The District has entered into development financing agreements with Developers. The agreements call for the Developers to fund costs associated with water and sewer facilities, and utilities construction until such time as the District can sell bonds to reimburse them. Friendswood Development (aka Lennar...aka Brunswick Meadows) has been requesting reimbursement for the past year to cover the infrastructure that they have built since the last bonds were issued in 2008. The District owes over $9 million to them, and interest is building on the debt (about $410,000/year).
AK and I have tried to get the Board to move on issuing bonds since last year to pay them what we owe. The fact is that we must pay our debts. The other fact is that the way we pay our debts is by setting our tax rate at a level to cover the bonds issued.
AK and I have continuously advocated raising the tax rate and you can read why here. Although the majority was willing to raise your water rates twice in the past 3 years, they have been reluctant to ever raise the tax rate. In 2003, when Brunswick Lakes and Brunswick Meadows started selling houses, the tax rate was $1.50 per $100 of property valuation. This means if your house was valued at $100,000 you paid $1500 in taxes to WCID #89. Since 2003, the tax rate steadily fell as the Brunswick neighborhoods kept expanding the tax base. That was, until the economy went belly up.
The value of our homesteads decreased by 11% between 2008 and 2009. This depreciation wiped out an entire year of growth in the tax base. In 2010, the District's financial adviser stated we should raise the tax rate to $1.44 and you can read about that here. The Board chose to ignore that advice and set the rate at $1.39, and the majority from Morningside has dug in their heels about raising it again.
The tax rate is made up of two parts: the debt service tax rate and the O&M (Operations & Maintenance) tax rate. The O&M taxes are used to provide services that are not covered by the revenue generated through the water bills. The debt service taxes are to pay off all the bonds that have been issued for Developers and the new construction projects (like the new sewage treatment plant, the new water plant in Brunswick Meadows, and yes, that ridiculously expensive Adminstration Building). Here's the facts for the tax rate for 2012.
We need to set a debt service rate of $1.26 (last year's rate was $1) and reduce the O&M tax rate to 24 cents (last year's was 39 cents) for a total of $1.50 tax rate - the same rate that was active when Brunswick neighborhoods first started selling houses. The $1.50 tax rate will not raise the amount of dollars that the average taxpayer pays the District, compared to last year, despite the increase of the overall tax rate by 11 cents. How is that possible you ask?
The values of our homes have decreased dramatically over the past 5 years. The average homestead was valued at $107,167 in 2006 and in 2012 it is only $85,070. Therefore, in 2006, when the tax rate was $1.43, the average dollar amount paid in property taxes by homeowners was $1,532 but in 2012 the dollar amount paid will be just $1,276 -- even though the tax rate will be $1.50!
At the $1.50 tax rate, we will be able to afford to issue approximately $4.5 million in bonds to pay the Developer. That is about half of what we owe, but shows good faith on our part. This is why I am in favor of raising the tax rate.
AK and I have tried to get the Board to move on issuing bonds since last year to pay them what we owe. The fact is that we must pay our debts. The other fact is that the way we pay our debts is by setting our tax rate at a level to cover the bonds issued.
AK and I have continuously advocated raising the tax rate and you can read why here. Although the majority was willing to raise your water rates twice in the past 3 years, they have been reluctant to ever raise the tax rate. In 2003, when Brunswick Lakes and Brunswick Meadows started selling houses, the tax rate was $1.50 per $100 of property valuation. This means if your house was valued at $100,000 you paid $1500 in taxes to WCID #89. Since 2003, the tax rate steadily fell as the Brunswick neighborhoods kept expanding the tax base. That was, until the economy went belly up.
The value of our homesteads decreased by 11% between 2008 and 2009. This depreciation wiped out an entire year of growth in the tax base. In 2010, the District's financial adviser stated we should raise the tax rate to $1.44 and you can read about that here. The Board chose to ignore that advice and set the rate at $1.39, and the majority from Morningside has dug in their heels about raising it again.
The tax rate is made up of two parts: the debt service tax rate and the O&M (Operations & Maintenance) tax rate. The O&M taxes are used to provide services that are not covered by the revenue generated through the water bills. The debt service taxes are to pay off all the bonds that have been issued for Developers and the new construction projects (like the new sewage treatment plant, the new water plant in Brunswick Meadows, and yes, that ridiculously expensive Adminstration Building). Here's the facts for the tax rate for 2012.
We need to set a debt service rate of $1.26 (last year's rate was $1) and reduce the O&M tax rate to 24 cents (last year's was 39 cents) for a total of $1.50 tax rate - the same rate that was active when Brunswick neighborhoods first started selling houses. The $1.50 tax rate will not raise the amount of dollars that the average taxpayer pays the District, compared to last year, despite the increase of the overall tax rate by 11 cents. How is that possible you ask?
The values of our homes have decreased dramatically over the past 5 years. The average homestead was valued at $107,167 in 2006 and in 2012 it is only $85,070. Therefore, in 2006, when the tax rate was $1.43, the average dollar amount paid in property taxes by homeowners was $1,532 but in 2012 the dollar amount paid will be just $1,276 -- even though the tax rate will be $1.50!
At the $1.50 tax rate, we will be able to afford to issue approximately $4.5 million in bonds to pay the Developer. That is about half of what we owe, but shows good faith on our part. This is why I am in favor of raising the tax rate.
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