For the first time since September of 2014, the City Council is going to look at a budget for the city. The only reason they’re doing so is because they are legally required to and because they plan on creating a new property tax that is going to nearly double what Sandy Oaks residents are currently paying.
The proposed Budget was created by Alderman Earnest Gay. Usually the Mayor of a city serves as the budget officer, but Mayor Clement resigned and Gay is the Mayor Pro Tempore and has taken over the Mayor’s duties and responsibilities.
Budget Doesn’t Meet Legal Requirements
The proposed budget that was supposedly submitted to the City Clerk, Charlotte Rabe, on August 7, 2015, has many legal issues.
The budget is missing a cover page
When you access the proposed budget on the city’s website you will notice there is no cover page to the budget. A cover page is required by Texas law because part of the proposal is to raise property tax and the cover page must state so.
A second document on the city website is called “the cover page”, but calling something a particular title doesn’t make it into something else. Perhaps someone noticed the legal mistake of the missing cover page and added it after the original proposed budget was produced since the document is a pdf that is not easily editable.
The purpose of a cover page on a proposed budget is to inform the reader of important information about what they are about to read. Anyone who looks at only the proposed budget will never see the “cover page”, a separate document, which is why this is an important legal issue.
Sec. 102.005. PROPOSED BUDGET FILED WITH MUNICIPAL CLERK; PUBLIC INSPECTION.
(b) A proposed budget that will require raising more revenue from property taxes than in the previous year must contain a cover page with the following statement in 18-point or larger type: “This budget will raise more total property taxes than last year’s budget by (insert total dollar amount of increase and percentage increase), and of that amount (insert amount computed by multiplying the proposed tax rate by the value of new property added to the roll) is tax revenue to be raised from new property added to the tax roll this year.”
Yes, the city provides a document that shows the information needed in a cover page, but that document is not currently covering the proposed budget.
The cover page is inconsistent
The information on the “cover page” doesn’t match the information in the newspaper announcement that the city had published in the Wilson County News on August 19, 2015. This means that one of the two (or both) is incorrect.
The notification in the newspaper mentioned $9,000 being added to the tax roll this year. However, the “cover page” changed the number to $14,256.60, a much more specific number.
Basic Legal Requirements Were Ignored
The cover page needed to meet certain legal requirements.
Sec. 102.005. PROPOSED BUDGET FILED WITH MUNICIPAL CLERK; PUBLIC INSPECTION.
(b) A proposed budget that will require raising more revenue from property taxes than in the previous year must contain a cover page with the following statement in 18-point or larger type: “This budget will raise more total property taxes than last year’s budget by (insert total dollar amount of increase and percentage increase), and of that amount (insert amount computed by multiplying the proposed tax rate by the value of new property added to the roll) is tax revenue to be raised from new property added to the tax roll this year.”
Texas law also states that the 18 point font must be used in the legally required newspaper announcement.
Sec. 102.0065. SPECIAL NOTICE BY PUBLICATION FOR BUDGET HEARING.
(d) Notice under this section must include, in type of a size at least equal to the type used for other items in the notice, any statement required to be included in the proposed budget under Section 102.005(b).
This means that the official announcement for the Budget Hearing that was published in the Wilson County News did not meet the requirements of Texas law because the correct font was not used to match the cover page.
The cover page that doesn’t exist, but should.
Texas Law Requires Comparison
Local Government Code 102.003 defines “Itemized Budget; Contents.” Here’s how it reads:
Sec. 102.003. ITEMIZED BUDGET; CONTENTS. (a) The budget officer shall itemize the budget to allow as clear a comparison as practicable between expenditures included in the proposed budget and actual expenditures for the same or similar purposes made for the preceding year. The budget must show as definitely as possible each of the projects for which expenditures are set up in the budget and the estimated amount of money carried in the budget for each project.
Legally, the budget is supposed to show the revenue and cost for each item for the previous year. One of the purposes of a budget is to compare expected expenses of the future year to previous expenses of the last year. However, not a single item in the proposed budget shows any information about what happened in the last year.
Legal?
Because the proposed budget doesn’t meet basic legal requirements, and because the Budget Hearing wasn’t announced the required legal way, is the Budget Hearing even legal?
If none of it is legal because Alderman Gay didn’t prepare it properly then does that void anything decided at the Hearing?
If so, and if the City Council doesn’t hold a proper Budget Hearing before September 30th, then Sandy Oaks might go another year without property taxes and without substantial revenue.
Revenue
The majority of the expected revenue listed in the proposed budget comes in 3 forms.
- Property tax = $240,000
- Sales tax = $7,500
- Franchise Fees = $92,000
How Alderman Gay came up with $240,000 is not known because and is not explained. However, by dividing the number by the proposed tax rate, then multiplying by 100, we can find that Gay believes the overall taxable property in Sandy Oaks is worth $80 million.
Former Mayor Jim Clement had claimed in the summer of 2014 that the area was worth $64 million. In September of 2014 he claimed the area was worth over $90 million.
Sales Tax Is Off
VIA Metropolitan Transit Authority claimed it took in $1,000 a month from the .5% sales tax collected in the area.
$1,000 times 12 months equals $12,000 a year.
The city is bringing 3 times the amount VIA does, so the city should be bringing in at least $36,000 a year in sales taxes. And yet the proposed budget shows a sales tax revenue of only $7,500.
Sales tax collection revenue is public record and could have been easily researched before creating the proposed budget. Obviously no one did this research.
Expenses
The proposed budget includes $340,000 in expenses.
- 28% of the expenses are just for 3 part time employees: Marshal, Clerk, Attorney
- 25% is just for the office of City Clerk and City Marshal (including salaries)
- 54% goes to just administrative tasks
- 30% goes to a reserve fund
- Only 7% of the revenue goes to animal control, road repair, and mowing
Double the Tax, Half the Services, Zero Responsibility
Bexar County tax is 29 cents, and this proposed city budget includes an additional 30 cent tax. If the Council approves this budget they will be doubling the property tax, but would be providing very little in return.
Before incorporation in 2014, the Waterwood area received services from the county that included animal control, some mowing along streets, and some road maintenance. Now the community will continue to pay county taxes, but receive no such services from the county. Instead, we’re about to pay double and receive even less in return.
If the City Council is going to impose a new tax burden on the community then they owe it to the community to at least do some research on something as important as a yearly budget. They owe it to the community to read the law to make sure the budget is announced legally.
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