DEPARTMENT: Intergovernmental Relations
DEPARTMENT HEAD: Jeff Coyle
COUNCIL DISTRICT(S) IMPACTED: City Wide
SUBJECT: Consenting to Emergency Service District No. 10’s Request to Incur Debt
SUMMARY:
A resolution providing consent for Emergency Services District (ESD) No. 10 to incur debt of up to $7.545 million for a multi-year capital improvements plan. City consent to incur debt is required pursuant to the agreement terms between Bexar County and the City of San Antonio that created ESD No. 10 in 2008.
BACKGROUND:
On January 17, 2008, City Council approved, through ordinance #2008-01-17-0029, an agreement with Bexar County to allow the creation of Emergency Service District No. 10 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. 10 is located in eastern Bexar County and is generally described as bounded on the west and north by the city limits of San Antonio, on the east by FM 1604 and the city limits of St. Hedwig, and on the south by Macaway, Zigmont, and Real Roads, and the city limits of China Grove.
The agreement includes the following conditions:
• ESD No. 10 cannot incur debt in excess of $20,000 without the consent of the City.
• If the City annexes a portion of ESD No. 10, any contractual obligations of ESD No. 10 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. 10 will be located and constructed with the concurrence of the San Antonio Fire Department.
• ESD No. 10 will ensure that its requirement is compatible with City’s equipment.
• ESD No. 10 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. 10 and authorize the imposition of a tax; ESD No. 10 was approved by voters and currently imposes an ad valorem tax of $.10 per $100 of valuation on property owners within the District. Additionally, voters within the District approved the imposition of a sales and use tax in November 2017.
In May of 2018, ESD No. 10 submitted a request for the City to consider allowing the ESD to incur $7.545 million in debt.
ISSUE:
ESD No. 10 requests the City’s consent to secure debt of up to $7.545 million to provide for the execution of a capital improvement plan which includes the construction of a new fire station, renovation of two existing stations, and the purchase of apparatus’ and equipment to improve the service level provided by the ESD over the next five years. Given the continued growth in Bexar County the additional debt will provide for needed improvements and expansion for the operation of the District and to adequately protect the communities served by ESD No. 10.
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. 10’s request to analyze the District’s capacity to incur the debt, probability of near term annexation within the ESD, and compatibility of renovations and equipment to SAFD standards, respectively. The Finance Department reviewed the request to determine if ESD No. 10’s tax base is sufficient to manage the proposed debt. The Planning Department has no planned annexation within ESD No. 10’s boundaries at this time or the immediate future. The planned fire station will be located within Elmendorf’s city limits, not necessitating SAFD approval of building dimensions, and the SAFD coordinates with the ESD on equipment compatibility.
The City Council’s Intergovernmental Relations Committee approved this item for full Council consideration on August 7, 2018.
ALTERNATIVE:
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. 10.
RECOMMENDATION:
Staff recommends providing consent to ESD No. 10 to incur debt of up to $7.545 million.