by KIM HILSENBECK
With just 28 votes deciding the issue in Nov. 2011, Hays County Emergency Services District (ESD) No. 8, which covers the city of Buda, lost out on roughly half a million dollars in additional sales tax revenue when voters said no to higher taxes.
At stake was the revenue from a potential sales tax hike on goods and services sold by businesses in the unincorporated areas outside the city limits – areas the city had set its sights on annexing in the future. Without being able to tap into that additional tax revenue, the city was miffed.
Had the ESD 8 had been successful in 2011, critics within the city said Buda would have lost out on nearly $3 million a year, according to estimates from a council-authorized study.
Sales tax inside city limits is already capped at the state-allowed 1.5 percent. In outlying areas, however, that tax is currently .5 percent, leaving a penny on the proverbial table. Voters in those areas would have to approve the increase. In 2011, they said no, but the issue caused friction between the city and ESD 8.
Comments made by Buda City Council members and the city manager set the stage for a rough-and-tumble fight all the way to the ballot box.
When Buda Fire Chief Clay Huckaby spoke about the tax election at an Oct. 18, 2011 council meeting, tensions were high.
Sandra Tenorio, Buda’s mayor pro tem, told Huckaby, “I’m so disappointed. I hate to feel betrayed, but I do. I feel stabbed in the back. You know what this means to the city.”
Other council members said they were “pissed” about the “sneak attack,” and they vowed to fight back.
Huckby alleged at council meeting later that fall that Williams said, “The City of Buda will do all that it can to make sure this election does not take place, or fails on election day.”
But all that finger pointing seems to be in the past.
ESD 8 is back in the ring, this time armed with a plan to share revenue that should appease Buda city managers and the city’s Economic Development Corporation (EDC), which relies on sales tax for nearly 100 percent of its operating budget.
A similar plan, brokered by County Commissioner Mark Jones in 2011, would have allowed a split of the additional revenue if the city annexed an unincorporated area where ESD 8 was already collecting the higher tax.
The deal fell through since voters turned down the increase.
The tone between the primary players, Buda Fire Chief Clay Huckaby and Buda City Manager Kenneth Williams, appears more collegial this time around.
At the Feb. 5 city council meeting, Huckaby presented the revised plan for ESD 8 to bring a sales tax increase election to the voters in unincorporated areas this May. But he had already talked with Williams and Mayor Todd Ruge weeks earlier about the plan.
In a handout shared with council members, estimates show that if voters approve the measure, the increased Sales and Use Tax will generate an additional $1,047,601 each year. The current sales tax brings in roughly $867,000 a year, according to the data Huckaby provided.
Under the proposed plan to increase sales tax in unincorporated areas outside the city limits, ESD 8 could take in $1,914,796 annually.
In 2011, the ESD 8 estimates put the figure at $500,000 in additional revenue. That’s an increase of about twice as much in roughly a year and a half.
Huckaby said the difference was in 2011, the ESD relied on the State Comptroller’s Office data. This time, he said a consulting firm, Sales Tax Assurance, provided the estimates.
Buda City Council voted at the Feb. 19 meeting to pass an interlocal agreement that would allow the city to receive some of those new tax dollars.
Huckaby said the discussions “have been approached much better and received well by all parties.”
He said ESD 8, at its Monday meeting, unanimously passed the same interlocal agreement as the one Buda council passed days earlier.
Huckaby added, “It is imperative the city of Buda and Hays County ESD #8/Buda Fire Dept. work together as the city and the ESD grow. Growth is coming to our area regardless. The city of Buda and the ESD must work together to be able to provide the best possible services to the citizens and businesses of Buda and surrounding areas.”
Ruge said the difference this time around with the agreement was communication.
Prior to the Oct. 18, 2011 meeting, Ruge said the council and city manager were caught by surprise because they had not heard about the plan to call an election for ESD 8 to raise sales tax in the unincorporated area outside the city limits.
“When the city annexes an area, the agreement is that we provide services,” Ruge said.
But if ESD 8 received the revenue from the higher sales tax, it would have prevented the city from tapping into that revenue stream to support future infrastructure, such as water, electricity and police service.
Ruge said this time around, the entities came to “a very good agreement.”
He believes the tone of the conversation is different now because he and Huckaby sat down and talked about the plan before Huckaby brought it to council. Initial conversations also included Williams, council members, lawyers and staff from the Buda Economic Development Corporation (EDC), which is funded almost entirely through sales tax revenue.
The proposed increase in funding, according to Huckaby, would help ESD 8 pay for several expenses including maintaining staffing levels as grants expire, paying down debt and purchasing new fire trucks, including apparatus for large and high-rise structures.
Huckaby said ESD 8 has identified several dozen large and/or high rise structures in the district, including seven Hays CISD schools, Creekside Villas Senior Apartments, Texas Lehigh, Buda H-E-B, Calebla’s and several hotels in Buda.
He said the additional money would also help provide enough staff at the Buda Fire Main Station to reduce response times, which currently average five minutes 46 seconds. The funds would be used to construct more fire stations in the future as call volumes and resources dictate.
