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R2019-176 2019-07-22RESOLUTION NO. R2019-110 A Resolution of the City Council of the City of Pearland, Texas, adopting and implementing a Rebate Policy for municipal utility districts located within the incorporated limits of the City. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain Rebate Policy for municipal utility districts located within the incorporated limits of the City, a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. PASSED, APPROVED and ADOPTED this the 22nd day of July, A.D., 2019. ►U; 'VJ® ATTEST: MARIA RODRIGUEZ INTERIM CITY SECRETARY APPROVED AS TO FORM: DARRIN M. COKE CITY ATTORNEY TOM REID MAYOR Purpose "Exhibit A" to Resolution R2019 -176 Rebate Policy: In-City Muds (DRAFT) To document the Finance Department's implementation and management of policy and procedures related to the practice of providing rebates of City taxes and/or reimbursements to In-City Municipal Utility Districts located within the City of Pearland's ("City") corporate boundaries. Definitions o In-City Municipal Utility District or In-City MUD. A political subdivision of the State of Texas authorized by the Texas Commission of Environmental Quality (TCEQ) to provide water, sewage, drainage and other utility-related services within the MUD boundaries, located within the City limits, and subject to specific consent requirements of the City. o Overlapping Services. Basic City services that have been funded with revenue from taxpayers subject to multiple taxing authorities, in duplicate or multiple ways. o Rebate. For the purpose of this policy, a refund to an In-City MUD, generally based on a per cent portion of every $100 of taxable value. o Reimbursement. For the purpose of this policy, a payment or partial refund for actual costs incurred. Discussion The City has traditionally provided rebates in the amount of 15 cents, later reduced to 10 cents, per $100 of appraised taxable values for each in-City MUD at the onset of their formations. In addition to incentivizing development, the impetus for these rebates was to facilitate the build­ out of the public infrastructure system needed for the territory to develop, residentially and/or commercially, in a timeframe that does not coincide with the City's timeline for construction of these types of capital improvements. Staff analyses of local development, MUD financial management policies, taxation, debt authorizations, issuances and service schedules, valuation and rebates, conclude that the proper course of action for the City is to end this rebate program. Policy 1.All future Utility Agreements, amendments to such agreements, and/or other contracts between the City and In-City MUDs shall not contain any terms or conditions that provide Rebates to In-City MUDs. 2.No Rebate shall be offered or extended, transferred or paid to any in-City MUD In-City MUDs may request, via application, Reimbursement for the costs of overlapping tax supported services in accordance with Chapter 54 of the Texas Water Codei and/or Texas Administrative Code §293.11 (d)(8f "Exhibit A" to Resolution R2019 -176 Rebate Policy: In-City Muds (DRAFT) 3.The existing Utility Agreements that constitute payments in the form of rebates to in-City MUDs will be honored, but with the City's allocation coming from the Enterprise Fund, as opposed to the City's Debt Service Fund. Application This policy shall be considered applicable interdepartmentally; specifically, all departments involved in the creation and implementation of Utility Agreements with In-City MUDs. Joint-Administration The Finance Department, with Legal and City Administration, shall cooperatively administer, monitor and enforce this policy. i " ... for districts proposed to be created within the corporate boundaries of a municipality, evidence that the city will rebate to the district an equitable portion of city taxes to be derived from the residents of the area proposed to be included in the district, if such taxes are used by the city to finance elsewhere in the city, services of the type the district proposes to provide, If like services are not to be provided, then an agreement regarding a rebate of city taxes is not necessary." ii "[f]or a MUD to be created within a city's corporate limits, ... the city agrees to rebate the MUD 'an equitable portion of the city taxes,, , if such taxes are used by the city to finance elsewhere in the city, services of the type the district proposes to provide'."