City Council’s Sales Tax Woes

The Sandy Oaks City Council held a special meeting on February 26, 2015 to discuss the illegal amount of sales taxes they created last fall.

In their first official meeting, the Council created an election for 3 new sales taxes that, if approved, would equal more than the amount allowed by Texas law.  The voters did approve all the taxes.  To read the full article about this click here.

Mayor Jim Clement and Alderman Joel Ortega were both absent from the meeting due to personal conflicts in their respective families.  The meeting was officiated by Alderman Earnest Gay who is Mayor pro tempore.  However, Alderman Micki Ball led most of the meeting.

She began by talking about how the fist person she spoke to at the Comptroller’s office didn’t recognize Sandy Oaks as a city because the Council had never provided the Comptroller with information.

I asked how you go about doing that and I was told they needed a copy of the official ballot, a copy of the official ballot results, which I secured both of those from Jaque from the Elections Office, they need approved minutes and resolution that establishes the tax rate.

Ball said she spoke with Tom Malone, the Manager of Tax Allocations at the Comptroller’s office.

I explained to him the issue with the tax rates that we had established, and hence this meeting.  We need to correct the error that was placed before us last time.  And then a map of the city, so I have 3 of the 4 items.

Secretary of Elections Division

Alderman Ball brushed the topic of having another election:

From the respective of – do we have to put this back on the ballot? There’s a couple of things that would prevent us from doing that.  Number one is that you cannot have the same item on the ballot within a year.  That would create more problems.

Ball said she spoke with the Secretary of the Elections Division, who told her that to have an election on the same item a full year needed to pass before it could go back on the ballot.  Ball stated:

She said that the 1 year lapse really needs to occur and that what we’re – since we’re working with the State Comptroller and they’ve given us guidance on what we need to provide to them, that that should suffice.

Ball also mentioned that she spoke to the Secretary of the Elections Division about the tax rate being changed without the Council’s knowledge or permission before being submitted for the election.  Ball said:

I don’t know who made the change, it doesn’t matter, but she did sternly comment that not only should that not have happened, it should not have been encouraged to happen.  So it’s not permissible nor should it have been allowed.

Eliminating the Street Maintenance Tax

Alderman Ball suggested the Council eliminate the street maintenance tax:

It was dropped to a quarter on the ballot.  We’re a quarter over.  It’s outside the chapter 321.  And quite honestly, the city owns very few streets that need to be maintained to begin with, those are all privately owned by the WPPOA.  It kind of makes sense to drop that piece.

She also added

Honestly, from my perspective, my decision was made based on legal council.  And that’s disappointing to me that we have legal counsel that we can’t rely on.

Martinez de Vara was the City Attorney at the time that the City Council created the illegal amount of sales taxes.

When Alderman Gay spoke on the issue he said he sought advice from Martinez de Vara earlier that evening.  Gay said

…He advised me that dropping that one particular tax is the easiest route to go because changing one of the other by 1/4 percent is probably going to send up a red flag that we don’t need to deal with.  Even though you may have approved a 1/2 percent, theoretically, you did approve a 1/4 percent.

The State Comptroller’s office, however, disagrees.  An Agency Spokesman told Sandy Oaks News “A City Council cannot change the rate approved by the voters.  Any change requires a vote.”

The Spokesman also added that the amount of the tax is seen as a contract with the voters.

Alderman David Tremblay agreed with the other Aldermen.  He said

My thoughts exactly.  The roads that are in the subdivision, at this point, have not been turned over to the city, so they’re not the city’s responsibility.  The only roads we have are county roads, which I understand are Waterwood Pass, Shady Forest, and New Mathis. And Priest.

So I think the easiest thing to do is just drop that extra 1/4 percent and move on.

After no further discussion, Alderman Ball made the motion:

I would like to make a motion then that we remove the street and maintenance tax that we previously approved and remove it from the resolution – but we never created a resolution – we will create a resolution that will include the 1% plus the 1/2% for sales and use only and disregard the 1/4%.

