Annexations force district to explore alternative funding for providing aid

Twin Creeks and Bella Vista subdivision residents are being asked to vote for a sales tax increase that would support the very emergency services district they intend to leave.

Residents within the Volente-based ESD No. 14 will vote May 11 on a 1 cent sales tax increase on most business transactions within the district. The proposal would help the district accumulate an additional $80,000 per year for emergency services, Volente Fire Department Chief Walter Groman said.

The December 2011 annexation of the Deer Creek subdivision took away roughly one-third of the property taxes collected annually by ESD No. 14, but this potential sales tax boost would help cover much of that lost money, Groman said. The same proposed sales tax increase failed two years ago, largely because of a lack of support from residents on the east side of the district, Groman said.

But now that Twin Creeks and Bella Vista residents realize they will pay the same amount whether they stay in ESD No. 14 or seek services from Cedar Park, Groman said he anticipates more support this election.

"We need them to be supportive of [the sales tax increase proposal] even though they're going away," he said. "We could theoretically wait till they're gone, but that's potentially another year-plus without that money."

ESD No. 14 election

Working best in Groman's favor, he suggests, is the desire of Twin Creeks and Bella Vista residents to have a quality emergency services option nearby—even if Cedar Park becomes their primary responder.

The district, based out of the Volente Fire Department station on FM 2769, taxes 10 cents per $100 of property valuation, using the money for emergency rescue and fire services. Seventy percent of all calls received by ESD No. 14 require a medical-first response, Groman said.

VFD has relied in part on paid staff since 2004 after decades of volunteer-only service. In total, the department operates using 17 full- and part-time firefighters and an additional 17 volunteers. A three-person crew is always on staff, Groman said.

The full-service fire department operates on a thin budget, Groman said, typically about $900,000 per year. That budget took a hit in late 2011 when Deer Creek was fully annexed by Cedar Park. Groman said the district was forced to dig into reserve funding this year to help maintain service levels.

The Bella Vista and Twin Creeks homeowners associations have taken no official position on the sales tax increase proposal, but the response seems favorable, Twin Creeks HOA President Tom Moody said.

"Most of the homeowners understand the need for keeping a viable fire department and emergency services department close by," he said. "It's a win-win for everybody."

The problem, Groman said, is the Balcones forestland, a donut hole in the center of the district that accumulates no property taxes. The undevelopable, environmentally protected land makes up 55 percent of ESD No. 14, so the sales tax election becomes the best tool right now for the district to recoup its costs, Groman said.

"We're not trying to have a Cadillac," he said. "We're just looking for a good, strong dependable Chevrolet."

Pending annexations

The east side of ESD No. 14 will be erased if Twin Creeks and Bella Vista approve annexation into Cedar Park. Combined with Deer Creek, the area makes up 60 percent of ESD No. 14's tax base potentially lost in two years.

Cedar Park's history with Twin Creeks and Bella Vista stems back to 1990, Assistant City Manager Josh Selleck said, when a municipal utility district was created in the area and voluntarily placed within Cedar Park's extraterritorial jurisdiction—neighboring land that can eventually be annexed by the city.

Cedar Park had always planned on absorbing the area that came to be developed as Twin Creeks and Bella Vista, Selleck said; however, the subdivisions come with too much debt to rationalize a full-purpose annexation similar to Deer Creek. Instead, the city provided emergency services for the subdivisions on a contract basis.

But in 2010, the ESD ended that contract and began servicing Twin Creeks and Bella Vista, resulting in a 6.5-mile distance between the subdivisions and their primary responder.

"Once that was finally canceled, residents of those subdivisions started coming to the city and asking—begging—for what options there were," Selleck said.

Rather than fully annex the areas and risk taking on more debt for existing Cedar Park residents, the city proposed a limited-purpose annexation that would allow Bella Vista and Twin Creeks to leave ESD No. 14 without becoming fully incorporated into Cedar Park—an action that requires state approval.

Former Cedar Park Councilman and current state Rep. Tony Dale, R-Cedar Park, stepped in to author three state bills that would grant legislative authority to Bella Vista and Twin Creeks to de-annex from ESD No. 14 and receive city services without becoming fully incorporated.

"Neighbors prefer Cedar Park services because time matters in emergency services," Dale said, explaining how Cedar Park's Fire Station No. 2 is much closer—1.2 miles from the front entrance of Twin Creeks. "And if you've got the ability to provide higher services to residents, it's our obligation to do that."

The first public hearings took place April 10 and 11 when Cedar Park city officials defended the move to the state House County Affairs Committee. A final vote is expected before the end of the legislative session in late May.

"We hope it'll happen soon," Dale said. "I don't anticipate there will be a problem."

What happens next?

If approved, the 1 cent sales tax increase will affect businesses within ESD No. 14 not located within Volente. If the effort fails, VFD will review its alternatives, he said, which include an increased volunteer presence. The problem, he said, is that dynamics have changed in Volente since the fire department was predominantly volunteers.

"In years past you could get away with being a good volunteer just because you wanted to help people," Groman said. "But there's so many standards today it's harder to do that, especially in a more urban environment without the formal training."

And if the Twin Creeks and Bella Vista annexations proceed—a point Groman considers inevitable—ESD No. 14 will have to consider other options to continue providing full emergency services. A new, smaller emergency district is possible, among other options, Groman said, but he hesitated to prematurely speculate. He did estimate that if ESD No. 14 became inactive, residential homeowners' insurance in the area would likely increase 16 percent to 18 percent.

Twin Creeks and Bella Vista residents, on the other hand, would experience no tax hike if absorbed by Cedar Park—assuming the sales tax increase passes May 11. The residents would still need to petition to be partially annexed if Dale's legislation passes to make the transition official.

If the bills fail to advance, then city and state officials will return to the drawing board.

"We'll see where it goes, and if we're not successful, then we'll have to see where we are [next legislative session," Dale said.