Central Tx ESD bows out of referendum vote

When a pending collision between two sales-tax referendums on the Nov. 3 ballot threatened to doom both, Hays County’s Emergency Service District 6 officials yielded.

District 6 officials on Oct. 14 canceled a referendum aimed at collecting sales tax money to employ more firefighters because of a competing referendum in Driftwood called by Salt Lick owner and developer Scott Roberts. He wants to create a taxing district on his property, where he is the sole voter.

If both tax increases had passed, they would have raised the sales taxes in the area past the legal limit, and both referendums would have been voided.

The District 6 proposal will remain on the Nov. 3 ballot but will not be reported.

“It is my understanding that (voter approval of both referendums) could possibly cancel both elections, or one could take precedence,” said Joyce Cowan, Hays County’s elections administrator. Cowan said District 6 backed out too close to the vote date to remove the measure from the ballot.

The state caps sales tax at 8.25 percent. Sales tax in the area is currently 7 cents on the dollar — 6.25 cents for the state, .5 cent for Hays County and .25 cent for the library district. Together, the increases proposed by Roberts and District 6 would have brought the sales tax in the area to 9.25 percent.

If the Nov. 3 referendums were voided, the district and Roberts would have had to wait at least a year before they could put the proposals on the ballot again.

Instead, the district’s board decided to try again on a May voting date and to carve Roberts’ property out of the jurisdiction.

Roberts’ development will still be served by the district, but none of the sales tax collected at the Salt Lick restaurant — the area’s biggest retail business — will go to support it.

Property tax revenue from the homes and businesses Roberts is planning to build at the development will, however, go to the district. So as the area grows — and adds to the demand on the district — tax revenue to the district also will grow.

Roberts said his development has the option in the future to enter into an agreement with the district in which Roberts’ development would supply sales taxes if the district encountered a shortfall.

Officials in District 6 — in the northern third of Hays County and encompassing Driftwood, Dripping Springs and Henly — called for a 1-cent sales tax increase after receiving a federal grant of about $972,000 to hire more firefighters, said Cliff Avery, spokesman for the district. The grant is spread out over five years, and on the fifth year, the district would be responsible for paying the salaries of their additional staff, Avery said.

District 6, which has 10 full-time paid firefighters, relies heavily on volunteers. But volunteers are in short supply because of the area’s aging and increasingly commuter population.

Roberts wants to use money raised by his tax to maintain a planned residential and commercial development on 540 acres he owns off FM 1826 and FM 150. If the referendum passes, the tax would apply to food and merchandise sold at the Salt Lick. The 1.25 cent sales tax increase would only affect sales on Roberts’ property.

The Legislature approved the referendum, Roberts said. Because he’s the only registered voter living on the property at the moment, Roberts is the only person who will get to vote in the referendum.

“It was a surprise to everybody,” Roberts said of the discovery that the two referendums would void each other. “The county didn’t even catch it until late in the game.”

A 2007 state law allows emergency service districts to call a sales tax referendum and carve out areas that are already at the sales tax limit. However, had the district gone forward and Roberts postponed his proposal, he would not have been able to exempt himself, said Bob Love, board president of District 6.

“We have that leeway. He doesn’t,” Love said. “It was an unfortunate event and just easier for us to cancel.”

Love said that had it passed, the district’s tax would have raised about $20,000 a month starting in the spring.

Some firefighters within the district have been critical of the postponement, saying that money could have been used to purchase new equipment. Carving out the Salt Lick would cost the district about $3,300 a month.

But, Love said, Roberts has “always been a good neighbor” and has donated food and money to the district and hosted events for firefighters.

Roberts said he agreed to compensate the district for the cost of their referendum notice mailings and will hold fundraisers for them at the Salt Lick for three years.

“Our family’s going to continue everything we’ve done in the past to make sure the ESD is properly funded,” Roberts said.

American-Statesman By Patrick George