City officials will attempt to distribute funds left over from dissolved MUD
CORINTH — City officials will attempt to refund the remaining balance from a district that residents voted to dissolve in May 2011.
When voters terminated the Corinth Municipal Utility District No. 1, the city assumed the remaining assets of the district and created a separate account, which has a current balance of $20,817.44.
During a meeting Thursday night, City Council members discussed whether they should refund the money to property owners or fund a city project in the district.
“I think when it comes to a project, it’s going to be difficult trying to decide what we want to do,” Mayor Paul Ruggiere said. “I think we made it clear that our original intent was to return the money.”
Council members agreed that it was more appropriate to give the money back to the property owners, who, council members said, were taxed unfairly. No action was taken, but the council instructed city staff to develop a plan to best distribute the funds.
The utility district was created more than 25 years ago after a developer built streets but abandoned the project before completion. Residents and homeowners formed the district to issue bonds that would continue the project and pay for water and sewer lines and curbs.
However, controversy grew years later when the district’s board members established a 15 cent per $100 valuation tax rate for the 2010 tax year, even though the district paid off the last of the bonds earlier that year.
City officials estimated that the new tax brought in $100,000 to the district.
Ruggiere said the district was attempting to use the money to fund projects outside of its original intent.
According to meeting minutes, residents and council members said they believed the district had outlasted its usefulness and they had the right to dissolve it.
A month after passing the ordinance to dissolve the district in November 2010, the city filed a lawsuit against the MUD and its director to enforce the dissolution. In the suit, the city secured a temporary restraining order that prevented the district from spending money on anything other than routine items.
However, utility district officials fought the ordinance, resulting in a forced election.
Residents voted against the district and since then, the district’s board members refunded more than $200,000 to 559 properties. Now that the district in dissolved, the city will have to refund the remaining balance.
“We should make an effort to return it,” Ruggiere said, echoing a similar statement he made in 2010, according to city minutes.
Finance Director Lee Ann Bunselmeyer said the tricky part will be trying to cross-reference the 2010 property owners with the current property owners to see if they’re the same.
A few homes may have been sold, or been affected by a bankruptcy or divorce proceeding during 2010, which could possibly slow the refund process.
Council members said they would prefer cutting checks for the original property owners at the time who contributed to the current fund. Bunselmeyer said there may be ways to track down the original owners using county data.
Bunselmeyer said if the balance is split evenly with the residents, each home would get about $36. But she said if council members decided to do it by valuation of each home at 2010, the check amounts would vary.
“To do that it will be very complex, but we have the data,” she said.
JOHN D. HARDEN can be reached at 940-566-6882. His e-mail address is firstname.lastname@example.org.