| Who Will Pay for the Limited District? And How? |
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**Comments in italics are solely the factual analyses by and opinions of the AMFuture candidates The Money Source Money for the Limited District will come from • taxes paid by property owners, • fees charged for the pool or other uses, and • the surplus fund The Surplus Fund The surplus fund is a fund that was specially set up under the SPA for the LD. It has been funded from excess revenue collected from property tax and water/wastewater billing. The 2007 balance is approximately $ 9,827,089. **The surplus fund will go to the City of Austin if voters do not approve the LD. The City Council approved in its March 20th vote using any money it receives for projects in Anderson Mill. To alleviate worries about the City’s intentions, AMFuture would seek an amendment to the SPA or a transition agreement with the City, as allowed in the SPA. The Money Flow The taxes to be paid by property owners will depend on the expenses incurred by the Limited District. The directors of the LD will develop a budget for the year and will then set a tax rate to collect an amount to cover the budget expenses. These expenses will be for the parks, the pools, trash service and deed restriction enforcement. **The MUD Board has not developed a budget estimate of the LD. For discussion purposes, a AMFuture has developed a budget estimate here. Estimated Tax Rate Voters will decide in the LD election on a tax rate. It cannot be less than $.10 per $100 of assessed value nor greater than $.50 per $100. The MUD Board has given one tax rate estimate of $.10/$100 for the LD. **This tax rate will not produce enough tax revenue to pay for all expenses as shown in the budget estimate. It will be necessary to withdraw money every year from the surplus fund to pay for expenses. The surplus fund will be depleted in the 8th year of the limited district, as shown, unless taxes are raised. The MUD Board has stated taxes cannot be levied in the first year of the limited district. If so, the surplus fund will be emptied in the 7th year of the limited district, as shown. After the fund runs out, the tax rate would have to be increased to an estimated $.46/$100 and higher. Here's why: 1) The total costs in 2017 for parks/pools/trash/deed restriction enforcement are estimated to be $2,352,595 (a 6% inflation rate is assumed). 2) The present MUD tax rate is $.46/$100 and in 2007 collected $2.2 million in tax revenue. 3) Similarly, a .46 tax rate would be needed to collect the $2.3 million for expenses in 2017. This would be in addition to the city's property tax rate. For example, the Tanglewood Limited District in south Austin provided pool/park/trash service at one time. It’s tax rate was $.3675/$100. In 2007, it dropped the trash service and the City of Austin provides it. Tanglewood’s tax rate is now at $.22/$100 for parks and pools. Taxes to pay for LD’s First Year The MUD states that no tax money can be collected for the LD for its first year, 2009, so property owners will not pay any tax until possibly 2010. The SPA states specifically that “The [MUD] and the Limited District may continue to levy an ad valorem tax in all of the areas within the District Boundaries as long as the District or the Limited District continues to exist, irrespective of annexations for limited or full purposes by the City of any areas within the District Boundaries.” **The LD will automatically exist after annexation on December 31, 2008 and afterwards if voters approve. This provision appears to allow taxes to be assessed and collected for 2009. Further, the MUD holds in retained earnings approximately $4,311,574 (per 2007 MUD Audit Report: $14,138,663 end of year balance less $ 9,827,089 surplus fund). These earnings could be used to pay for first-year LD expenses without having to use the surplus fund. Will you see double on your tax bill? The City of Austin tax bill WILL NOT be reduced for Anderson Mill due to existence of a LD. In other words, the city’s tax bill would not be offset by the LD’s tax bill. With a LD, Anderson Mill property owners will pay both the City's and the LD's taxes. Alternatively, if the LD is rejected by voters, the City would maintain the Parks/Pools, Trash, and Code Enforcement services in addition to others. The City has agreed (in the SPA) to maintain these services at the current level of service for the 10 year duration of the agreement. Next: When is the election for a Limited District? |