GALVESTON, O, GALVESTON

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GALVESTON, O, GALVESTON
Prepared by Sue Darcy Knudson Associates
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WHAT DOES IT MEAN TO GROW TAX BASE?

• When a city takes pro-active steps to increase
  the value of the things it can tax, it is
  growing its tax base.
• This is important because the more value there is
  to tax, the lower the rate can be to generate the
  needed revenue.

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WHAT ARE ECONOMIC DEVELOPMENT TOOLS?

• Methods for cities to
• Grow tax base
• Create / retain jobs
• Manage / promote / constrain growth

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WHAT IS TAX BASE?

• Real Property
• Land
• Improvements
• Personal Property
• Office Equipment
• Inventory
• Retail Sales
• Franchise Fees

• EVERYTHING
• THE CITY
• CAN TAX
• TO GENERATE
• REVENUE

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TAX CALCULATIONS
VALUE x RATE REVENUE
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TAX MYTHS

• Cities pay for water and sewer from property
  taxes
• 2. If property is located in a city, the city
  must provide water and sewer

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WHAT DO PROPERTY TAXES PAY FOR?

• Police
• Fire / EMS
• Libraries
• Parks
• City Administration
• Maintenance on facilities, including streets

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SPECIAL DISTRICTS

• Special Districts are implementation tools to
  finance improvements that support development to
  advance the vision and accomplish the goals of
  the jurisdiction.

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SPECIAL DISTRICTS ARE IMPLEMENTATION TOOLS

• There are a number available in Texas
• Management Districts
• Municipal Utility Districts
• Public Improvement Districts
• Tax Increment Reinvestment Zones

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MANAGEMENT DISTRICTS

• Created by special act of legislature or the
  TNRCC.
• Property owners within the District are
  authorized to assess themselves for specific
  improvements, usually quality of life
  improvements related to beautification, security,
  and marketing.
• Regulated and monitored per legislation Chapter
  376 Local Govt. Code

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MUNICIPAL UTILITY DISTRICTS

• MUDs
• Created by provisions of the Water Code or
  Legislative Act to help finance the cost of
  development usually, but not necessarily, in
  unincorporated areas of a county.
• Districts are regulated and monitored by the
  TNRCC with limited oversight by Cities.

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PUBLIC IMPROVEMENT DISTRICTS

• PIDs
• Created by cities to enable an area to undertake
  improvements and equally distribute the
  associated costs among property owners benefiting
  from the improvements within the district.
• Regulated and monitored by the City Chapter 372
  Local Govt. Code

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TAX INCREMENT REINVESTMENT ZONES

• TIRZ
• Created by cities to help finance the cost of
  developing or redeveloping an area that would
  otherwise not attract significant private
  investment but for the Zone.
• Regulated and monitored by the City Chapter 311
  of the Tax Code

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Eligible Improvements
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Galvestons Tax Base
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Industrial Economic Base
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Islands Largest Employers

• UTMB 14,000
• American National Insurance 1,600
• GISD
• Galveston County
• Moody Gardens
• City of Galveston
• Landrys Resorts
• Texas AM
• U.S. Army Corps of Engineers

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Economic Challenges

• Approximately 50 of its land area is off the tax
  rolls (County, UTMB, City, Port, Corps of
  Engineers, Coast Guard, 501C(3))
• Dependent on sales tax for nearly 50 of annual
  budget
• Tax structure imposes a cap on the growth in the
  tax rate as well as a cap on revenue in general
  fund
• Suffers from aging, neglected infrastructure
• New FEMA regulations demand that all new
  development be raised 3-6 feet above current
  elevation

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Economic Development Policy

• Purpose
• Provide consistency of review
• Advise the development community of expectations
  and submittal requirements
• Articulate the circumstances under which the City
  will consider incentives

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Policy Goals

• Provide Middle Income Housing
• Encourage New Industry and Employment
• Promote Development Friendly Atmosphere
• Leverage Private Sector Investment
• Maximize the Citys Tax Base

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Evaluation Criteria

• Developer / Applicant Information
• Development Impact
• Economic
• Environmental
• Public Infrastructure and Services
• Fiscal
• Furtherance of City Goals
• Innovation / Special Considerations

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QUESTIONS ANSWERS

• Thank you for having me!