Travis County Commissioners Court
Tuesday, April 5, 2011 (Agenda)
Item 19
Item number 19 is to receive brief recommendations from local tax policy working group on Travis County historical property tax exemptions for the disabled and/or over 65-year-old property owners.
we note here our intention is to receive the presentation today, have the court ask whatever questions it has, and to post this item for public discussion on Thursday of next week, April 14, beginning 1:30.
the purpose of that is to allow as much input as the residents want to give at that time.
good afternoon.
>> judge, Commissioners, I'm leroy nellis, your budget director.
last summer you asked my staff to chair and later dusty to help me cochair this local tax policy working group to investigate any number of things.
we're here today to discuss those those recommendations from the committee on property tax exemptions.
first of all, I would like to recognize all of the members of the committee.
I'll read those out.
including the staff members of several offices that have helped us, because without these committee members, and I might say a lot them were unable to attend because they are involved if the legislature, the members of the large committee, the working committee included billy hamilton from the state comptroller's office, brian rogers, private citizen dick la convenient from the center of public office policy, joe trash from the attorney general office john stevens from the subtral health authority, dusty knight, my cochair from the tax assessor collector's office, elliot beck, to my left, from the county attorney's office, sues be spataro the county attorney auditory, deeseecen stein, our legislative cord freighter--coordinate, harvey Davis, and the instrumental throughout the process, peter enhorn from Commissioner Eckhardt's office was the scribe and we certainly appreciate his taking of the minutes and helping us.
rene from the tax office, tim, john, sheryl from the tax office and caroline damron from the county auditor's office.
we appreciate all the help all the staff and the committee members gave to us.
what I would like to do is kind of refresh for you what the charge of this committee was given.
then we'll go on to some of the recommendations.
let me get that charge right here.
the charge that the committee was given was to identify all options under current law that are currently deployed or could be deployed to better align property owners wealth with tax burden, that was number one.
number two, develop a way to educate taxpayers about how their tax bill breaks down, and develop methodology for presenting their tax bill so that it clearly outlights how each tax is jurisdiction approaches the various exemptions.
number 3, analyze how deployment of existing tools, whether currently utilize the or not, could better alleviate the burdens on those least able to afford it, including but thought limited to homestead exemption, over 65 discount, disability discount, historic exemption, any other tools that are available to county government.
number 4, make practical and politically mindful recommendation to the court for near term policy implementation to better align wealth with burden.
number 5, identify possible legislative action to improve or add to the tools available to better align wealth with burden, and make recommendation to the court for consideration of long range policy goals with regard to better alignment between wealth and burden.
what I would like to do today is give you a little bit of, kind of a summary outline first.
then I'll turn it over to dusty, my cochair, to go over some specific recommendations.
we essentially outline those recommendations to the court and have had available electronically as backup to this agenda item our memo to you dated March 2, in which the subcommittee that dusty chaired of the major committee, we listened to presentations from the Austin historical society to gain next.
they made presentations to the subcommittee.
we did listen to rick hard , a private citizen, that col follows on the other side of the subject under question.
both presentations provided valuable information to the subcommittee that we considered.
at the time that we submitted our recommendation, the backup to the court, we did not have authorization from the Austin historical society to release their final report.
and that is the reason it's not in there.
what was included was the draft recommendation that we were able the submit.
>> okay, is the historical society the same as the Austin heritage society?
>> it is.
you Austin heritage society.
>> there is a historical societ.
>> okay, it's Austin heritage.
rick harden did give us authority to provide all of his information that he presented to the subcommittee, so we did attach it.
many questions have come up during the course since last summer, and the meetings of the committee.
we have restricted our conversations to the items as listed in the formal charge that I read earlier.
so many questions fall outside that charge.
and we have not attempted to answer or find answers to those that don't fall within the charge.
there has been some questions that have surfaced that I do think might need a little more ex planation before we get into our recommendation.
let me just go over one in particular.
it was always assumed that the recommendations of this committee would comply with all federal and state regulations and laws.
we have had indication brought to our attention that the Texas state tax code section 11-24 does have some restrictions on governmental entities that are granting historic tax exempt shun.
there's two provisions.
number one, that a property must be designated as a recorded Travis County historical landmark under chapter 442 government code or state archeology landmark under chapter 191 natural resources code by the Travis County historical commission.
that is one qualification.
the second would be that it be designated as a historically or arc logically significant site in need of tax relief to encourage preservation pursuant to ordinance or other law adopted by the governing bodies of the unit.
although the committee did not specifically site these statutory requirements, it was always our intention that any recommendation from the committee comply completely with any federal or state law.
so I wanted to point that one out because we didn't, in our cover letter, you will notice that we did not specifically state that I think it might be helpful for me just very quickly to go over the current policy, the historical exemption policy that our office, the planning andr and budget office, submitted to the Commissioners court on may 27, 2010.
and I'll be very brief on this.
beginning in 1970, the city of Austin has given a historical property exemption for residential property on 100 percent of a historic structure and 50 percent of the land.
for commercial property the exemption is 50 percent of the structure and 25 percent of the land.
there is a cap on the tax bill of owner-occupied historic residential properties added to the historical property list after December 1 of 2004.
the cap is $2000 or 50 percent of the property tax bill, whichever generates more revenue.
the city of Austin does not impose a cap on commercial property.
that is the city of Austin's current, as I understand, historic exemption policy.
