The council unanimously backed the creation of ESD 4, comprising most of the city's ETJ.
ESD 5 passed with a 5-2 vote. Several council members spoke in opposition to the idea of the second district but expressed a preference for residents to make the ultimate decision in November.
"From a legal standpoint, there should just be one ESD," Council Member Derrick Reed said. "I don't see anything wrong with the voters deciding. But I hope you all as voters become more educated about what an ESD is, what the end result could be."
If authorized by voters, the new ESDs would have a county-appointed board and would begin making preparations to collect property taxes and negotiate with service providers, such as the city of Pearland, though they could also opt to partner with other agencies. The soonest they could begin collecting property taxes would be in 2020, according to city documents.
In March, the city decided it would end emergency services to its extraterritorial jurisdiction as of Dec. 31 after it was compelled to release several communities from an annexation late last year. As a result, these areas had to come up with a way to secure services through direct negotiations with the city or by creating an ESD.
The city estimates ESD 4 could collect around $850,000 from the maximum property tax within its boundaries—10 cents per $100 valuation—and ESD 5 could collect around $614,000. However, the city's financial model suggests that providing services to these areas would cost about $1.4 million and $711,000, respectively. That means that neither district would be able to fully cover the cost of service, but it would be more than the city is currently getting, City Manager Clay Pearson said.
"The fact is, we're absorbing 100 percent right now," Pearson said.
City staff recommended consenting to ESD 4, but questioned the need for ESD 5 because the residents there could have joined ESD 4 or the nearby ESD 3, or it could pay for fire service directly through their municipal utility district, as some MUDs already do. However, several residents from the proposed district spoke during public comment to say their goal was to ensure they had a voice.
"The reason for ESD No. 5 is to ensure taxation with representation," Brian Reagan, a resident in the area for 27 years, told the council. "We want to pay the city of Pearland to provide us with fire and EMS service, but we want it to be our decision."
Learn more about the proposed ESDs in the September edition of Community Impact Newspaper.