The increase—from $0.05271 per $100 of valuation to $0.0598 per $100 of valuation—comes after several consecutive tax rate decreases for ESD No. 9. For the owner of a $200,000 home, the new tax rate would result in an increase of roughly $13 on their annual property tax bill after factoring in the $5,000 homestead exemption offered by the district.
ESD No. 9 is the governmental entity that oversees the Cy-Fair Volunteer Fire Department. Officials with both organizations are planning to merge into one governmental entity called the Cy-Fair Fire Department at the end of the calendar year, a move that is reflected in the FY 2019-20 budget's dedication to increasing its staff members and to begin offering new employee benefits, including a pension plan.
"The biggest priority is going to be hiring more staff," Commissioner Tommy Balez said in a phone interview. "That will be coming at a pretty rapid rate. We had a huge response from applicants. There’s quite an appetite for people to come over and work in the new Cy-Fair Fire Department."
Balez said initial plans call for bringing new hires on in classes of 15-20, but the overall process is being driven by a desire to hire people who are qualified as fast as possible.
Included in the budget—a copy of which was supplied to Community Impact Newspaper on Oct. 16—are funds to advance a number of construction projects on new stations. Construction is expected begin next year on a $6 million project to build a new Station 5, which is relocating from Asperglenn Drive to French Road after the current station sustained millions of dollars in damage from Hurricane Harvey.
Meanwhile, work on a new administration building near Telge Road and Hwy. 290 is expected to wrap up in the first quarter of 2020. Balez said he hopes to have a large portion of a new Station 1 built in 2020 as well, which will be located off Fairbanks N. Houston Road. A total of $5 million and $6 million have been allocated to those two projects, respectively.
Balez said he also expects the district to make land purchases for two new stations, which will be located near FM 529 and the Grand Parkway and near the Towne Lake subdivision. He said the district could also purchase land for a new station on the eastern portion of the coverage area as well.
"We’ve got a lot of things to do in the future to get the new Cy-Fair Fire Department up and running and hire staff and get the new stations that we would’ve needed no matter if we stayed with the old org structure or the new one," Balez said.
New tax rate
Balez said the decision to increase the tax rate was partially to prepare for planned growth and partially out of concern over a new state law going into effect Jan. 1 that will limit how much the district can increase its revenue from year to year without voter approval.
The law, following the adoption of Senate Bill 2 in the 2019 state legislative session, will limit how much a taxing entity can increase property tax revenue earned from properties on the tax roll; voter approval will be required to authorize an increase of more than 3.5% from the previous year. The new tax rate for ESD No. 9 is expected to raise about $24.9 million in revenue, up from $20.3 million in the previous year.
"Almost every year we’ll be rolling back our tax rate because of SB 2, and that puts us in a precarious position with all the spending we have to do to keep with the growth in our community," Balez said. "We have to guess what the future looks like in 10 years at a minimum. Before, we would keep lowering taxes until we need to raise them. Once they took the control out of our hands, that puts in a hard spot moving forward."
Despite the tax rate increase, the district still anticipates to run a deficit budget of about $7.3 million, Balez said.
"With the number of capital projects and staff we’re bringing on, that was gonna happen no matter what," he said. "The community is demanding we have a certain response time from 100% fully staffed stations both on the medic and fire suppression side. To do that we have to spend money."