Travis County has the same historic property exemption but does not cap the tax bill.
the county began giving historic exemptions in 1981.
Travis County also gives residential property owners a 20 percent homestead exemption, which the city does not, as well as a larger over-65 and disabled exemption.
our current exemption policy coupled with the historic exemption has led to some high value properties having little or no taxable value.
the procedure for calculating the two exemptions in this case, the 20 percent homestead exemption and the historic, has the calculation for the homestead exemption, which you're giving 20 percent, calculated first.
so that you get the 20 percent on the total taxable appraised value, assessed value.
give you a very quick example that was included in your may 27 again, memo of the effect of this.
if you have an assessed value of a property, homestead owned by a person over 65 that has a historical exemption on it, that 500,000 homestead in Travis County would have a taxable value of 35,000, including over 65, your 20 percent and the historical exemption.
there are a couple of assumptions in that.
that would mean that that property owner of $500,000 would pay Travis County, and these are based on 2009 since this memo dates back to may of 10, $147.
the average, and I know that we have a couple of numbers in here the average of the historical homesteads that we have about 558 of those, I think you will see in the backup, the average is somewhere between 700,000 and a million dollars, depending on how you kind of calculate it.
we have a little more work to on do, but it is above 700,000.
this example.
now, a nonhistoric residential property owner that is over 65 with the same type of exemptions but not receiving the historic, would be paying $1412.
under the city of Austin that does not give a 20 percent homestead exemption, they would be paying $627.
so I wanted to give you a little bit of an example that without the cap on the historical, Travis County, and with the 20 percent, then the Travis County currently gives over 65, a $65,000 exemption, and the city of Austin gives a 51,000, so they are a little less than we are, but the difference in the tax bill that a person gets from the county, which is $147 and for the city is 627, about $500 more from the city, that gives you some perspective in what the committee was attempting to deal with within the confines of the charge that you gave to the committee.
we were very pleased to have elliot beck on our, not only the subcommittee but the large committee from the county attorney, giving us some legal advice, helping us kind of research some of those I think with that kind of overview, I'd like to turn it over to dusty and let him kind of go over the recommendations that the committee is making to you today.
we do welcome the public input next Thursday at 1:30 here.
>> I just have one question if I could right off the top.
>> okay.
>> the comparesance that you found in other county and cities was that the same situation, that the county gives the homestead plus elderly plus over 65, and the city does not, is that true of the other counties and cities?
>> the major ones we looked at was harris, dallas, terant and bear county, those four.
we weren't looking at what the city was doing.
I can tell you that only two those four counties actually give the 20 percent as local option.
two of them don't.
>> okay.
>> the homestead.
>> the homestead exemption.
I will speak to that as soon as I get rolling.
>> okaythat was the first part, I guess I'm started.
okay.
give you a bit of background.
first thing we were doing, this is back when we were looking at everything, circuit breakers, all kind of things.
one of the first things, which I know y'all have done before, what are our peer counties doing.
that is what we did do, look at them.
and in all instances where they are actually giving, granting something, they do it first off much like what we are doing with the walnut creek.
we have the base and are never going to change that base.
you have to show us the that ed for improvements and exemption will be above the base that we will discount.
you will never go below the original payment.
we are doing a hundred percent on improvement.
doesn't matter what you improve, the whole thing has gone away.
first off, let's get bexar county out of the way, probably one of the most historical places in Texas, does in the give historical exemptions to anyone period.
there is none in bexar county.
we can set that one of the four out of the way harris , you have to show there is an economic need for the tax exemption to show a plan prior where you will do at least two million in improvement to the property within three years.
the tax break will be for ten years, and they have three properties in harris county that receive historical exemption.
there is nothing, also on that one, they grant nothing for the land.
they are taxing the land a hundred percent.
it's not being given any kind of historical exemption for the land .
dallas county much the same way, have you to show a need for the help.
they are granting, once again, for the value above what it was when you started.
you don't get the exemption, you don't do the improvements and then get the exemption.
you have to show a plan as to what you are going to do, same type of thing in dallas county, nine properties in county that receive historical exemptions.
terant county is basically the same, again, however, they do not do single family dwellings, is not on the table.
it has to be multifamily or commercial buildings.
they are doing the same type of thing.
two for ten years, one for seven years.
don't remember exactly which, I guess I can look real quick.
terant county is doing it for ten years, not renewable.
no single family homes.
they have 205 in all of the county.
so bexar is nothing, terant is 205, dallas county is nine and harris is three.
and you apply before you do the improvements.
the tax break is on the dollar amount of the improvements and no way ever lower than when you got started, so there is a base.
that is what we were seeing with the others counties.
most counties don't do it at all.
yes, ma'am.
>> can I ask you about the dallas county model because you had the code in here.
interesting that they included historical whether for economic gopment or job creation.
but they had performance metrics associated with their historic exemption much as they do for, you get this exemption if you bring 500 jobs here, for historic if you improve a degraded property that is otherwise in danger of disappearing from us.
