HomeMy WebLinkAboutIR 8254 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 82.54
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of > jQ To the Mayor and Members of the City Council June 13, 2000
* rtxws * Subject: Debts and Assets of Tarrant County Municipal Utility District No. 1
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The purpose of this report is to advise the City Council of outstanding debts and available funds
of the farmer Tarrant County Municipal Utility District No. 1 ("MUD").
The City of Fort Worth annexed all territory within the MUD on January 4, 2000. The MUD
was abolished as of 11:59 p.m. on that date. At that time the City took over all assets of the
MUD and assumed all debts and obligations of the MUD.
The audited financial statements of January 4, 2000, provided sufficient cash to pay all current
liabilities incurred as of the close of business. Currently, the City of Fort Worth has $791,795, to
apply to the future obligations of the MUD. The cash exists in the following accounts: Debt
Service ($137,081), Capital Improvements ($354,508), Rate Stabilization ($207,290), and
undesignated cash of $92,916. The outstanding future obligations of the MUD consist of Debt
Service due in 2001 ($574,840) and 2002 ($615,000).
There is sufficient cash from MUD assets on hand to pay debt service payments due in 2001 in
the amount of$574,840. The balance of$216,955 will be sufficient to refund $120,000 to the
Capital Projects Reserve Fund in accordance with M & C C-17814.
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On January 4, 2000, the City Council approved M & C C-17814 approving an agreement with
the Eagle Mountain Volunteer Fire Department for purchase of equipment for $90,000 and
acquisition of all rights of the Eagle Mountain Volunteer Fire Department in the fire station
located at 8510 Spring Street for $30,000. Funds in the amount of $120,000 were transferred
from the Capital Projects Reserve Fund to the Specially Funded Capital Projects Fund. The City
Council directed that a refund in the amount of$120,000 be made to the Capital Projects Reserve
Fund after the audit of the MUD is completed and assets are transferred to the City.
It is recommended that the balance of$96,955 be used for other obligations relating to the MUD.
The final debt service payments totaling $615,000 will be due in 2002 and will be incorporated
into the Water and Wastewater Fund's total debt service. This payment will retire all MUD bond
debt.
Under state law, the City is prohibited from assessing City property taxes against residents of the
former MUD because the annexation occurred after January 1, 2000. The City will assess
property taxes at the same rate assessed other residents of the City commencing in 2001.
The MUD was authorized to assess property taxes against the MUD residents. It assessed taxes
at the rate of$0.2054 per $100 valuation in 1999 in order to pay debt service on bonds issued by
the.MUD for construction of water, sewer and drainage infrastructure. It is staff's position that
when the MUD was abolished on January 4, 2000, the City became authorized to perform all
functions of the MUD, including assessment of taxes. However, citizens in the area have
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ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS
asserted that City representatives assured them during the annexation process that the City would
assess no taxes in 2000.
Based on preliminary assessed values for the 2000 tax year for property in the former MUD and
a tax rate of $0.885 for $100 valuation, it is anticipated that the City will collect at least
$2,764,441 in property taxes from property within the former MUD in 2 00 1.
It is the City Manager's recommendation not to assess property taxes against property formerly
located in the MUD this year and to use cash on hand for payment of 2001 bond debt payments.
Unless otherwise directed by City Council, the Staff will inform interested parties of this
decision.
652-Bob Terrell
City Manager
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CITY OF FORT `!NORTH