ESD #6 – Frequently Asked Questions (FAQ)
Q: What is an ESD?
A: An Emergency Services District is a political subdivision of the State of Texas, similar to a School District, Library District or Hospital District.
Q: What does an ESD do?
A: Depending on the ESD’s creation documents, an ESD can provide fire protection, emergency medical services or both.
Q: How are ESDs created?
A: ESDs are crated through a “grassroots” effort:
A petition signed by at least 100 voters in the proposed district must be presented to the County Commissioners Court in the county (or counties) in which the ESD is intended to exist.
If the ESD is deemed feasible and necessary by the Commissioners Court, an election is called in which the voters in the proposed District must elect to create the District.
If a majority of the votes are cast in favor of creation, the District is created.
Q: How are ESDs governed?
A: A board of five commissioners governs ESDs. In most counties in Texas, the County Commissioners Court appoints the commissioners to two-year terms. Commissioners are elected for ESDs in Harris, Orange, and Smith counties, as well as for ESDs that exist in more than one county.
Q: So ESDs are an extension or department of the county’s government?
A: No, they are an independent governmental entity.
Q: How are ESDs funded?
A: ESDs are allowed to levy ad valorem (property) tax. The Texas Constitution states that ESDs may tax up to $0.10 per $100 of property valuation. The ESD’s creation documents establish the district’s initial tax rate.
ESDs may also collect sales tax, provided an election is held and voters approve this power. In Texas, 8.25% is the maximum allowed sales tax rate. The state collects 6.25%, leaving 2% available to eligible local jurisdictions, including ESDs. An ESD may collect anywhere from .125% to 2% of the local sales tax rate depending on availability and subject to voter approval.
ESDs are also allowed to bill for services provided, such as emergency medical services or fire protection, if it so chooses.
Q: Can all ESDs raise their ad valorem tax rate without voter approval as long as it stays under the constitutional cap of 10 cents?
A: Not all. If an ESD is created with a 3-cent ad valorem tax rate, it must receive approval from the voters to go above that rate, no matter how small the raise may be.
Q: Do ESD boards have meetings?
A: By law, ESD boards must meet at least once a month. All meetings are subject to the Texas Open Meetings Act. ESDs must also comply with the Texas Public Information Act concerning open records requests and records retention.
Q: What laws or agencies oversee ESDs?
A: While ESDs are established by Article 48-e of the Texas Constitution, Chapter 775 of the Texas Health and Safety Code is the enabling statute for all ESDs. ESDs are required by law to file an Annual Report with the Texas Department of Agriculture by January 1st of each year.
Q: What about financial accountability and transparency for ESDs?
A: Unless the ESD falls under an exception, ESDs are required by law to file an audit with their County Commissioners Court by June 1 of each year. If the audit is not filed by Sept. 1, the President and Treasurer of the ESD board are automatically removed from their offices.
If an ESD meets certain requirements, it may be allowed to file certified financial statements instead of an audit. This exception exists for smaller ESDs that would have difficulty affording an exhaustive audit process.
Q: Is there any training or continuing education required for ESD Commissioners?
A: Yes, each commissioner must complete at least 6 hours of certified training in a two-year period.
Q: Are ESDs subject to Truth-in-Taxation requirements regarding their budgets and tax rates?
A: Yes. As a political subdivision, ESDs must comply with all Truth-in-Taxation requirements.
Q: I live in an area that is covered by two ESDs. How is this possible? What is the most that the ESDs can tax?
A: By law, ESDs are allowed to overlap an area as long as they do not provide duplicative services. In other words, if one ESD provides only fire protection and another provides only emergency medical services, the two ESDs could overlap the same territory. Each ESD is subject individually to the 10-cent constitutional tax cap or to whatever limit voters imposed when they created the district.
Q: How do ESDs provide services to the public?
A: ESDs provide services in a variety of ways. Some ESDs chose to contract with an independent service provider, such as a fire department or an ambulance service. Other ESDs chose to function as the service provider themselves, taking on the role of overseeing the actual day-to-day management of the services.
Q: How many ESDs are there in Texas?
A: Currently there are around 300 ESDs in Texas, including seven “multi-county” ESDs.
Q: How much money does an ESD get in tax revenue?
A: That varies based on factors such as size, tax rate, property value, etc. Some ESDs have yearly tax revenues in the millions, while others make due with a few thousand dollars in taxes.
Q: Do ESDs support only volunteer fire departments?
A: No. While many ESDs contract with or support all-volunteer departments, many others support fully professional or combination (professional and volunteer) departments.