McKinney MUD Nos. 1 and 2 (the “MUDs”) have entered into a one-year Interlocal Agreement (“ILA”) with the Collin County Emergency Services District (the “ESD”) which ILA provides that, after the ESD collects taxes from the MUD residents, the ESD will rebate a portion of the taxes to the MUDs. It is important to note that the ESD will not rebate 100% of the taxes collected from MUD residents but will first deduct an administrative fee in an amount which is determined solely by the ESD. The MUDs expect to receive the rebated taxes sometime in February 2027.
The one-year term of the ILA puts the MUDs in a very precarious position. If the MUDs were to lower their tax rate by $0.10 to offset the ESD tax and the ESD elects not renew the ILA, the MUDs will not be able to increase their tax rate by the $0.10 and would not have the funds to pay the annual fire fee to the City of McKinney.
The MUD Board members are all residents of Trinity Falls and pay the same taxes as every other resident, so this matter is just as important to them as it is to every other taxpayer in Trinity Falls. They are all very cognizant of the double taxation issue. The MUDs are working with the Districts’ Financial Advisor to come up with a way to lower the tax burden for the taxpayers in the MUDs. For this first year, the plan is for the MUDs to earmark any rebate received in February 2027 from the ESD and then use those rebated taxes to pay a portion of the annual fire fee due to the City of McKinney in March/April 2027.
The MUDs encourage any resident who has questions about the ESD to attend a MUD Board meeting to discuss this matter directly with the Board and to not rely on social media for information about the MUDs and/or the ESD reimbursement.