>> correct.
one thing which I'm going to get to and which elliot spoke to, one of the overriding things is this is not designated as a Travis County historical and mark but a govern be body designating, you have to show a need.
think the exact words are a site in need of tax relief.
so I don't know if that is what has disqualified a lot of these things but there is only nine in dallas county and they do have, I'd like the remind everybody, this starts in the backup about page 180, I believe.
goes on for 150 pages.
whatever we were given by different parties, we were placed in there along with what our own research was so that people can look in to see what other counties are doing, what the historical society recommendations were, what rick harden had for let points.
that is all in there.
we're hopefully going to have that, I have asked staff if we have it scanned to put it in the Travis County tax.org site, but you can get in in the backoff.
>> the language is in need of tax relief to encourage preservation.
so is that a fact finding that needs to occur under the statute?
>> yes.
I think dusty and leroy make an excellent point here.
the statute is really two different tests.
one is whether or not it fits within recorded Texas landmark list.
it's either in there or not.
if it's in, it gets the exemption.
otherwise if you don't satisfy that test, you have satisfy the other tests, which is to create some kind of deed.
and the need does have to be directly connected to trying to improve, excuse me, encourage the preservation of the property.
the way it's add ministered, as dusty pointed out, in dallas county and terant county is quite a bit different than it's done here.
here it's do we think it's historical, and if it is, it receives it.
and we don't really go into the fulfillment that is in the second part of the statute which deals with proving need and proving what is needed financially to preserve this property.
>> the law requires that you meet one of those two criteria.
>> it's an either-or test, judge yes.
>> but required.
>> but required.
>> is what I'm hearing.
okay.
>> I had a legal question that, you know, I don't know if y'all want to, how y'all want to deal with this.
I had a legal question with regard to delegation of the authority.
but we can take that into executive session if y'all want.
if the court wants to.
>> we're going in there on a couple of items. We will take that in consultation with attorney.
john will perk up.
>> we had reviewed what other counties were doing.
we then had meetings, one on December 2, with the heritage society of Austin, which they brought 12 members over to the tax office.
and we met with them and several people of my staff.
elliot was there, peter was there.
had very good conversation.
they had clarified, I had asked them to clarify some points that they had made in an e-mail to all of y'all, which they did.
I thought had a good meeting.
we had a meeting with rick harden, a citizen concerned.
I think he has two or three properties and he has concerns.
all of their data.
unedited, the way they presented is in the backup that we talked about.
you can read it.
sometimes they don't necessarily say the same things, it's two different opinions.
so that is in there.
some of the things we have heard made me want to go a bit further because I think that, I have been here 26 years dealing with this, with y'all, and wanted to review the calculations which basically, doing the calculations, leroy has already spoken to, but my concern was I know that the appraisal district does things in partitions, you can partition the house and have the outbuilding and the house itself and garages and different things.
so I guess my assumption, and you know what that does, my assumption was the historic el properties we were doing just the partition with the historic.
may have started with a thousand feet, now 5,000, a swimming pool built in the year 2000, get houses, some people have told me they built garage apartments they are getting rent from.
I called the appraisal district, how do you do, where does the hundred percent go, and was surprised to find out all of it is part of the hundred percent.
so the swimming pool, the garage apartments, the extra 4,000 square feet, all that is considered to be part of the hundred percent on a home that we're exempting, which was is surprise to me.
I thought that was something that y'all out to also know since this is something that we were coming up with.
so we had gone through the recommendations for the appraisal district and then tried to find a goal for the Commissioners court.
couldn't find where you all had come up with a goal.
so we just created a goal.
I would now like to speak.
this is printed on there.
to what we decided to propose to y'all.
and this is, once again, a group protesting to you.
the Commissioners court will decide.
we decided the goal is to provide temporary minimal tax relief to encourage preservation for the structures meeting the county's historical requirements.
that was just our stab.
obviously, y'all can change the goal to be whatever you wish.
but we did not see this as being something, I guess when you finally look back, that this would be something that goes on forever.
which it is at this particular point in time.
it's something that people are expecting this to be forever.
>> do any of the other en sites do a perpetual.
>> no, nothing we could find anywhere that does perpetual.
as I get down here, you will see we shows ten because that was the max that two of the other counties were using.
not to be perpetual.
when we were talking to the people at the heritage society, they had assumed that in 1970 the commission of said this would happen forever and ever.
I said no, each year the school, everybody, sets what you are going to do.
it's not something you set today for the next 20 years.
it has been that y'all have set the same for all these years, but not that you did it 20 years ago and it's staying that way.
the if first recommendation, after the goal, is to review properties countiwide.
currently this is done by the city of Austin with a few outliers , and we have not researched, with a few outliers all are in the city of Austin.
a multiple number of cities, I cannot believe there's not a historical structure owned in the rest of the county.
these people are not getting the same benefit.
when wegeothrough all the things we do through at the tax office it's all about fair and equal.
the first thing we thought, it should be county wide since you are a county wide organization.
whoever does this, and leroy and I have both said it should not be the tax office or pbo, whatever this organization is should review the requirements of the property tax code 11.4 of which leroy has already spoken to.
either designated a historical landmark, or if this group is going to do that, you all are telling on that, needs to be sure it follows the 11.24 number 2, the site needs to be in need of tax relief to encourage.
just a requirement.
so we want you all to follow the law.
whoever you choose to do that.
so that was our item number 1 is the structure must be designated as historic structure by a recognized organization that will review historical properties within the boundaries of the Travis County.
any questions?
