2012 Safe D 11th Annual Conference Overlapping Districts

Overlapping Districts

SAFE-D 11th Annual Conference
February 24, 2012

2705 Bee Cave Road, Suite 110
Austin, Texas 78746
(512) 614-0901
www.carltonlawaustin.com
©2011
©2012

Creating an Overlapping
District
• Why create another ESD?
– Additional Services
• Fire
• EMS
• Rescue
• More…..
– Additional Tax Revenues
• Constitutional Cap is $0.10 per District
• DOES NOT APPLY TO HARRIS COUNTY
Austin, Texas 78746
(512) 614-0901
©2012

Single ESD

Austin, Texas 78746
(512) 614-0901
©2012

Add Overlapping ESD

Austin, Texas 78746
(512) 614-0901
©2012

Add Overlapping Entity

Austin, Texas 78746
(512) 614-0901
©2012

Adjacent ESDs

Austin, Texas 78746
(512) 614-0901
©2012

Basic Process
• Petition
• Acceptance by County Commissioners Court
• Notice to Existing ESD
• Municipal Consent
• Public Hearing
• Order for Election
• Conducting the Election
• Canvassing the Election
• Order Creating the District
• And Then…

Austin, Texas 78746
(512) 614-0901
©2012

Petition
• 100 Qualified Voters, or a majority if less
than 100 Qualified Voters in the Area
• Name of the District
• Boundaries of the District
• Voter Printed Name, Mailing Address,
Voter ID Number, Signature, Date
• Agreement of 2 voters to pay not more
than $150 of costs
Austin, Texas 78746
(512) 614-0901
©2012

Boundaries
• May be designated by metes and bounds or
other sufficient legal description
• A statement that the boundaries are
coextensive with the boundaries of another
political subdivision, as those boundaries
exist on a particular date, is a sufficient legal
description
• CAUTION: Confirm accuracy and
consistency of legal description and any
Austin, Texas 78746
maps showing district. (512) 614-0901
©2012

Use Boundaries of Existing ESD

Austin, Texas 78746
(512) 614-0901
©2012

Use Boundaries of Multiple ESDs

Austin, Texas 78746
(512) 614-0901
©2012

Acceptance
• Proper petition received by County Judge
and filed with County Clerk
• Hearing at next regular or special session
after Petition is filed
• Notice of Hearing
– Sheriff must post on Courthouse door at least 21
days in advance
– Sheriff must publish in newspaper for 2
consecutive weeks (first at least 21 days in
advance)
Austin, Texas 78746
(512) 614-0901
©2012

Notice of Hearing
• County clerk provides Sheriff with the notice
of the hearing, which must state:
– that creation of a district is proposed;
– that it is to be created and is to operate under
Article III, Section 48-e, of the Texas Constitution;
– the name of the proposed district;
– the district's boundaries as stated in the petition;
– place, date, and time of the hearing; and
– that persons of interest may attend and present
argument.
Austin, Texas 78746
(512) 614-0901
©2012

Evidence of Notice
• The return of each officer executing notice
must:
– be endorsed or attached to a copy of the
notice;
– show the execution of the notice;
– specify the dates of posting and publication;
and
– include a printed copy of the published notice.
Austin, Texas 78746
(512) 614-0901
©2012

Proposed Overlap
• Where the proposed district overlaps an
existing district:
– Commissioners Court sends copy of the
petition to the existing district
– Before election, existing district must adopt a
statement of services detailing the services it
will provide in the overlapping territory if the
proposed district is created
Austin, Texas 78746
(512) 614-0901
©2012

Statement of Services
• Operations • Management
– Fire – Fire Code
– EMS Transport – Fire Marshal
– First Response EMS – Billing
– Hazardous Materials – Capital Financing &
– Rescue Ownership
– Others… – Administration
– More…

Austin, Texas 78746
(512) 614-0901
©2012

Municipal Consent
• Municipal Consent required for area within City
Limits or ETJ
– written request to City for consent
– 60 days for City to Respond
– if no consent within 90 days of request, file petition
requesting services
• majority of voters
• 50 percent landowners
– if refusal or no action within 6 months of petition,
deemed consent
• Consent valid for 6 months
Austin, Texas 78746
(512) 614-0901
©2012

Need Consent from City
For City Limits and ETJ
Austin, Texas 78746
(512) 614-0901
©2012

Special Consent Provisions
• Municipal Consent for City >1 Million and
County <1.4 Million Population (San
Antonio/Bexar County)
– limit the district's ability to incur debt;
– require the district to ensure that its
equipment is compatible with the
municipality's equipment; and
– require the district to enter into mutual aid
agreements. 2705 Bee Cave Road, Suite 110
Austin, Texas 78746
(512) 614-0901
©2012

Findings for Creation
• After the hearing and if Commissioners Court
Finds that creation of the district
– is feasible
– will benefit the territory in the district
– will secure the public safety, welfare, and
convenience, and
– will aid in conserving the real property or natural
resources in the proposed district
• Then Commissioners Court shall grant the
petition and fix the district's boundaries
Austin, Texas 78746
(512) 614-0901
©2012

Findings if City Included
• If the proposed district includes municipal
territory, the commissioners court must
determine if the district would still promote
the public safety, welfare, health and
convenience of residents if the municipal
territory were excluded.
• The commissioners court must make this
finding in connection with each affected
municipality.
Austin, Texas 78746
(512) 614-0901
©2012

Okay if City Not Included?
For City Limits and ETJ
Austin, Texas 78746
(512) 614-0901
©2012

Adverse Findings
• If the Commissioners Court finds that the
proposed district does not meet these
requirements, the Commissioners Court
must deny the petition.
• Commissioners Court decision is
discretionary.

