Council says city can’t give Cap Metro money to ESD 11

Questions about the legality of a proposed tax-sharing deal between Travis County Emergency Services District (ESD) 11 and the City of Austin emerged late Thursday evening during a public hearing on the city’s planned annexation of the Circuit of the Americas race track.

 

ESD 11 chief Ken Bailey came forward to push the idea that the city could take funds away from the Capital Metropolitan Transportation Authority and hand the money to ESD 11 during the city’s second public hearing on the annexation.

 

But Council Members said the City of Austin’s legal staff believes that the city lacks the authority to reconfigure taxation in the annexed region to award a one cent tax to ESD 11. That idea is the centerpiece of Bailey’s pitch, a proposal that would leave ESD as the emergency services provider for the track after annexation in exchange for the tax revenue.

 

If arranged according to Bailey’s pitch, Capital Metro – which would miss out on the penny awarded to ESD 11 – would be the major loser. Cap Metro officials told In Fact Daily Wednesday that they would oppose such a deal.  Travis County offered its support of the proposal Tuesday in a letter County Commissioners sent to members of the Austin City Council. (See In Fact Daily, October 17, 2012).

 

The idea is also supported by the Austin Firefighters Association, with a handful of stipulations – not the least of which is the idea’s legality.

 

Bailey says that the full annexation of the race track would leave his department without a major source of revenue – the sales taxes collected at the facility – in a region where, thanks to the city’s automatic aid agreement with county emergency services, it might respond anyway. He added that stripping the track out of his tax district could jeopardize service for residents.

 

Indeed, area residents, including Elroy Neighborhood Association president Cathy Olive, backed the ESD 11 pitch. Olive told Council Members that 45 of her neighbors had signed a letter that indicated their support for Bailey’s plan.

 

Council Member Mike Martinez suggested that, though Bailey’s idea may not be legal, there could be another way to work out a deal. “There is a pathway to potentially share revenue, and we have that opportunity through the automatic aid agreement with ESD 11,” he said.

 

ESD 11 attorney John Carlton told Council Members that he strongly disagreed with the city legal department’s interpretation of the law. He declined to clarify that for In Fact Daily, pending further discussions with city attorneys.

 

Council Members could vote on the Circuit of the Americas annexation as soon as November 8. Martinez asked the city’s legal department to continue discussions with Carlton and ESD 11.