/02-13-2019/1540DIS.pdf
- “Two giant housing projects…,” Fort Worth Business Press (Nov 3, 2018) (references Karis development project) http://www.fortworthbusiness.com/news/briefs/two-giant-housing-projects-one-builder-and-an-office-staff/article_04281158-dee7-11e8-9536-1f9e4a2fe1f3.html
- Agenda (Jun 7, 2018), Crowley City Council (includes notice of presentation regarding proposed KMMD) https://www.ci.crowley.tx.us/AgendaCenter/ViewFile/Agenda/_06072018-470
Recent News Articles
- Office of the Texas Governor, “Governor Abbott vetoes SB. 2456,” Texas Tribune (Jun 15, 2019), https://gov.texas.gov/news/post/governor-abbott-vetoes-sb-2456
What is a bond?
A bond is essentially an IOU. Instead of going to a bank to get a loan, like an individual might do, governments can issue bonds to raise money for specific projects. An investor buys a bond on the understanding that they will be paid back, in full and with interest, on a set date (limited by law to 40 years). In most cases, governments must seek voter approval to issue a bond.
PROPOSITION A[table “852” not found /]
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What is a Maintenance and Operations (M&O) tax?
An M&O tax is levied by a district to fund its day-to-day activities and services.[table “857” not found /]