It was seconded by Tremblay and voted on unanimously in favor by the 4 aldermen present.

The Council next had to prepare documents to send to the State Comptroller.  Alderman Ball stated it would be difficult to do so because her intention was to get everything prepared that night, but the City Attorney, Art Martinez de Vara, was not there.

The Council called Martinez de Vara on speaker phone and had him prepare the Resolution document they needed.  He then prepared it and emailed it to the Council which was able to print it off and review it.

Chit Chat

While the Council waited for the attorney, Alderman Gay decided for a recess.  “We can have a chit-chat session if you want.”

He then announced that the City had money and handed over a check from City Public Service for $25,224.24 to Charlotte Rabe, the City Clerk.  The money came in from a franchise fee agreement between the city and CPS in order for CPS to have Right-of-Way access to public roads.

From the audience, Cathleen Recio asked about property taxes and if property owners were going to get a notice to prepare for a property tax, but Alderman Ball stated the topic wasn’t on the agenda so therefore couldn’t be discussed.

BJ Gillespie asked Alderman Gay why he stated at the previous City Council meeting that he received a notice from the State Comptroller that he should collect a 8.25% sales tax for his business.

His response was “Yeah, mine is, …mine said if I owe any tax, mine had 8.25% written on it.”

When Gillespie asked how it was possible, Gay raised his voice and said

I have no idea, I didn’t look at it because I didn’t have any taxable sales… I didn’t pay any attention to that because I thought at the time they did and that they were going to collect that amount.

Gillespie responded

I find it hard to believe that the state comptroller’s office would tell you to collect 8.25% when they don’t even know we’re a city. …I’d like to see a copy of it.

Prior to the meeting, the Agency Spokesman from the Comptroller’s office had confirmed with Sandy Oaks News that “No letter has come out because the city never sent in the proper paperwork.”

The Resolution

The Council went back into session informally and started with Alderman Micki Ball reading the resolution.

Where as the voters of Sandy Oaks approved 3 propositions establishing 1.75% of sales taxes in the November 2014 general election, and where as only 1.5% is available to the city to use, and where as the state comptroller has requested the city council to select which authorized propositions to submit up to 1.5%, now therefore be it resolved that the City Council of Sandy Oaks elects to submit proposition 1 and 2 to the State Comptroller that establish a 1.5% general use sales tax for the City of Sandy Oaks, Texas.

After reading off the resolution, Alderman Ball had to fix typos before she and the others signed it.  She stated she had all other documents needed to submit, including a map of the city.

According to the Comptroller Agency Spokesman, taxes go into effect a full quarter lapse after the Comptroller receives documents.  Sales tax is collected and allocated monthly.  Tax that is collected in 1 month is sent in the 2nd month, processed and analyzed, and is allocated back in the 3rd consecutive month.  The earliest the City of Sandy Oaks will see sales tax revenue is September.


After the Council ended the meeting, Alderman Gay thanked the audience of 8 for coming to the meeting.

I hope everybody is at least happy and satisfied with what has taken place here today.  We tried to correct an error that we shouldn’t have done to begin with.  We were wrong, we need to admit it, correct?

Members from the audience then spoke out against the City Council for allowing Art Martinez de Vara to be City Attorney and against him allowing the City Council to create an illegal amount of sales tax.

Outside the WPPOA clubhouse where the meeting was held, one resident stated “I’m surprised they still didn’t discuss Mayor Jim Clement lying to voters outside Freedom [Elementary].”

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One Response to City Council’s Sales Tax Woes

  1. longhorn April 4, 2015 at 10:22 am #

    Unfortunately, this meeting and the resolution that they passed SHOULD have happened within 10 days of the election. See section 321.405(a) of the tax code. My supposition (especially since I have reminded both the Comptroller’s Office and the Attorney General of it) is that we are safe from this 1.5 % sales tax hike until next November.