LHISD to provide freeport tax exemption



Liberty Hill school trustees voted Monday to allow an exemption to the Freeport Tax in an effort to help the City of Liberty Hill attract manufacturing businesses.

After a study commissioned by the City’s Economic Development Corp. showed minimal impact on the school district’s tax base, the Board voted to repeal a 1989 decision that did not allow for the exemption.

The Freeport Tax is assessed on property coming into Texas from other states that is used in manufacturing items here and then distributed out of state within 175 days.

In an effort to spur economic development and create more manufacturing jobs in Texas, the Legislature allowed local governments in 1989 to decide whether to exempt freeport goods. Liberty Hill ISD did not permit the exemption, and Liberty Hill was not incorporated as a city at that time.

City Administrator Greg Boatright told The Independent after the meeting that the EDC Board requested the school district consider the tax exemption because it might help the community attract manufacturing businesses. The EDC paid the financial consulting firm of Moak, Casey & Associates to determine the financial impact of a Freeport Tax exemption on the school district.

There are no businesses within the city limits at the present time that are subject to the tax.

Inside the Liberty Hill school district, however, only Hellas Construction is subject to the tax. The study by Moak, Casey showed Hellas with $382,868 in freeport value. Exempting the tax in fiscal 2017, would mean a net negative impact on the school district of $7,679.

Dan Casey told the Board Monday that in the first year, the district would see a one-time loss of $5,764 from Maintenance & Operations fund, and a $1,914 annual recurring loss in Interest & Sinking.

Superintendent Rob Hart said the decision’s impact on the school district “would be minimal.”

Casey explained that cities that can boast a “triple freeport” are in a better position to be considered as a possible location by manufacturing businesses. Because school district taxes make up the majority of the total tax bill, a district’s buy-in makes the difference.

Williamson County adopted an exemption to the Freeport Tax some years ago.

“Going forward it’s important that we can respond that we have a triple freeport,” Boatright said. Boatright and some members of the EDC Board — Lance Dean, John Clark and Rick Hall — were present for the school board meeting, but did not address trustees.

Boatright said the availability of large tracts of land in Liberty Hill along with water and wastewater infrastructure makes the community more attractive to manufacturers. He said city staff have responded to inquiries from some manufacturing businesses, but he could not say with certainty whether the absence of a freeport exemption was the reason why none have chosen to locate here.

“We don’t know what companies have checked us off the list because we didn’t have this,” he said.

The state maintains a list of cities, school districts and counties that exempt freeport goods from taxation. Casey said many companies start there when looking for communities to call home.

“This opens up additional options for us,” Boatright said.

He said the City Council had recently joined the Commissioners Court in urging the extension of 183A toll lanes into Liberty Hill. With a freeport exemption, the City’s ability to provide infrastructure to larger land tracts, and a faster Austin commute, Liberty Hill is in a prime growth position.

Boatright said the City Council will consider a resolution to adopt a freeport exemption when it meets at 6:30 p.m. Monday, Oct. 24.

Other school districts in Williamson County that allow the exemption include Georgetown, Round Rock, Hutto, Leander, Taylor and Florence. In Burnet County, Burnet ISD allows the exemption as well as Marble Falls ISD.

The Board’s action Monday to allow the freeport exemption can not be revisited in future years.

In other business this week, the Board approved the creation of one Life Skills teaching position at Liberty Hill Elementary School, and the principal position for the new Rancho Sienna Elementary School.

Human Resources Director Bobby Mabry said although the new school does not open to students until August 2017, a Principal should be hired and begin work in January 2017. Until the building is complete, the principal will work from central administration office.

“Once attendance zones are drawn there will be plenty to do,” he said, adding that the new principal will play an important role in hiring a counselor, nurse, secretary and teaching staff.

He said another Life Skills position is needed because the number of students in the program has increased from three in the first week of school to seven.

Hart said current enrollment figures show the total number of students at 3,673 — an increase of 24 since the Board’s September meeting. The number is 181 more than at the end of school in June.

Hart said high school enrollment is well within the Class 5A cutoff established by UIL in the spring. High School enrollment is at 1108 and the cutoff last spring was 1099 — a number that Liberty Hill narrowly missed at the time.

“We are in the 5A range at this point,” he said.

Hart added that the largest class is the sixth grade, which has 309 students. Bill Burden Elementary is over capacity with 861 students.

Also Monday, the Board approved the schematic design for the improvements to Liberty Hill Elementary School and the agriculture facility at Liberty Hill Junior High.

Both projects were part of a $35 million bond issue approved by voters in May.

At the elementary campus, improvements will be made to make the school more secure. To help meet that goal, administrative offices will move to the front of the building with window access into the parking lot.

Walls, ceilings and floors will also be improved throughout the building. Construction will be done during the summer 2017 and be complete when school opens in August 2017.

The agriculture facility will also see significant improvements starting with a secured sliding gate entrance. The facility, which will all be enclosed within a fence, will also have an improved show arena. Separated animal pens with proper ventilation, lighting and electricity will be an improvement, as well as a compost area and animal feed storage area.

The Board rescheduled its November meeting due to Thanksgiving vacation from the third Monday to Nov. 14 at 6 p.m.