HUTTO – Williamson County Emergency Services District No. 3 gave a resounding "no" to three options presented by the city in Hutto's attempt to renegotiate the sales-and-use tax sharing agreement between the pair.
It is just the latest salvo fired in what is turning into a duel between the county fire service and the city’s plans to build its own fire station.
In a letter dated Sept. 8, Fire Chief Scott Kerwood told City Manager James Earp that ESD No. 3, also known as Hutto Fire Rescue, would not pursue the suggestions presented by the City Council Aug. 7.
“The issue before us should not be which entity receives the greater share of sales-tax revenue. The issue is whether the community will have the resources necessary to provide the right people, equipment facilities and emergency-response capabilities when they are needed,” Kerwood said in his letter.
The ESD, which is under the county umbrella, is a tax-funded entity originally designed to provide fire and medical support in rural areas. Hutto, meanwhile, is planning on opening its first municipal fire station.
When the council first floated the idea of a city-run fire department, officials commended Hutto Fire Rescue’s expertise and said Hutto wants to fold the organization into the city. Mayor Mike Snyder said ideally it would continue to work seamlessly with the only change being that Hutto, not the county, owned the agency.
In the Aug. 7 letter to Kerwood, the city offered three options:
• Allow the community to vote on giving the city 80% of sales tax revenue on annexed properties
• Sign an agreement to transition the ESD into a city-owned fire service
• Agree to an 80/20 allocation of sales-tax revenue for 30 years
“It’s very unfortunate that ESD No. 3 is unwilling to negotiate on our sales-tax sharing issue. The ESD No. 3 has an almost 90% reserve balance,” Snyder said. “Millions
are invested in infrastructure by the city of Hutto and I think it is wholly appropriate for the taxpayers of the city to get a return on the infrastructure costs.”
He added, “Bottom line is that you cannot operate a city responsibly without a long-term share of sales taxes — sales taxes that came about because of the investment made by the city of Hutto.”
Voters in unincorporated areas surrounding Hutto voted in 2016 to allocate a portion of the sales and use tax to ESD No. 3, as allowed by Texas law. The state receives a 6.25% sales tax and the county receives an additional 2% to make the total 8.25% sales tax.
Under the current agreement created in 2017 and renewed earlier this year, when a property is annexed into the city, ESD No. 3 will give the city 60% of its portion of the sales tax if the property meets certain requirements, one of them being that it is over 5 acres in size.
Snyder noted most retail properties annexed by Hutto are less than 5 acres so the city will not be able to collect any sales tax revenue, yet will have to fund infrastructure and city services to support the development.
In his letter, Kerwood said the money collected by ESD No. 3 is necessary for growth. Hutto Fire Rescue recently announced the purchase of land for a sixth fire station in the Hutto area.
The site is in the same area as land the city has bought to build its first city-owned station.
The growing area that is the epicenter for the dueling fire stations will soon be home to sales-tax heavy hitters slated for the Cottonwood Properties retail development, as well as the Hutto Megasite where construction is generating use-taxes.
“There is no room in public safety for decisions driven solely by financial considerations, politics or personal agendas. The responsibility shared by the district and the city is to put the safety of the community first; nothing more – and to ensure that the emergency services provided today remain capable of protecting this community tomorrow,” Kerwood said in his letter.
The missive added. “The district retains sole authority and responsibility to determine the resources capacity, and operational requirements necessary to provide adequate emergency protection. The district will work with the city, but it will not compromise or surrender that authority.”
The ESD’s response was first reported by community advocate site HuttoTransparency.org.
Hutto Fire Rescue posted the city’s letter and its own response on its website huttofire.gov/e-s-d-3.
