Farmersville voters will be asked to approve the formation of a municipal development district (MDD) and repeal the current Type 4B Economic Development Corporation (EDC) on the May 6 special election ballot.
The existing Type 4A EDC will remain in place and not be affected by the election.
Currently, the city generates one-half of 1% sales tax for Type B purposes which can also be done through an MDD. However, the MDD proposed also includes an area known as the extraterritorial jurisdiction (ETJ) which extends one mile beyond the city limits.
The proposed change does not create a new tax, in terms of dollars, for those businesses within the city proper of Farmersville.
It would create an additional tax base, however, by taxing sales on products sold by businesses located in the ETJ.
City officials indicate there are not many current businesses that will be affected, however with future growth in the ETJ the mechanisms will be in place to generate additional revenue, if approved by voters.
According to Mayor Bryon Wiebold, there are several other advantages of a MDD compared to the existing 4B.
Advantages include the ability of the MDD to accept grants, buy and sell property without council approval, employ personnel, contract with individuals and service providers and fund projects within the MDD.
“Since the MDD board is a self-governing body, action can be taken faster and the turnaround time for project completion can be very efficient,” Wiebold said.
City council would appoint the membership of the five-member MDD, comprised of three members residing within the city and two within the ETJ.
The topic of MDD formation and its benefits has been studied for about a year and a half by the Farmersville City Council through multiple workshops and presentations.
City Manager Ben White has determined that approximately 1,000 municipalities have approved MDD’s throughout the state and sees the upward trend continuing.
The closest cities with MDD’s in which Farmersville studied included Fate and Murphy.
When asked about the configuration proposed, White explained that “4A cannot do what 4B does, but a MDD can do what a 4B does with greater possibilities of increased revenue.”
White also commented that 4A will continue to exist but have a more specific focus and be able to do their main job more effectively with the passage of the MDD.
An approved MDD also allows the city to provide additional services and fund projects located in the ETJ, such as infrastructure improvements, as well as generate funding for city projects from a wider tax base.
City officials cite this increased flexibility in funding as a benefit to both the city and ETJ, which is not currently available with 4B.
Early Voting began Monday, April 24 in advance of the May 6 election where residents will be asked to vote on two propositions in order for the issue to pass successfully.
Voters must pass one proposition for the creation of the MDD and another proposition to repeal the current 4B program.
Successful passage of MDD formation is contingent upon both measures passing at the polls.
Both Wiebold and White agree the proposal is not a drastic additional tax but a restructuring of the tax revenue system that benefits the community for future growth.
By Cole McClendon • [email protected]
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