Sunday, January 18, 2009

The Sunday Reader: Bronin on the Myths and Realities of Special Municipal Utility Districts

With the Supreme Court now poised to take up Northwest Austin Municipal Utility District v. Mukasey, the case challenging Congress's reauthorization of the Voting Rights Act (Section 5)--my previous post on this is here--you might reasonably ask (as I did): 

So, what's a municipal utility district, anyway? 

It turns out that Professor Sara Bronin (formerly Galvan, U. Conn. Law) answered that question beautifully (and with great prescience) over a year ago in her Fordham L. Rev. article Wrestling with MUDs to Pin Down the Truth About Special Districts, also available on ssrn.  This is the kind of practical examination that could add reality--reality!--to an all-too-often abstract debate about the nature of special districts and preclearance under the VRA.  It is a must-read for anyone seriously interested in the constitutionality of VRA reauthorization, including the Court.

Let's start here: A municipal utility district, or "MUD," is a "board-run, special purpose local government unit[] that [is] administratively and fiscally independent from general purpose governments."  They're authorized by state constitutions and most often (in Texas, anyway, the state of Bronin's analysis) created by developers.  They're designed to give local democratic control over utilities so that local citizens have a say in how their local utilities are managed.

They sound like a model of local democracy: Take a collective action problem like the distribution of almost-public goods--and a problem that is not easily solvable by general municipal or state governments--give it to a smaller political subdivision, and allow citizens to elect local and highly accountable boards to deal with it.  MUDs thus offer a model of local democracy; subject-matter specialization by way of a limited, defined purposes; and geographic specialization by way of a limited, defined boundaries.

But Bronin paints a very different picture.  She takes on each of these three reasons for MUDs--democratic accountability, subject-matter specialization, and geographic specialization--and shows how the reality fails to match the myth. 

Bronin presents an important and thoughtful analysis throughout the piece, but for purposes of Northwest Austin and VRA reauthorization the critical section of the paper deals with democratic participation (Section I, pp. 3042-57).  Here Bronin exposes MUDs as little more than tools for developers to clear the way to distribute infrastructure costs.  Bronin:

Developers support MUDs because MUDs provide a vehicle for them to recoup initial infrastructure expenditures: Typically, MUDs issue bonds in the amount of the expenditure and immediately repay the developer; then, MUDs tax incoming landowners to repay the bond. . . .

As a result, MUDs are, from formation through initial governance, in large part controlled by Texas's real estate developers, not the general public.

But MUDs also suffer from a long-term lack of democratic participation.  Bronin shows that few landowners bother to vote, board elections have gone uncontested, and board turnover has been known to be slow.  When members do leave, they have been known to hand-pick their successors.  Moreover, MUD boards and developers across MUDs exert strong political influence even outside individual MUDs, while MUD citizens have no coordinated and organized voice in state politics.  The democracy deficit has "facilitated numerous cases of fraud or unlawful behavior on the part of MUD boards and individual directors." 

In short, these are hardly models of local democracy. 

And that's the kind of harsh reality that needs to be a part of any serious examination of the VRA.  Bronin's task, to be sure, is not to challenge MUDs as racially discriminatory.  But her kind of practical examination of MUDs--what they are, how they run, who they serve--is exactly the kind of analysis that should inform our study of, and the Court's analysis of, VRA reauthorization in Northwest Austin.

Bronin points out that "[t]he Supreme Court has had difficulties distinguishing between special districts and general purpose local governments . . . ."  Bronin's piece is an important step in the direction of clearing up these difficulties.  I highly recommend it.


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