Pilot Point EDC will soon be Pilot Point MDD: What it means

On May 1, 2021, the citizens of Pilot Point officially voted to dissolve the Pilot Point Economic Development Corporation (EDC) and form the Pilot Point Municipal Development District (MDD).

We can hear it now: the collective “huh?” followed by many questions.

“What does THAT mean?”

“Are my taxes going to go up?”

“How will it affect me?”

We are here to answer those questions and more as we continue the formal process of transitioning to becoming Pilot Point MDD. But in short: the citizens of Pilot Point will see very few changes from this transition, which will allow us to do economic development projects in both our city limits and in our ETJ (Extra-Terrestrial Jurisdiction)!

For starters, a Municipal Development District is a special purpose district created for the purpose of generating economic development and growth opportunities within the boundaries of the district. The proposed Pilot Point MDD boundaries includes the Extra-Territorial Jurisdiction (ETJ) if not otherwise included in an adjacent city or another city’s ETJ.

Q: What are the differences between a Type B Economic Development Corporation (EDC) and a MDD?

A: The City currently has a Type B EDC. The MDD will be able to perform the EXACT SAME types of projects as are currently allowed by our Type B EDC, namely projects related to:

  • Retail
  • Restaurant
  • Parking facilities
  • Infrastructure
  • Entertainment and tourism projects
  • Conventions
  • Public parks: including stadiums, ball parks, amateur sports, athletics, auditoriums, amphitheaters, concert halls, parks, and park facilities
  • Municipal buildings
  • Museums
  • Other related improvements that enhance any of those items

The major difference is that an MDD can impose a one-half of one percent (.005) sales tax in the ETJ of the City. The EDC can only impose its sales tax within City limits.

State law authorizes expenditure of MDD funds for a variety of economic development activities including certain  infrastructure improvement  projects, certain recreational or community facilities, projects related to business enterprises that create or retain primary jobs, projects that promote new or expanded business development, or convention center facilities and related improvements.

Q: Who will pay for the MDD?

A: Anyone making a purchase of taxable items inside the boundaries of the Pilot Point MDD will pay the sales tax, including purchases made by individuals who live outside of the district but who are shopping and eating in the district. This is very similar to what occurs with the EDC within the City limits.

Q: Who determines how the funds are spent?

A: Board of Directors must adopt a budget for each year at a public meeting. Once the MDD Board approves the budget, the budget will be presented to the Pilot Point City Council for final approval.

Q: How do we know the funds were spent for their authorized purposes?

A: State law requires the District to have an annual audit conducted by an independent auditor. The audit and other District records are open to public inspection during normal business hours.

Q: How are MDD funds kept separate from other city funds?

A: Sales taxes collected for the MDD are reported separately by the State Comptroller and the information is available to the public. State law requires that all MDD funds be deposited in a special account that is separate of all city accounts and funds.

Q: Who oversees the MDD?

A: In July, the Pilot Point City Council appointed seven members to the MDD Board of Directors. In addition, the City Council will adopt policies and guidelines that will govern the action of the MDD Board, including requiring all actions of the board be subject to review by the City Council.

Have further questions regarding the MDD and our transition to this new role? Email director Denise Morris at [email protected]