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What's really going on with Leander City Council and next year's property taxes?

The last 6 months in Leander have been electric. So many citizens are paying attention to something most never did before: their City Council. Between a contentious election and the City broadcasting our meetings, people are feeling engaged. It’s awesome to have the kind of involvement every city official wishes they could have. But it’s not without its downside.

This past week, Leander City Council had a very mundane issue, but looking at the comments online, the only thing that’s clear is that there is a lot of confusion about what did and did not happen.

The language on the agenda looked like this:

AGENDA ITEM #23

AGENDA SUBJECT:
Discuss and consider a Proposal to Adopt a Tax Rate for FY 2018-19

BACKGROUND:
If a taxing entity desires to consider a possible tax rate that would exceed either the effective tax rate or rollback tax rate, whichever is lower, state “Truth-in-Taxation” laws require the governing body to vote on the proposed tax rate and schedule two (2) public hearings. The proposed rate need not be the final rate that the governing body actually adopts, but the final rate cannot exceed the proposed rate. The FY 2018-2019 Budget includes a proposed rate of 56.1495 cents per $100 which is below the Effective Tax Rate of 56.6793 and 1.6372 cents below the current rate of 57.7867 cents. The rollback rate is 59.0542 cents. If the City Council does not wish to consider a rate greater than the effective rate of 56.6793, then the public hearings would not be required on the tax rate.

RECOMMENDATION:
Move to place the proposed tax rate for FY 2018-19 of 56.1495 cents per $100 valuation which is below the Effective Tax Rate on the agenda of a future meeting as an action item.

So…the agenda subject says we’re setting a tax rate, and then the background follows with all the legalese mumbo jumbo. At first blush it looks like we were indeed, adopting next year’s property tax rate. I’m not going to lie, that is something we could have done. But it was just one option and not one that we exercised. Buried in the legalistic stylings of that long paragraph are the phrases “consider a possible tax rate”, “the proposed rate need not be the final rate”, and “the final rate cannot exceed the proposed rate”.

So what does that mean? It means we just set a ceiling: the highest possible rate we can choose. The final tax rate has yet to be determined. This method takes several weeks longer than just adopting on the spot, but we’re in a very new and unique position this year.

On May’s ballot, there were a number of changes that could be adopted for the City Charter. One of those changes had to do with the time-frames that our accounting department has for creating the budget. We gave them a bit more time, consistent with state law. But that extra time meant that when we went to our retreat to discuss the budget and tax rate a few weeks back, there was no formal budget for us to look into, just a small presentation with the overall numbers and line items showing what departments had asked for and which of their requests they were and were not receiving.

I can’t speak to the rest of Council’s motivations, but I can speak to my own which are very, very strong: I can’t vote on a tax rate when I haven’t seen the budget. Period. I want to lower our taxes, but I have an obligation to you to make the most well-educated, informed, and responsible decision each and every time I raise my hand. I can’t in good conscious vote to change our tax rate without having an operating budget that tells me we’re expected to be in good shape a year from now. Honestly, you should expect no less from any of your elected officials.

So let’s clear up a few things with a little FAQ:

Is this a repudiation of anyone’s stated goals or policies?
No. This decision was not personal. If you feel that any of your elected officials are making decisions over personal conflict, you should raise Hell because that’s not in the oath we take.

Is this a sign of who you stand with/where you stand/your allegiance or affiliation to anyone or anything?
No. I don’t plan my votes based on alliances. I vote based on the facts available to me. For more on this, see answer #1 above.

Did anyone tell you how to vote?
No. I read through everything I had. Then I asked questions of people within our city. Then I researched the law and what’s been done in other places. I reached out to experienced Council Members and Mayors (both current and former) from here to the eastern border of the state: I read them what I had, asked what they would do, and ran through scenarios. I can’t speak for my counterparts, but my vote was extraordinarily well-informed.

Is this going to be our tax rate?
That, I don’t know. I hope not. I’d like to see it a little lower, but I can’t promise anything. If enough of you are interested, when I finish digging through the budget, I’ll be glad to share my thoughts. What I do know is that there is no possible way for your tax rate to be any higher than the one we set on Item #23, which is already, in and of itself, a decrease in your tax rate (appraisals though, I know).

Is this a shell game because you raised our PEC franchise fee?
No. The PEC franchise fee process has not even started, so most definitely not a done deal and not able to be a factor in a vote on the budget a week ago. Cities have a necessity to diversify their revenue streams so as to never be fully dependent on any one thing (think about the recession). We are looking at the possibility of raising our franchise fee with PEC from 2% to 4%, which would bring us more in line with our neighbors. Nobody likes fees, but unless you’re really cranking the kilowatts around the clock, this shouldn’t be too noticeable (my franchise fee last month was $3.50 with kids home for summer and seemingly every light in the house blazing). As an added bonus, you can lower your electric consumption to reduce your own fee on this one.

Can I still trust you?
YES! Nothing has changed! I’m still here for you and looking out for you! I double pinky promise.

What happens next?
We have two hearings at Council meetings, and I believe we may have a special called meeting to vote on a final budget, but I’m honestly not positive about that final part. We’ve bought ourselves more time to make sure we’re in a good position and looking out for our City and its residents. It’s business as usual.

I hope that allayed some fears. As always, if you have questions/comments/criticisms/heaps of awesome praise, please feel free to reach me at my Council email.  Every voice and every email count.

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