>> I'm going to go back to the other counties that you mentioned that granted historical exemption period.
you mentioned bexar zero and a couple are zero.
how do they get, someone can't tell me san antonio doesn't have historical structures.
I think I would be misled because I think there is some.
>> I'm sure they have historical structures.
>> the court, hold on, I understand.
but the question is, though, according to what we are saying statutorily required, is that something that apparently can be overridden, or are we bound by that?
apparently not by statute.
you mentioned a couple of thing.
>> if you choose to do it.
>> all right.
>> you can choose not to do thi.
>> exact will --exactly.
>> right.
>> this is a choose if you choose.
if you choose to, you need to follow the requirements, one or the other.
if you choose not to, 11.24 is immaterial.
so bexar county chooses not to.
>> the san antonio does, and there are some amazing historic homes there.
and they had serious issues with the urban infull.
so the city of san antonio does it.
>> this is dusty speaking, historical is generally the cities because they have zoning power.
you do not.
you are not able to do those things.
generally people that are pushing, that we have seen throughout this, pushing the historical and can do whatever, is the cities because they have the ability to to zoning and other things that y'all don't.
>> you point that out.
I would also add that historical exemption isn't the only way to preserve historical structures.
as we have seen the exemption didn't preserve west campus, for instance.
that was zoning that changed west u as well as rainy street.
it's zoning that is threatening west u and the historic exemption isn't saving it.
>> needs to be really, you have the public looking at this.
and I don't want anyone to think that we need to flush it out as far as the understanding exactly what we are talking about.
it can be misconstrued, okay, bexar county, da da da.
but within the city, may be different.
I just want to be sure that we don't get caught up in the situation where by the public is misled by what we have authority to do and what we ought to have authority to do.
dealing with cities and all the other municipalities that you mention in Travis County, a big deal across the board.
as you suggested, dusty, it's kind of hard to believe that there is no historic structures in these other municipalities.
so I just want to lay that out and some of the other things I have coming later as far as what are the implications.
I'll hold up until later.
go ahead.
>> along the same line first, it's my understanding that section 318.012 of the local government code gives the county the ability to establish a program to designate historic structures and grant property taxes.
so how does that differ, the municipalities and zoning as opposed to the unincorporated areas that we have the authority to do this in the unincorporated areas as well?
>> good point.
I was going to bring that up later.
>> I will attempt to answer your question.
currently you all have decided to let the city of Austin do that for you.
you could if you wish, from what you just said, establish your own.
I just don't want it to be the tax office and he doesn't want it to be planning and budget.
you can create whatever you wish apparently you have the authority to do it.
you have given that authority right now to the city of Austin.
that is who is doing it for you.
>> therefore, by doing that, we're only concerned about the properties within the municipality of the city of Austin.
>> that is correct.
>> and not the wunds outside.
>> that is correct.
that is why the wording was a recognize the organization.
it can be Travis County doing it for Travis County.
we didn't state any organization.
that is for y'all to decide what you wish to to.
>> it's the law that elliot referenced, applies to counties and not cities?
>> the local government code 318 section does apply to counties as well as 11.24.
I think--
>> also applies to cities?
>> yes.
well, no.
318 is counties only.
>> okay.
>> but the tax code provision applies to any governmental entity.
>> any governmental entity.
one of the things when you are reading through chapter 11 of the tax code, there are some exemptions that are written in stone that you don't have any choice over.
for example, you can't tax a federal courthouse.
it's federal property.
there are some absolute exemptions in that way.
11.24 is optional.
and the section 318 of the local government code, as I read it, it gives you the authority but you are not mandated to set standards for exempt and historical prompt or classifying what is more or less historical and all that.
under 11.24 it's totally optional, to answer your question Commissioner Davis, optional as to whether Travis County wants to grant any historical exemptions at all.
y'all may decide that you don't want any historical exemptions and be like bexar county.
>> and my point though was getting back to when the thing first came up, and that was sometime during last year, 2010, at the time it was discussed back thentrying to get comparisons of some of the houses and home steds as far as what they basically were appraised at and if they were allowed to receive all these things that I think that leroy and elliot brought up, with all of those exemptions from homestead, 65 and over, $65,000 and also the historic exemption, what would that end up being taxable as far as appraisal and what we can tax.
at the end of the day, 147 some dollars as far as taxable income which I thought that then during that time there was something we need to relook at because of, I guess, the taxes that everybody else in the county would have to pick up for the taxes that weren't being paid.
so I'm still concerned about that.
and the zero is something that I was looking at.
I'm not saying I'm going to land there but it's something that is an option I think we need to consider.
everyone else will have to pick up the tax burden when those taxes aren't paid.
so it's, you know, under this historic exemption thing.
