Broader Services, Higher Taxes Could Be Coming To More Than 70,000 As Metro Eyes Urban Services District Expansion

Metro is considering a plan to expand services to more than 70,000 households, but those homeowners would be on the hook for a higher property tax bill.

At its Thursday meeting, the Planning Commission will consider a plan to expand the Urban Services District by 63,379 acres containing roughly 74,000 housing units, increasing the size of the USD by more than 50 percent.

The Metro Charter, adopted with consolidated government, creates two districts within Davidson County: the USD — originally comprising what was the City of Nashville proper — and the General Services District. The USD receives Metro-provided trash and recycling, water and sewer, street lights, and additional police and fire protection. In addition, liquor stores can be located within the USD and new development projects require sidewalk installation.

In exchange for those increased services, those within the USD pay higher property taxes, $4.516 per $100 of assessed value versus $3.924 in the GSD. On a $300,000 home, that's about $444 per year.

In its report to the Planning Commission, Planning Department staff say that most areas within the proposed expansion already receive police and fire protection and water and sewer at the USD level and so are, in effect, being subsidized by those already within the USD.

Planning also notes that the property tax increase would not be as dramatic as it seems if decreased costs to homeowners elsewhere are factored in. For example, those within the GSD have to pay for private trash and recycling haulers on the average of $324 per year. Since those services would be provided by Metro under the expansion, the aforementioned $444 property tax increase would effectively only be $120. Furthermore, proposed future fire halls would increase the service area for fire protection, leading to lower homeowners' insurance rates.

The plan would cost Metro $11.6 million in the first year with $5.3 million in recurring costs, but because of the significant increase in properties taxed at the higher USD rate, the plan would generate nearly $19.6 million in revenue. The Planning staff also reported an option to spend up to $3.1 million on new street light poles in the new USD area, which would have annual upkeep of up to $649,000.

The largest expansions would be in the Old Hickory and Lakewood areas east of town — Lakewood had been a satellite city until its disincorporation in 2011 — and west of downtown in Bellevue, parts of which were added to the USD in 2011, in large part to allow for liquor stores.

If the expansion is ultimately approved by the Metro Council before the end of the year, the properties would be assessed at the USD rate starting on January 1, 2017, and the full menu of USD services would have to be in place by October 2018 by law.

The Planning Department set up a web site for property owners to determine if they are within the proposed expansion area.

Image via Wikimedia user Kaldari