DEPARTMENT: Government and Public Affairs
DEPARTMENT HEAD: Jeff Coyle
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
Consenting to Emergency Service District No. 11's Request to Incur Debt
SUMMARY:
A resolution providing consent for Bexar County Emergency Services District (ESD) No.11 to incur debt of $500,000 for equipment. Consent is required pursuant to the agreement terms between Bexar County and the City of San Antonio that created ESD No. 11 in 2008.
BACKGROUND INFORMATION:
On January 17, 2008, City Council approved, through ordinance #2008-01-17-0030, an agreement with Bexar County to create Emergency Service District No. 11 within the City's Extraterritorial Jurisdiction (ETJ) for the provision of fire suppression and emergency medical services for individuals residing within the district's boundaries. ESD No. 11 is located in eastern Bexar County and is generally described as bounded on the west and south by the city limits of the City of San Antonio; on the north by ESD 1 and the city limits of the City of San Antonio.
The agreement includes the following conditions:
ESD No. 11 cannot incur debt in excess of $20,000 without the consent of the City.
If the City annexes a portion of ESD No. 11, any contractual obligations of ESD No. 11 to, or the payment of any debt incurred by, a third-party contractor will not be a debt for purposes of Texas Health and Safety Code Section 775.002 unless City approved the contract creating the obligation or debt.
Any fire station constructed by ESD No. 11 will be located and constructed with the concurrence of the San Antonio Fire Department.
ESD No. 11 will ensure that its requirement is compatible with City's equipment.
ESD No. 11 will enter into mutual aid agreements.
The above imposed conditions were included on the ballot for the election to confirm the creation of ESD No. 11 and authorize the imposition of a tax.
In December 2016, ESD No. 11 contacted the City to request acceptance of ESD No. 11 securing debt of up to $3.5 million to provide for a new fire station. Representatives from the City, including SAFD, the Department of Planning and Community Development, and Government and Public Affairs, met with ESD No. 11 board members and consultants on January 23, 2017 to discuss the review. City Council approved ESD No. 11’s incurring debt on March 9, 2017 through resolution 2017-03-09-0012R.
In May of this year, ESD No. 11 approached the City of San Antonio to approve an additional $500,000 in debt for the purchased of needed equipment.
ISSUE:
ESD No. 11 requests the City's consent to secure debt of $500,000 to purchase firefighting equipment. The proposed debt will be structured for a 10-year term with an interest rate of 3.859%.
The City would not be required to assume any debt if the District defaults on the loan. However, if the City annexes territory within the District, it would be required to pay the District the pro-rata value of the District's bonded and other indebtedness for the annexed property. Pursuant to Sec. 775.022 of the Texas Health and Safety Code, the amount of compensation that the City must pay the District following annexation would be the District's total indebtedness at the time of annexation multiplied by a fraction equal to the assessed value of the property to be annexed, divided by the total assessed value of the property of the District based on the most recent certified county property tax rolls at the time of annexation.
The City's Finance, Planning, and Fire Departments reviewed ESD No. 11's request to analyze the District's capacity to incur the debt, probability of near term annexation within the ESD, and review under SAFD standards, respectively. The Finance Department determined that ESD No. 11’s tax base is sufficient to manage the additional debt. The Planning Department indicated that at this time the City has no planned annexation within ESD No. 11's boundaries. The proposed equipment meets or has no impact on SAFD's standards.
ALTERNATIVES:
The City could choose not to consent to the request to incur debt, which could negatively impact the District's ability to provide effective fire and emergency services.
FISCAL IMPACT:
The resolution would not have a fiscal impact on the City unless the City annexes property within ESD No. 11.
RECOMMENDATION:
City staff recommends providing consent to ESD No. 11 to incur debt of $500,000.