I'm having some legitimate concerns about that.
so I brought up the point are we statutorily required.
so bexar county, other counties, zero, da da da, it's an option that I think we need to conside.
>> one of the challenges here, and this is for the Commissioners court to address at a future time or whatever, do we do like dusty has been describing here, do we just kind of follow step for step with what the city of Austin has granted on historical exemptions do we just do whatever they do, or do we set our own independent policy, independent of the city, and if it matches the city, fine if it doesn't, fine.
I think that is one of the challenges we have.
and to do that, we are going to have to most likely address the second part of 11:24, look at need and look at what encourages the preservation and to be able to follow the statute word for word.
>> do any of the other cities in Travis County provide a historical exemption?
>> not that I'm aware of.
I don't know of any.
>> no, I would say no.
the appraisal district gives the information to the city of Austin.
now, under the same local provision you site, I think 318, the provision in the local government code that gives us the authority to establish a county historic commission, which we have.
and they have been engaged in doing research on historic sites throughout the county.
I guess where I'm going, I'm rather impressed with the city of Austin' very proactive stands in the '70s to preserve our history in the city.
I am grateful to our predecessors on the county Commissioners court for having joined in those efforts earlier.
but now I think perhaps we are urbanizing so fast in the unincorporated areas as well as in the other municipalities, the historic e po of Pflugerville there's only two city blocks left.
I know manor is experiencing similar pressures.
one thing about the goal as stated at the top, I do have some, a little bit of heartburn over the word minimal.
and would prefer it to say tax relief sufficient to encourage preservation.
>> these are recommendations to y'all.
you can change them any way youant would.
it won't give my heartburn.
>> we only made it through number one.
I don't know if you are ready to go to number two as proposal.
>> I'm ready.
number two, the second came from talking with the other counties research and talking with tcad because we don't know, as I said it could be a tine yo portion of this property was actually historic but yet we are granting the hundred percent.
two things we came up with, I'll true try to explain.
one was a, let me give an exam, I live in the country and close to me an is place.
they have a Round Rock fence they used to keep horses in when the stage coaches came through.
somebody can deem that as being historical.
and the $5 million home behind it would also gather the exception.
that is where the committee put in the substantial portion.
must be before 1930, pick off straight off harris county, the wunds that use this, and has to do, I could bore you to tears, I don't know that I understand, but it's the construction materials and the methodology prior to 1930 versus after 1930 is different.
those buildings built before the 30s are more unique, if that is a way that you can say it.
our recommendation was a substantial portion of the structure must be built before 1930.
>> I have a question about that.
so under chapter 11, are you, is this policy suggesting that the before 1930 is sufficient to establish, to designate, where is the wording, to designate historic or archeological significance?
the fact--
>> it is your option.
>> if are older than 1930 you are historically or arc logically significant.
>> and it meets the needs.
you still have the two things in 11.24.
about you --but if you are asking me does it have to be holder than 1930, as I understand, yes.
its it has to meet the two criteria even if built in 1900.
>> I am questioning and I think I got my answer.
y'all are saying older than 1930 it is ergo historically or arc logically significant.
but you still have to make the second finding as well.
>> you still have to make the second finding.
>> it's in need of tax relief.
>> as stands right now as an example, and I like to do examples, my parents' home was built in 1955 in the parade of homes.
I lived there and went to high school there.
that could be considered significant.
it's a 1955 home.
it's less than 50 years.
I don't think that my parents home built in 1955, happened to be in the parade, hapts to be significant.
it's been zoned anyway.
that is the type of thing we're looking at.
the committee said 1930 because of these building requirements, the different building materials different methodologies they used on those homes.
that was a break.
that is why we chose that.
you will also notice the committee left a lot of these things underlined so that is real easy, if you want to change the date to a different year.
we picked because harris county, some of the logic they had used.
>> is there a provision, I'm a little troubled by a specific date.
say 1935, you know, xyz was born in this home and ultimately ended up a heroine, and her birthplace is a historic location but yet 1935 instead of 1930 or before.
>> this is going to be y'all's document.
if you so choose and if you wish to have things changed, I'm assuming you can change it.
it's going to be your document.
>> also based on previous experience, when we set up a code provision for Travis County and say it does say 1930 and we do run across a circumstance where 1935 ms. Xyz was born there, we can make an exception to our own policy for that birthplace.
>> that would.
>> I would think it would be within your authority.
like dusty is saying, you can have some kind of exception clause.
some very significant event occurs on this property or somebody born or whatever, you could have that where you can add that.
it may happen in 1960 or whatever.
>> you're suggesting a bright line rule to which we could make exceptions when the line is not so bright.
>> right.
>> 1930 is a triggering date for how many of those four counties?
>> harris was only one that actually used a date that I can remember seeing.
>> okay.
>> although in the graph of the dates of the historic sites in Austin, there does seem to be a significant drop-off after 1930.
it struck me that it was interesting to see.
>> okay.
>> for number 3, the committee felt that it was not wise to grant this economic aid forever.
ten years was chosen because it was highest number used by two of the four other counties.
two of them used ten, one used seven, and obviously, bexar county didn't do anything.iwv that is why ten years, you can also see it's underlined.
if y'all wish to do something, that is fine.
seemed to say that it should go on forever didn't strike the committee as being something that should continue forever.
