HUTTO — Questions about amending a sales-tax sharing agreement between the city and Emergency Services District No. 3 sparked heated words from a fire chief during a recent City Council meeting.
City leaders quickly assured Chief Scott Kirwood the agenda item for ESD No. 3, also known as Hutto Fire Rescue, was not about canceling the agreement nor asking for a larger portion of the taxes but about timing.
After a subsequent closeddoor meeting with Economic Development Director Cheney Gamboa and the city attorney, the City Council Jan. 9 directed staff to submit a recommended amendment to the current agreement to the ESD’s board for review and approval.
Kirwood’s ire initially was provoked because he said the ESD was not notified the sales-tax sharing agreement between the city and the Williamson County agency was slated for executive session or behind closed doors.
“The ESD was surprised and concerned that there is an agenda item to talk about the shared sales tax between the ESD and the city. True community partners would have notified us that this was going on,” Kirwood told the council. “The ESD is also concerned that the sales-tax agreement is being talked about in executive session. There is nothing in this agreement that needs to be done behind closed doors.”
ESDs are political subdivisions of the county which serve areas that are outside city limits and/or unserved by a municipal fire department. Hutto Fire Rescue is funded in part by property taxes and in part by a voter-approved sales tax on businesses in Hutto’s extraterritorial jurisdiction.
The agenda topic was simply listed as an amendment, leading to Kirwood’s questioning of the leaders on the dais.
“There is no law that requires the ESD to share sales tax with you,” the chief said. “The ESD is doing this because it sees the benefit for the ESD and the city. It makes the ESD question whether partnership and these agreements are still the right thing,” The ESD first asked voters to approve a sales tax in 2016, and the current sales-tax sharing agreement was signed in 2024 with an expiration in 2034.
“What if a deal that we give outlives the agreement? We could be in trouble. We want to bring a (large industry) in and we give them a 30-year deal and this ESD deal only lasts 10 years — we can’t over-commit what our current agreement says,” said Mayor Pro Tem Peter Gordon.
Gamboa has been working with Kirwood for several months to discuss the contract, and she said the executive session was intended in part for her to update the council and receive guidance, due in part to a new development agreement the council is working on for an unnamed project.
“That was the impetus for the additional engagement with ESD No. 3 and their leadership team, to discuss what those possibilities would look like, how we could accommodate those existing agreements or potential future agreements to ensure that ... we are able to execute and fulfill those incentive agreements with those properties that would be also impacted by the sales-tax sharing agreement,” Gamboa said.
Mayor Mike Snyder told Kirwood council members sign nondisclosure agreements with larger developers, which necessitates closed-door meetings.
The mayor acknowledged communication between the council and the chief could have been better but also admonished Kirwood for not reaching out to him or other council members regarding the chief’s concerns about the executive session posting.
Adding fuel to the fire is the possibility the 89th Legislature — which convened Tuesday — will make a ruling on salestax sharing between cities and ESDs.
The council and other cities in the Texas Municipal League have approved a resolution supporting a potential law mandating ESDs share sales tax collected from a city’s ETJ.
Kirwood said the ESD will strive to stop any such legislation.
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“There is no law that requires the ESD to share sales tax with you.”
— Chief Scott Kirwood, ESD No. 3
