Brazoria County Pearland TX Texas Politics

Council approves ESD elections with potential high cost to Pearland taxpayers

Pearland, TX — An unusual site for Pearland’s city council chambers, nearly every seat in the room was occupied with residents, many of whom showed up to voice their support of proposed Emergency Service Districts 4 & 5 (ESD4 & ESD5).  ESDs are special districts wherein a tax is collected to pay for emergency services including police, fire, and EMS. ESDs are restricted, by current state law, on how much they can collect which is currently set at 10¢ per $100 valuation. The city of Pearland has been providing these services to unincorporated areas for several decades at a cost of nearly $2.1 million per year.

ESD 4 received an unanimous 7-0 vote which would serve all of Pearland’s extraterritorial jurisdiction (ETJ) which lies just beyond the city limits with the exception of the Silverlake neighborhood. ESD 5, a much smaller area, passed with a 5-2 vote which would serve the Silverlake neighborhood and the areas currently served by Brazoria county Municipal Utility Districts 2 and 3 (MUD 2 & MUD 3). Approval by council means both of these ESDs will be on the November ballot for voter approval.

Documents provided by the city of Pearland state that ESD 4 could potentially collect approximately $850,000 in revenue based on the statutory maximum. Similarly, ESD 5 could potentially collect approximately $614,000. City officials stated that Pearland taxpayers are currently wholly subsidizing these services. The collection of the maximum rate from all households in the two proposed ESDs would still leave Pearland taxpayers subsidizing these areas to the annual tune of nearly $650,000.

In the case of ESD 4, those residents’ only viable option was to form the ESD and contribute as much as they can. Though still leaving a stark deficit between what’s collected and what’s spent by the city to provide services, city officials seemed to approach this agenda item from an angle of something is better than nothing.

Dax Philbin, attorney for Brazoria county MUDs 2 and 3.

The main event of the evening, however, was the approval by council to move forward with the creation of ESD 5. Attorney for MUDs 2 and 3, Dax Philbin, stated, “City [of Pearland] staff has attended our meetings of MUDs 2 and 3 since March [2018] to the present and they have asked us to negotiate in good faith with them and either contract with them directly for fire and EMS or join another existing ESD such as ESD #3 or create our own ESD. They have stated that they would work with us in good faith until such time as we could accomplish this.” Philbin continued to provide his rationale for recommending the creation of ESD 5 because, “Our neighborhood [Silverlake] brings the most taxable value.”

Several of the councilmembers responded with their critiques on the decision made by MUDs 2 and 3 to proceed with the creation of ESD 5. Pearland Councilmember Derrick Reed cautioned Silverlake residents, “I encourage you to educate yourselves on what you’re doing.” By creating ESD 5, city officials warned, residents would be creating yet another layer of government to fulfill a purpose which could feasibly be fulfilled by the existing MUDs. What’s important to note is that if the MUDs decided to contract with the city of Pearland directly, they would not be subject to the maximum rate of 10¢ per $100 in valuation like the ESD would be. The residents could, through their existing MUDs, pay the entirety of the costs associated with the services provided to them by the city of Pearland.

Pearland Councilmember Adrian Hernandez opined, “…if ESD 5 was part of ESD 4, the 10¢ cap would be our option and I think that’d be a reasonable option but because it’s (Silverlake) given us several different potentials for revenue, and the 10¢ cap is maybe not the best, we have the potential to close the gap entirely. I think, at least, my duty to the people who elected me, as far as I see it, would be to try and find a way to close that gap entirely to remove that subsidy off the backs of the Pearland taxpayers.”

To further make the case, Pearland Councilmember Trent Perez added, “There is no other city that does this [provides free emergency services to non-taxpayers] that I’m aware of – not a single one.” According to Perez, the city of Pearland has been subsidizing the Silverlake neighborhood residents, along with other members of Pearland’s ETJ, for multiple decades in the hopes that they would one day be annexed and become taxpayers themselves. City officials also cited that ESDs can accumulate their own debt and have administrative overhead which doesn’t guarantee that the full amount collected will go to the city of Pearland in the end. For example, similar ESDs in Brazoria county have salaries on their books in excess of $100,000. This could potentially reduce the amounts paid by ESDs and place additional burden on Pearland taxpayers.

Last year, however, the state of Texas passed a law which restricts cities from exercising their right to annex without meeting strict regulatory burdens which make the process extremely difficult. This was, according to city officials, the catalyst for the proposed creation of ESD 4 in order to pay back the city some of the money it had been paying to provide services to these areas outside the city limits, a situation Councilmember Perez stated was extremely uncommon.

In the end, however, only two councilmembers, Perez and Hernandez, voted in opposition to the creation of ESD 5 which would have potentially saved Pearland taxpayers several hundreds of thousands of dollars per year and put the responsibility on the MUDs to contract with the city for the full amount due. If the creation of both ESD 4 and ESD 5 passes on the November ballot, Pearland taxpayers will be potentially subsidizing their unincorporated neighbors, including areas stretching from West of 288 all the way to the Pearland Regional Airport and including Silverlake, to the tune of nearly three-quarters of $1 million dollars per year – an amount that would close many gaps in the city’s current budget shortfalls for 2019.

To view the hearing in its entirety, please click here to navigate to the City of Pearland’s site to access the video archive.

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