>> I'd like to just throw out a concern I have here.
I don't have an answer or guideline or anything else.
but the older, many historic properties get, the more expensive it is to maintain them.
so I have trouble with the concept of a limitation.
that kind of dovetails back to what was stated, a better alignment of wealth with burden.
because some of these properties are so expensive to maintain on an ongoing basis, beyond ten years of the tax relief, that I think that we need to some way get a grip on the balance there for the long-term maintenance.
I don't think we should preserve every property out there.
you know, on a scale of 1-10.
but somehow or another woo e need to look at the cost burden of the maintenance and perhaps there is wealth that can help preserve and there should be a way to quantify what is put into the maintenance standpoint of it from a standpoint of tax relief.
>> the problem, I understand what you are saying.
the problem we had was two properties next-door to each other that were each built there 1920.
one has a historical exemption and one doesn't.
identical homes, upkeep identical, we subsidize one and yet they are next-door neighbors.
a lot of homes are older than 1930 and not historical.
they have difficulties also.
also from some of the things we hear, people from newer homes with new growth wood versus homes with old growth wood, maintaining new growth wood is harder because it rots faster on new homes than some of the older homes built with cyprus and that type of thing.
it's something the tax office wishes not to be a part of this.
however y'all want to do this.
>> seems to me what is it we want to preserve, two homes beside each other, one is taking advantage of tax exemptions and the other isn't, do we want to preserve both of the homes.
is one at risk of demolition because it doesn't have a mechanism for relief for restoration.
>> there's a prime example in my neighborhood of a house that fell into such disrepair even though it was quite clearly historic and the architecture alone would merit preservation.
but no one had stepped in to preserve it.
I think that the historic exemption made it possible for their new owners to consider rehabilitating it, where another wise it would have just folded in on itself and been destroyed.
so I think you can argue both sides.
I'm in a delicate position here because most of the exemptions are in 78703 which is smack dab in the middle of my precinct and also where I live.
but I do have to be honest with myself that while there are examples of homes that would not survive but for the exemption making it possible for their rehabilitation, there are also other homes that would certainly survive even without the exemption but they are able to avail themselves of it.
therefore many many homes of friends of mine living in them that I know that the exemption is not the reason the home is still standing.
or the reason that they live there.
>> I think that it's pretty clear in the other urban counties, the preservation and the tax relief has fallen on the city, not the county.
>> yes.
>> right.
>> there's another prime example in our neighborhood that occurred after the historic exemption went into place, where a historic home was in such terrible disrepair and the owner refused to update despite the fact it already had a designation, and it mysteriously burned down so that he could get out from underneath his landmark designation.
>> recommendation number 3 was a structure can receive the historical exemption for no more than ten years, ten underlined, regardless of the number of owners.
once again, this is a recommendation.
it's a stake in the ground.
you may move the stake, throw it away, whatever you all wish.
the committee is trying to bring something forward for discussion.
I'm sure you will have plenty of that next Thursday I do not have a historical home.
>> I always wanted one.
>> the next was if the decision is made timely we can notify all property owners in a timely manner for this year to go into effect.
that is where we stopped last year because we didn't have time before bills were going out to tell people I think the public hearing and others puts people on notice.
certainly for the 560 or however many, we can write a letter if you so desire and give us direction the say we are looking at something different or maintaining, come to the meeting whatever you all wish.
what we are doing for number 4, ten year limit would start January 1, 2011, for the 2011 tax year, the one we are fixing to start right now.
as far as my rules, month I game everybody gets ten years to start even if you have been doing this forever.
that is qualified.
>> you would be grandfathers.
>> yes, so everybody gets at least ten.
>> let me ask you.
it was brought to my attention there's a house bill 3170 adding a 30-day prior to any action written notice in the case of a change in tax exemption status.
we can do that.
that seems a good idea.
I know that, like I said, I have got a lot of very close friends living in homes that I know have tax exemptions on them for historic.
I have tammied --attempted to e-mail them to let them know.
would that be burden sow to send a written notice very soon so people would know?
>> it's not burden some to us.
woo e can identify the ones that have the shun this year--exemption this year.
it's just a matter of using a merge in word perfect and putting it in the mail.
it's not buden some to the tax office.
it would be burden some to draft a letter but we can certainly send it out.
>> when this came up before, some of the things that we're talking about today, we're discussing before this court that appeared to be not enough time to do a lot of things dealing with this issue.
>> it popped up.
>> I understand.
I want to be sure .
I heard everybody saying, hey, we don't have enough time, I heard all of that.
I'd like to know, what would be the time line, wherever we lands where we hear from the public, dool deal with the tax office and all the different moving parts in the scenario, what would be the time line to make sure it doesn't happen again where woo e have enough time to deal with the an appraisal office and everybody else.
I want to be sure we don't run out of time like happened last year.
>> since we brought it up last year we did research this.
>> all right.
>> we were concerned about the effective tax rate and having to repost and all this other stuff.
>> right.
>> we have since now found out the appraisal district will change this whenever we wish.
we could have already sent out bills and would have to send out new bills to all the staff, not staff, all of these people.
>> right.
