City Council Votes to Approve Massive Property Tax Increase, Denies Improprieties
At their August 20, 2022 City Council Meeting, the City Council voted to approve the largest single increase in property tax in the city’s history.
Weighing in at 136%, the city will raise a total of $499,999. This amount includes an additional $290,235 over the tax they raised last year – of $209,764, which pales in comparison to the new amount.
The meeting included a public ‘hearing’ to allow the public to speak. Only 2 people chose to address the City Council. I was one of them. Here is the direct link to my comments.
I presented three matters of concern.
First – The City Didn’t Follow the Law
The meetings and documents presented leading up to this “hearing” failed to meet the legal requirements under the Texas Local Government Code. In my comments, I quoted Section 102.005. As I continued, I addressed other issues that are found in 102.006, 102.0065, and 102.007. Here’s a direct link to the actual law.
What was my complaint?
On numerous points, the City did not follow the legal process to even have the hearing being held. Later, while attempting to answer my concerns, city staff would excuse themselves from responsibility, by claiming that since Simonton is a “small taxing unit”, they are somehow exempt from this element. I disagreed and the City Secretary invited me to submit an information request for information and they would provide documentation proving that assertion.
I have submitted that request and I am awaiting an answer to it. The City has up to 10 business days to provide the requested information. Click HERE for the notes I read from and also presented to attendees, City staff, and the City Council.
Second – The Budget’s Confusing Percent Calculation
I found that the budget, that the City failed to make available online until just 4 days prior to the hearing, presented contained an entire column of incorrectly – really misleadingly calculated percentages that made the actual percentages of increase appear to be strikingly less than they actually were. Click HERE to for this portion of the video.
Consider that the percentage indicated as “% Change” for the “Ad Valorem” (Property tax) category on the first line was shown as 58% – not specified as an “increase” ,just as 58% under the City’s “% Change” column. It gets worse.
The fact is that when the proper numbers are calculated – the real percentage of increase – based on the numbers provided by the City on their proposed budget – is actually over 138% FAR GREATER than the 58% reported.
To demonstrate my point with documentation and facts, I re-created the first page of the city’s budget spreadsheet wherein I properly re-calculated the City’s numbers. I provided my version of the first page of the budget to attendees and to the City Staff and Council. Click HERE for the spreadsheet I presented.
The City Manager blamed the “% Change” miscalculation issue on the governmental software they use and later on their “Zero Balance Budget” through which the professional software that made the calculation – but made no apology for it and took no responsibility for failing to check it before presenting it. Ultimately, and much later in the meeting when an entirely different speaker was giving her public comment, the City Manager’s solution to the incorrect percentage being displayed, was to delete the percentage altogether in future years.
I suppose that from now on, we, the citizens, calculate the percentage of increase – or hopefully decrease – on our own.
Third – Amount Questions
I questioned a number of budget categories, including:
- Community Outreach
- Transfer Out
You can watch the video to hear my concerns and the responses I received here.
The only other person that addressed the City Council during the Public Hearing was Rebecca Tipton. She also had issues with the presentation of the budget among other things. Here is the direct link to her comments. In her words, “The numbers don’t make sense.” Ms Tipton agreed that “The percentages are visably, obviously not correct.” She continued, “But, before it gets posted anywhere, I would think that this is something that you would look at and go hey, this isn’t going to work. It throws up huge flags like you’re trying to sneak something by – especially because it’s at the last minute.”
During her comments, Ms. Tipton asked “Is there was any way that there could be an extension made where people can have a little more time to look at it and either settle themselves with it – or not?”
She went on to ask about the amounts for “Community Outreach” and “Consultation”, as well as amounts for “Travel”. She received an extensive explanation regarding Travel saying that certain trainings are required and paid for by the city. The City Manager went on to say Consulting relates the the “best estimate for a comprehensive plan for the city.”
Huge Budget Balance?
Ms. Tipton then asked about speculation that there is a “huge budget balance” and asked “Is it necessary to raise taxes, which are not going away.” Directing her question to the City Manager, she asked, “You say this is a temporary need, why do we need a permanent solution?”
Disregarding questions about the “huge budget balance” and why the city sought the “permanent solution”, the City Manager instead responded, “So, we felt it was fiscally responsible as a council this year to ear tag this very first year specifically what that money was going to be used for a comprehensive plan.”
Interestingly, the City Manager went on to explain the truth about the large numbers, stating that if there was any savings to the Comprehensive Plan, “At the end of the year, that money is just folded – into – our reserve system. But, going forward…that will allow the city to start creating a coffer for public works projects.”
Taxes Never Go Down?
When Ms. Tipton complained that taxes never go down, the City Manager interrupted her saying, “In fact, if you look at our 10-year tax health, there are several years where we did reduce taxes.” This statement may appear misleading to some, because she made no distinction between tax rates and tax revenue. Tax rates generally come down when property values increase – but taxpayers are still paying more overall.
Further, tax revenue did fall following flood events. This was not because the City reduced taxes, but because the Central Appraisal District lowered appraisals and resulting passements because area homes had been so extensively damaged.
The City Manager tried to explain to Ms. Tipton that “Honestly, the likelihood is that our appraised values continue to go up next year the likelihood that our new revenue drops is very very high, which means that we’ll have a reduction in taxes. Yes. That’s what she said.
Once again, the City Manager did not address the core issue that Ms. Tipton was asking about – that the tax (rate) of 44 cents per hundred would not come down and that the city based their long-term tax rate decision on the short-term need for a “Comprehensive Plan”.
Budgeting for Capital Improvement?
Ms. Tipton asked a new question regarding “If you’re thinking this is for capital improvement, shouldn’t this be budgeted as such?” The City Manager began to explain about the way cities budget, but was interrupted by the Mayor, who said “We are going to budget the line items where we think we are actually going to spend them. We are not trying to build a war chest.”
To some present, the Mayor saying that the City is not trying to build a “war chest” seemed to contradict the City Manager’s statement about how the City’s plan is “…that (unused/reallocated) money is just folded – into – our reserve system. But, going forward…that will allow the city to start creating a coffer for public works projects.”
The next question that Ms. Tipton asked related to the budget category titled “Transfers Out”. She further asked to know how much money the City actually had in reserve.
The City Manager responded with an explanation of how the State deposits sales tax and how sales tax is “split up”. While speaking about other subjects related to accounting such as protected funds and how the council spends money, the City Manager never answered the core question that Ms. Tipton had about the city’s reserves, which she had described as the City’s “huge budget balance”.
Asking again for a delay?
s. Tipton returned to her earlier request that “Is there any way to postpone a vote where you say if you want more time come take a look at it and ask questions.”
The Mayor’s response was to say “That would be Council’s opportunity to do that when it comes time to vote on the item this evening.” Without addressing the question of how the people might like to have more time, the Mayor explained that they (the Council) had already spent a lot of time on it and that it (the budget) has to be agreed by the end of September.
The Mayor asked the City Secretary if they had another meeting opportunity before the end of the month (to vote on the budget). The City Secretary said that “We have next week…any of those days, I guess”.
Without pursuing the opportunity to schedule a future meeting date for adoption of the Budget in order to allow the public to have time to review the documents in greater detail, the Mayor, instead, simply moved on and asked “Do we have any other public comments for the Budget Hearing?”
Hearing that there were none, the Mayor immediately closed the Public Hearing and proceeded with the balance of the regular meeting, which included other City business.
Ultimately, the meeting ended with the City Council voting unanimously to adopt the proposed budget, even above the previously heard public calls to delay it.