City of Big Spring considering election on Municipal Development District

BIG SPRING, Tx. (KOSA) - - The City of Big Spring is considering an election to create a Municipal Development District.

The decision on whether or not to hold the election will be made in Friday's special city council meeting.

The following comes from Mayor Shannon Thomason:

On Tuesday, after receiving information from the Texas Comptroller and in consultation with the City Attorney, I directed City Staff to schedule a special meeting of the Big Spring City Council to consider placing a ballot item on the May 2, 2020 election ballot to create a “Municipal Development District” (MDD) in the City of Big Spring’s “extraterritorial jurisdiction” (ETJ).

The State of Texas sets the ETJ as an area extending out from the city limits to a distance of two (2) miles.

The creation of an MDD in this area would be decided by a vote of the residents of the ETJ. Residents living in the city limits would NOT be able to vote on the creation of the MDD. The Big Spring EDC would be unaffected should the MDD ballot referendum pass or fail.

A Municipal Development District is a form of Economic Development Corporation. A MDD can undertake the same type of projects as a “Type B” EDC. One of those project types is for establishing water supply projects, with voter approval. A MDD can ONLY undertake projects located in the District, for the benefit of the District.

The MDD would be funded by a half cent sales tax increase on taxable sales occurring in the ETJ area. This is identical to the sales tax collected on sales inside the city limits that is used to fund the Big Spring EDC. This amounts to a slightly higher sales tax rate in the ETJ of 6.75%, as compared to the current 6.25%. In other words, it generates one penny more in sales tax for every $2 sale. This slight increase in sales tax would have NO effect on property tax rates in either the City or the ETJ.

The intent of empowering the voters of the ETJ to make this decision is simple: the fund would be primarily used to develop water supply line infrastructure projects from the Big Spring city limits out to areas planned for future annexation by the City. The MDD fund would eliminate the need to borrow money through bond issuances, loans, or Certificates of Obligation and would preclude any need for increases in property taxes to fund the principle or interest involved in borrowing money.

The need for a special session of the Big Spring City Council to consider placing the creation of the MDD on the May 2, 2020 election arose on Monday when, during a Howard County Commissioner’s Court budget workshop session, the Commissioners began considering the creation of a County Assistance District. Such a District would cover all unincorporated areas of the county and would extend to the city limits of Big Spring. The adoption of a County Assistance District would prevent any future consideration of creating an MDD, because it would set the sales tax rate in the county to the maximum rate allowed by the State of Texas. As such, it was decided to discuss giving the residents of the City of Big Spring’s extraterritorial jurisdiction the option to decide for themselves whether or not to create a Municipal Development District while there was still an opportunity for them do do so. The agenda item is set as an emergency item due to the fact that the deadline for setting the creation of an MDD on the May 2, 2020 ballot is Friday.

The special meeting of the Big Spring City Council is set for Friday, February 14, 2020 at 3:00pm in the Big Spring City Council Chambers. If approved by the Council for placement on the May ballot, residents of the City’s ETJ may vote for or against the creation of an MDD at any voting center in Howard County on Election Day (Saturday, May 2, 2020) or at the Howard County Courthouse during early voting.