>> so it's up to y'all as to how fast you wish to do it.
we can do it after we send out bills, we can send out bills, people can pay and we can refund the money going into next year.
we have been told you can change this at any time by the appraisal district.
>> what we have recommended out of planning and budget is that the court have plenty of time as the first public hearing next Thursday to begin that process.
and depending on if in fact that is the public hearing or if you want multiple public hearings, that is up to you.
then once you receiving the input, we would recommend that we bring it back to the court on a Tuesday to go ahead and vote so that we can notify the appraisal district.
as you know, our member over was dated in may of 2010.
>> yeah.
>> the court normally makes that decision in may-june time frame.
so that we can appropriately notify tcad where we don't have to resend bills.
it has been in the news not only on the county side but on the city side.
so I think it's fair to say that the property owners, if they receiving a letter from you saying that there's going to be a public hearing on this topic, it will not be news to them.
I would assume that they already know through the media.
and I do notice the media is here, so I assume that there will be some coverage tomorrow.
in addition to whatever type of notification you want to send to the 560 or so property owners.
>> okay.
thank you.
>> uh-huh.
>> I have a question along those lines too.
is what you are recommending today, has it been coordinated with other jurisdictions?
I believe we had a letter from the mayor in June of last year inviting us to work with the city in reforming the process so that we don't create a system of incentives that aren't coordinated.
>> our charge did not include a charge to coordinate with the city.
we have shared communication with the city.
but we have not been working with that committee that is working on it in the city.
>> so the city has a working group also.
>> that is correct.
>> do we know when they will report back?
>> the paper indicated that they are within the next month, they expect to have the recommendation from their group.
>> hmm.
>> seems like we ought to be coordinating with them at a certain level.
>> the other urban counties do not coordinate with their cities.
>> at this point in time, we do not know what the Commissioners court wishes to do to go be negotiating with anything.
I don't know what to tell them.
we are making--
>> we want to go on record assing with a shining example of collaboration, y'all.
>> if that is what y'all wish, then we will go work collaborate with them.
but at this point we didn't know if you would accept this or anything.
>> it's not too late to collaborate.
>> that is right.
>> that.
>> it would be appropriate to share, to share with the city of Austin what the staff recommendation is at this point.
but it's a point worth of note that the local government code sites back to the tax code provision, and that it's our, it's the county's historic exemption policy, and we have delegated to the city of Austin to make the finding for us.
so, you know, by function of statute, we will have separate policy.
>> recommendation number 5.
you are going through your list.
>> I'm going through the list.
hopefully explain so next week people at least know why this was here.
when we were researching with tcad as I spoke earlier, it was determined all improvements are included in the value subject to exemption.
once again, if there was a thousand square foot historical building and we have now added 4 000 square feet, garages, apartments, guest house, pools, other modern conveniences, they still are getting all of that under the umbrella of historical exemption.
it did not seem appropriate to the committee to include all these improvements and the percentage calculation by historic more expensive properties.
therefore, we recommend a value approach much like what we use for the over 65 and the disabled exemption.
and also the language in number 5 was to clarify the Commissioners courts and other jurisdictions set the amount each year.
number 5 was the exemption will be a value amount determined each year by the Commissioners court and can be a zero that reduces the taxable value of the property land and improvement.
that was number 5.
number 6, having these meeting with other people, can really not see any reason why we were doing something different for residential and commercial and if anything the residential people getting an additional 20 percent on top of it all and larger amount .
number 6 was the same exemption be granted for residential and commercial.
just have it be the same value.
>> how does that square with the peer group?
do they do both?
and the same amount?
>> the peer group, as I said, one doesn't do family houses whatsoever.
>> the ones that give the exemption.
>> of the nine, I think it's all commercial properties is what it gets down to.
>> they don't do residential?
>> because of the requirement, it's $2 million to fix up the prompt, I think they all turn out to be commercial properties.
>> could be at zero, though, as far as as you mention zero--
>> I did because when we spoke to the heritage society, they thought this was written in stone back in 1970.
I wanted to make clure y'all could have the option of setting this each year.
you can just as you set pay races for employees being zero, you can set the exemption as going zero.
>> what would it be if set at zero as far as effective tax rate, should be reduction, what would that be as far as money amount?
do we know?
>> we run that effective tax rate multiple times.
numbers in the reports, some of them reflect back to may of 10, some of them reflect January of 11, whenever we were doing the budget guidelines for 12.
recent calculation showed that the tax effect of the historical exemption is about 1.4 million a year.
>> okay.
>> and that is about 300 million in assessed value.
now, what happens, if in fact the Commissioners court reduced that exemption to zero, that would put $300 million back on the tax roll, which would essentially reduce your effective tax rate.
>> okay.
>> it would not produce wub cent more property tax revenue at the effective tax rate.
what it would reduce your effective tax rate would be by decimal point 0016.
and on your average homestead value of $274,000, that would be an average reduction in their tax bill of $3.51 a year.
>> okaydoes that answer your question?
>> yes, it answers it.
very distinctly.
I needed to know what that was.
>> $3.
>> $3.51.
>> a gallon of gas, in other words.
>> last week.
>> that is important, leroy.
