Utility Debt Service Fee-Twin Creeks & Bella Vista

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FAQs

If you live in Twin Creeks or Bella Vista, you may have noticed a Utility Debt Service fee on your monthly Water Utility statement. This fee is related to the annexation of these neighborhoods that took place in December of 2014. Twin Creeks and Bella Vista were previously located in Water Control and Improvement Districts (WCIDs) or Municipal Utility Districts (MUDs), which had pre-existing debt that was absorbed by the City upon annexation. This type of debt is not typically paid by the City for other residential developments within the City and is not serviced under the uniform tax rate, so in order to service this assumed debt the City imposes a Debt Service Fee to residents of Twin Creeks and Bella Vista for a term not to exceed 15 years. Further information is detailed below. For additional questions related to this fee, please contact Utility Billing at 512-401-5300 or utilitybilling@cedarparktexas.gov.

Background
The City Council voted on December 11, 2014 to annex Twin Creeks (WCID 1F & 1G) and Bella Vista (Bella Vista MUD) under a voluntary full-purpose annexation, effective December 22, 2014. Residents received informational packets in the mail regarding the annexation and city services. You can read an electronic version of the packet here.

Below are some frequently asked questions with links to answers about the reasons for the annexation and the process leading up to it.  Click on each link to find a detailed explanation in response to each question. 

See annexation maps here:
Twin Creeks WCID 1F & 1G
Bella Vista MUD

FAQs about the Twin Creeks - Bella Vista Annexation:
What is this all about?
What is the Utility Debt Service Fee on my monthly water bill?
How does annexation impact my local property taxes?
Why does each District pay a different monthly fee?
What governmental entities will I be part of?
Am I eligible for a “Senior Tax Freeze”?

FAQ’s about Annexation:

What is this all about?
This is a full purpose voluntary annexation of the Twin Creeks Water Control and Improvement Districts 1F and 1G, and Bella Vista Municipal Utility District (“Districts”) by the City of Cedar Park.

In 2011, Emergency Services District #14 (ESD #14) cancelled their fire service contract with the City of Cedar Park. Following that, residents of Twin Creeks and Bella Vista approached the City of Cedar Park about providing Cedar Park Fire Department fire and first responder services. The City of Cedar Park worked with the Districts to develop a means for annexation that provides residents with the services they want. 

What is the Utility Debt Service Fee on my monthly water bill?
Each of the Districts incurred substantial debt related to the developer’s installation of water and wastewater infrastructure; this debt was paid for by each District with its tax revenues. This debt was assumed by the City upon full purpose annexation; however, this type of debt is not typically paid by the City for other residential developments within the City and is not be serviced under the City’s uniform tax rate. In order to service this assumed debt for each District, the City imposes a Utility Debt Service Fee to residents of Twin Creeks and Bella Vista for a term not to exceed 15 years. The fee is assessed monthly on their water bill. The fee is based on each Districts’ individual debt level (see Exhibit A).

Exhibit A: Monthly Fee Based on Individual District Debt

District

Monthly Fee

(per residential unit or equivalent)

Annual Total (Monthly Fee x 12)

Term Not to Exceed 15 Years

Twin Creeks 1F

$22

$264

Twin Creeks 1G

$44

$528

Bella Vista

$22.50

$270


How does this annexation impact my local property taxes?
Prior to the annexation, residents paid local property taxes to several entities including their District, Emergency Services District #14, Travis County, Leander I.S.D., and the Travis County Health District. This annexation would eliminate the taxes levied by the District and Emergency Services District #14. Now, annexed residents pay the City’s tax rate, which is lower than the Districts’ rate (at the time of the annexation). Although cost savings were projected for the average home value within the Districts, the primary goal of this proposed annexation was to identify a means for residents to become a part of the City of Cedar Park and receive critical services and rights of citizenship.

This annexation does not impact the taxing jurisdiction of Travis County, Leander I.S.D., and the Travis County Health District. Despite the fee described in in the previous question and Exhibit A, many residents see an overall decrease in their annual property taxes going to local government.

Exhibit B: Detailed Property Tax Impact & Savings

Comparison of District & ESD Taxes & Monthly Admin Fee to City Taxes & Utility Debt Service Fee
Bella Vista MUD / Williamson Travis Counties WC&ID 1F / Williamson Travis Counties WC&ID No. 1G

*Excludes taxes paid to Travis County, Leander ISD, and Travis County Health District

Twin Creeks WCID 1F 

current (PRE Annexation)

PROPOSED Full Purpose Annexation

(POST Annexation)

2013 Avg. Home Value $422,215 

2013 District Tax Rate** $0.9000   FY 2015 City Tax Rate*** $0.48500
 Fire District* $0.10      
 Total $1.0000    Total $0.48500
         
2013 Average Tax Bill  $ 4,222   2015 Average Tax Bill $2,048
Plus: Monthly Administrative Fee on Utility Bill ($5/month) $      60   Plus: Monthly Utility Debt Service Fee ($22/month; term of 15 years) $   264
Total $ 4,282   Total $2,312

Estimated Annual Average Savings: $ 1,970

*This does not include the increase to the Fire District tax that was at the time of the annexation under consideration by the ESD. This tax rate, approved by voters, may have increased up to $0.03.
**All tax rates are calculated per $100 of home valuation.
***These figures were based on FY 2015 information that was available following the annexation in 2014.  The City's tax rate for FY 2016 is now $.04795.

