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Northlake staff propose Municipal Development District; council votes to place two MDD propositions on May ballot
Summary
Staff proposed dissolving two development corporations and creating an MDD funded by reallocated sales tax; council voted to call a special election to ask voters to create the MDD and abolish the CDC/EDC, and discussed ETJ inclusion and how to preserve volunteer engagement.
Town staff briefed council on a proposal to replace the Economic Development Corporation (EDC) and Community Development Corporation (CDC) with a Municipal Development District (MDD) funded by reallocated local sales tax and subject to voter approval. Nathan said the town currently funds two development corporations with a combined three‑eighths cent sales tax and that an MDD could be funded by up to one‑half cent, though the total local sales tax could not exceed 2 percent.
Nathan outlined a likely approach: dissolve the EDC and CDC, transfer their fund balances to the town, and reallocate up to a half‑cent to the MDD while moving a quarter‑cent into the town general fund (potentially to support roads or other priorities). He said the MDD could include the extraterritorial jurisdiction (ETJ) and allow board membership from ETJ residents, but the council could carve out special‑purpose areas such as the Belmont Freshwater Supply District.
Councilors asked whether the quarter‑cent moved to the general fund could instead be used to reduce the tax rate or be directed to specific projects; staff said those were policy decisions for council. Several councilors and residents raised concerns about preserving volunteer engagement from current boards if the EDC/CDC are dissolved. Nathan said obligations from existing agreements would remain and could be handled by interlocal agreement with the new MDD.
After discussion, council voted to call a special election to place two propositions before voters: Proposition A to create the MDD (including town limits and most of the ETJ) and Proposition B to abolish the EDC and CDC sales taxes and reallocate funds. The special election is scheduled to be held concurrently with the May 2 general election. Council also ordered the general election (council places 1, 2 and 3) and instructed staff on election logistics and legal limits on council advocacy around propositions.
Public commenters were mixed: Joel McGregor urged eliminating EDC/CDC sales taxes entirely to lower residents’ bills, while others asked how to retain long‑time volunteer organizers for town events if the boards are dissolved. Council directed staff to refine the district boundary proposals and return with finalized language and election ordinances.