Austin, Texas 78746
(512) 614-0901
©2012

Ordering Election
• Upon granting petition, Commissioners Court
must order election
• Ballot must include any terms negotiated with
an affected municipality.
• Notice of the election must be given in the
same manner as the notice of the petition
hearing.
• Election must be held on the first authorized
uniform election date that allows sufficient
time to comply with other requirements of
law. 2705 Bee Cave Road, Suite 110
Austin, Texas 78746
(512) 614-0901
©2012

Canvassing Election
• District Created if Majority of Votes In
Favor
• Must be Majority of Voters within City
Limits or ETJ in favor of creation to include
those areas in District
– If such territory is excluded, creation is not
defeated if the commissioners court’s required
findings regarding the remaining territory are
favorable to creation. 2705 Bee Cave Road, Suite 110
Austin, Texas 78746
(512) 614-0901
©2012

What did Commissioners
Decide?
For City Limits and ETJ 2705 Bee Cave Road, Suite 110
Austin, Texas 78746
(512) 614-0901
©2012

Canvassing Election
• Upon creation, the commissioners court
shall enter in its minutes an order
containing language prescribed by the
statute as well as any negotiated
conditions that were included on the ballot.
• If election fails, must wait one year to try
again

Austin, Texas 78746
(512) 614-0901
©2012

Order Creating District
• In form proscribed by statute
• Order should be filed in County Records
together with all other records relating to
creation of District
– Petition
– Municipal Consents
– Order Calling Election and Making Findings
regarding Creation
– Order Canvassing Election and Creating District
Austin, Texas 78746
(512) 614-0901
©2012

Overlapping District Issues
• The existing district must provide the
statement of services to the proposed
district after its creation
• The new district may not provide services
in the overlapping territory that duplicate
the services provided by the existing
district as set forth in the statement of
services
Austin, Texas 78746
(512) 614-0901
©2012

Getting Set Up
• Board Members
• Ad Valorem Taxes
• Sales Taxes
• Contracts for Services

Austin, Texas 78746
(512) 614-0901
©2012

Board Members
• Commissioners may serve on two districts
• A commissioner serving two districts may:
– only receive compensation from one board
– and be reimbursed for expenses by both.
• May want to submit names of initial board
candidates to Commissioners Court.

Austin, Texas 78746
(512) 614-0901
©2012

Board Members
• Appointed by Commissioners Court
– May be members of the existing district(s)
– Must execute Statement and Oath
– No emolument or dual office holding issues
– Must be aware of potential conflict of interest

Austin, Texas 78746
(512) 614-0901
©2012

Ad Valorem Taxes
• Impact on Tax Rates
– Transfer of governmental functions?
• Tax Code §26.04(i) and (j)
– “agreed by written contract to transfer a
distinct department, function, or activity to
another taxing unit…”
– No contract transfer unless Existing District
and Proposed District decide to enter into one
Austin, Texas 78746
(512) 614-0901
©2012

Ad Valorem Taxes
• If Transfer by Contract:
– Change in Rollback Rate Calculation
• Reduces revenues used to calculate Rollback Rate
for transferring district by amount of O&M revenue
used to fund transferred function
• Increases revenues used to calculate Rollback
Rate for receiving district by amount of O&M
revenue used to fund transferred function

Austin, Texas 78746
(512) 614-0901
©2012

Sales Tax
• Existing District keeps all Sales & Use Tax
authority
• New District can seek Sales & Use Tax
authority where available under 2% Local
Cap
– Including possible “carve out” areas

Austin, Texas 78746
(512) 614-0901
©2012

Contract for Services
• Authority under Interlocal Cooperation Act
or H&S Code 775.0366 (as added by SB
917)
• May contract with others for services
– Including overlapping ESD
– ESD as contract provider may provider
services that the ESD requiring services is
authorized to provide
Austin, Texas 78746
(512) 614-0901
©2012

• Fire ESD Provides to EMS ESD:
– EMS Transport?
– First Response EMS?
– Medical Director?
• EMS ESD Provides to Fire ESD:
– Fire Suppression?
– Fire Code Enforcement?
– Rescue Services?
Austin, Texas 78746
(512) 614-0901
©2012

• Other Models?
– ESD Provides Building and Equipment
– ESD Provides Administration/Management
– Other Options…

Austin, Texas 78746
(512) 614-0901
©2012

OVERLAPPING DISTRICTS
John J. Carlton
The Carlton Law Firm, P.L.L.C.
Austin, Texas 78746
(512) 614-0901
john@carltonlawaustin.com

Austin, Texas 78746
(512) 614-0901
©2012

2012 Safe D 11th Annual Conference Overlapping Districts

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2012 Safe D 11th Annual Conference Overlapping Districts