Actual savings vary from property to property. You are encouraged to calculate your own financial impact given the above numbers.

Comparison of District & ESD Taxes & Monthly Admin Fee to City Taxes & Utility Debt Service Fee
Bella Vista MUD / Williamson Travis Counties WC&ID 1F / Williamson Travis Counties WC&ID No. 1G

*Excludes taxes paid to Travis County, Leander ISD, and Travis County Health District

Twin Creeks WCID 1G

current (PRE Annexation)

PROPOSED Full Purpose Annexation

(POST Annexation)

2013 Avg. Home Value $328,046

2013 District Tax Rate** $0.5401   FY 2015 City Tax Rate*** $0.48500
 Fire District* $0.10      
 Total $0.6401    Total $0.48500
         
2013 Average Tax Bill  $ 2,100   2015 Average Tax Bill $1,591
Plus: Monthly Administrative Fee on Utility Bill ($5/month) $      60   Plus: Monthly Utility Debt Service Fee ($44/month; term of 15 years) $   528
Total $ 2,160   Total $2,119

Estimated Annual Average Savings: $41

*This does not include the increase to the Fire District tax that was at the time of the annexation under consideration by the ESD. This tax rate, approved by voters, may have increased up to $0.03.
**All tax rates are calculated per $100 of home valuation.
***These figures were based on FY 2015 information that was available following the annexation in 2014. The City's tax rate for FY 2016 is now $.04795.

Actual savings will vary from property to property. You are encouraged to calculate your own financial impact given the above numbers.

Comparison of District & ESD Taxes & Monthly Admin Fee to City Taxes & Utility Debt Service Fee
Bella Vista MUD / Williamson Travis Counties WC&ID 1F / Williamson Travis Counties WC&ID No. 1G

*Excludes taxes paid to Travis County, Leander ISD, and Travis County Health District

Bella Vista MUD

current (PRE Annexation)

PROPOSED Full Purpose Annexation

(POST Annexation)

2013 Avg. Home Value $339,380

2013 District Tax Rate** $0.5042   FY 2015 City Tax Rate*** $0.48500
 Fire District* $0.10      
 Total $0.6042    Total $0.48500
         
2013 Average Tax Bill  $ 2,051   2015 Average Tax Bill $1,646
Plus: Monthly Administrative Fee on Utility Bill ($5/month) $      60   Plus: Monthly Utility Debt Service Fee ($22.50/month; term of 15 years) $   270
Total $ 2,111   Total $1,916

Estimated Annual Average Savings: $195

*This does not include the increase to the Fire District tax that was at the time of the annexation under consideration by the ESD. This tax rate, approved by voters, may have increased up to $0.03.
**All tax rates are calculated per $100 of home valuation.
***These figures were based on FY 2015 information that was available following the annexation in 2014. The City's tax rate for FY 2016 is now $.04795.

Actual savings will vary from property to property. You are encouraged to calculate your own financial impact given the above numbers.
  
Why does each District pay a different monthly fee?
The monthly fee is based on each individual District’s debt for water and wastewater utility infrastructure installed by the developer for the subdivision. In these Districts, unlike in the City, developers are reimbursed by the District for these infrastructure costs through bonds issued by the District. Upon annexation by the City, the City must take over payments on these bonds which is not done for subdivisions built by developers in the City limits. The fee is different in each District because the amount of debt on this utility infrastructure is different in each district. For example, the reason the fee is higher in 1G than in 1F or Bella Vista is because 1G has approximately triple the amount of outstanding debt as the other districts; this is probably due to the way in which the original developer allocated the cost of infrastructure improvements within the districts.

What governmental entities will I be part of? 
After annexation in 2014 residents became residents of the City of Cedar Park and Travis County. Travis County taxes will not change as a result of this annexation. 

Am I eligible for a “Senior Tax Freeze”?
Under the City’s tax rate, residents over the age of 65 may be eligible for a “Seniors Tax Freeze.” Under this, the levy is frozen at age 65 and older. In other words, the dollar amount a homeowner over the age of 65 pays towards their local property tax will remain steady regardless of tax rate or home valuation changes. In order for a homeowner to be eligible for this in Travis County (therefore served by Travis County Appraisal District), they must be over 65 and submit paperwork to TCAD requesting the freeze. This would go into effect the tax year after paperwork is filed and it is approved. For example, if I was approved for the freeze today, I would pay the bill that will be sent this year as it is and then in future years, my payment will match this year’s payment*. *The payments may change if the levy would decrease and it would reset to the lowered amount or could increase if improvements are added and the improvements would require a year to freeze amounts.