by ANDY SEVILLA
Just as he took the helm at the Kyle Fire Department last week, interim Chief Clay Huckaby was tasked with laying the groundwork to call for a Use and Sales Tax Election to help fund fire services in a growing region.
“When I walked through the door, one of the first things that was asked of me is, ‘when can ya’ll go for sales tax election?’” Huckaby said at the Feb. 27 meeting of the Emergency Service District No. 5 (ESD 5).
Though ESD 5 commissioners decided to forgo calling the election for May, all voiced interest in calling a Use and Sales Tax Election in November.
The desperation for extra money was all too tangible as commissioners described the years-in-the-works project.
“We have no choice but to find an alternate source of funding,” said ESD 5 Commissioner Mike Fulton. “We’re at that point where our options are – find another source of funding or shrink the fire department with the cost of inflation each year. Those are the only two options that we have … we are at our maximum funding.”
Not wanting to repeat a vicious scene that could pit a city against a fire department, as Huckaby has at least once experienced in his career, he cautioned that pursuing sales tax collections in the extraterritorial jurisdiction (ETJ) of Kyle may be something to be granted more consideration.
“There are agreements you can possibly work up within the city,” Huckaby said. “I know that with this time frame, that was not researched. And that may be something you may want to research if you decided to go for a future (use and sales tax) election.”
Huckaby said ESD 5 could take in about $60,000 annually in sales tax collections at a $0.015 rate, from the 182 businesses operating in Kyle’s ETJ. He said the comptroller’s office informed him that 827 businesses were identified within the 78640 zip code. However, of those 827, only 182 were not already tapped at their two-cent max.
Taxing entities can collect up to $0.02 on a sales tax above the $0.0625 the state automatically charges for purchases. In Hays County, $0.005 is allocated for the county, and cities collect $0.015 on purchases made within their boundaries.
ESD 5, however, wants to collect the $0.015 sales tax on purchases made in their service region in areas not already annexed into cities.
But, city officials have voiced discontent with the move.
“This calling of the election kind of caught us off guard,” Assistant Kyle City Manager James Earp told ESD 5 commissioners. “I don’t feel that we were brought along on board as to the plans of this election, the needs for the election.”
“We would first ask that the board not call the election for the sales tax, and in the event the board has made up their mind to call the election for the sales tax, we would ask that we be given the opportunity to sit down and actually hammer out some sort of an agreement that both sides can live with long term.”
Though Earp described being blind sighted by the calling of a sales tax election, ESD 5 commissioners were under the impression that conversations allegedly had over a year ago gave them proper footing.
“Every time we’ve considered this it’s been with the idea that we would work cooperatively with the city for future revenue funding,” Commissioner Susan Meckel said.
October 20, 2011, minutes show the commission discussed the matter. And, minutes for their Dec. 14, 2011, meeting state that Commissioner Beth Smith “discussed the issue with Kyle City Manager (Lanny Lambert) who seemed agreeable to working with the ESD for sales tax collection outside of city jurisdiction, with some potential agreement on continued shared funding as the city annexes territory.”
Lambert, however, says he does not recollect that alleged 2011 conversation, and, furthermore, would not quickly give up future city sales tax.
Commissioners ultimately decided to table the calling of a sales tax election and begin conversations with Kyle in hopes of reaching an revenue sharing agreement.
Lambert said the city is willing to participate in those discussions.