>> very important.
>> don't be little that.
>> I know, it's something.
>> number 6 was the same exemption be granted for residential or commercial.
takes just as much work to keep up, in fact probably more, so just make them the same.
number 7, we recommended that you go to value versus hundred percent, 50 percent.
we decided to look at 1.4 million, if you were to grant as value, what would this value be that you would be establishing.
we calculated that and it would be that you would be setting to keep the same thing, setting $750,000 exemption per property.
this would change the amounts that certain individuals paid.
but overall effect to the county would be the same by granting a $750,000 exemption.
we would still have the 1.4 million.
the committee did not feel this number matched the guidelines established for the committee and therefore we recommended that for 2011 the historical exemption be $75,000.
>> the 750,000 would be if you backed in a hard dollar value based on the current.
>> the current property, the current values of the current properties and the current amount that we were giving, the 1.4, if you back into it, we would have, if you want to do it a different way, it would be a $750,000 exemption per property.
>> and the reason we set it so high is that there are properties on the historical list that are valued, tax assessed for $6.6 million.
and when you look at those values, the average is somewhere between $700,000 and a million.
that is the range you are dealing with, all the way to 6.6 million.
>> residential?
>> residential.
>> and that would apply anywhere.
in other words, just for a flat rate.
in other words, here it is right here, $75,000 flat rate on historical exemption regardless of where that property is.
>> that is correct.
>> is that correct?
>> regardless of what it's located.
>> I wanted to give you a couple numbers.
I don't mean to snow you over, but give you some numbers.
last year the average appraised homestead in Travis County was $272,000.
that is what the average was county wide that you all remember dealing with.
>> yeah.
>> looking at the historical, there are 96 properties that are 272 and below.
there are 461 that are above the average 272.
the highest, and this is now including the buildings, the highest is 24 million.
the low of the appraised value is 30,000.
the median, the number that had the most of, was $636 for the historical properties.
so the majority of them are running at 636.
if you took a mathematical average, it came out to be 986,000 per property.
but that is skewing with this $24 million property.
47 percent, or 264 are commercial.
and 53 percent, or 292, are residential.
just some numbers.
>> when you say the median value on a historically exempt property is 636,000, that includes commercial as well.
so the commercial is skewing that to some degree.
>> median?
>> median is where you count numbers, you know, the most of them are around 636,000.
I think that is what also, in talking to the heritage society, they used a number in that ballpark.
>> so looking at this chart included in backup, median value by zip code, was that median value based on an I praised value or market value?
>> what page is that on, Commissioner?
>> I'm looking.
>> to defer to somebody that wants to answer that one.
I don't have the documents in front of me.
you take yours back.
>> I don't want it in front of me.
>> I'm thumbing through.
it was in a couple of different places.
a histogram that had the median values by zip code.
la la la, sorry.
I should have written down the page number.
>> 636,000 is the median value of historical exemption.
>> I have it on page 83, average value.
>> I see.
>> by zip code.
in which 78703 was 1,42, 338, and in answer to your question, I assume it's assessed value but I am not a hundred percent .
that was furnished by one of the people that gave us information.
>> I would like for purposes of sort of an apples to apples comparison, I did pull the american communities survey numbers for median home values per zip code.
if we could get median historically exempt values for each one of the zip codes just to compare, that would be helpful to me if that is not too onerous.
>> okay.
>> 78701 isn't that interesting to me because it's going to be skewed by significant margin by commercial.
it's the other zip codes.
the other five zip codes.
>> is what you're asking for the median historically designated of home steds.
you would like to exclude the commercial.
that can be done, I think.
>> yeah, if we can.
>> we can exclude commercial, can't we?
okay, that would take out the skewing due to the, you know, downtown congress avenue, $24.4 million commercial establishmen.
>> that would be great.
I'm mindful of the argument on commercial the change in the way we do commercial properties and what we use commercial properties for make historic commercial properties significantly in danger of demolition and replacement.
I'm totally solid on our robust participation for commercial district because knowing that it's, I think we make the finding of in need of tax exemption for preservation pretty easily on those sorts of properties.
>> if y'all want to take these findings, doesn'ted sound like you are going to go with it a hundred percent, about you if --but if you were, this would reduce the exemption for the current properties.
the committee would recommend the savings go toward increase for the over 65 and disabled.
these exemptions have not changed since 1994 when the average homestead in Travis County was $81,250.
now it's 272.
so the recommendation was to change the over-65 and disabled to increase it to 75,000 versus the 65 it is current, as result of these new historical guidelines.
if you chose them all.
>> now, harris county, what are they doing as far as addressing this as far as the disabled?
>> we have in the backup at one place, it was 160,000 for people 65 and older.
I had one documentation they had lowered it to 156 or something.
still it's between 156 and 160,000.
in 1994, Travis County when they set the 65,000 for the disabled and the taxpayers that are over 65, with the average homestead, the tax liability was zero on the average homestead.
of those people that were 65 and older.
or disabled.
that still is the case in harris county.
>> okay.
>> so if we did that, we would, it's not a wash.
we would receive about half a million dollars less in tax revenue, correct?
>> no, if in fact, half a million dollars, essentially, correct me if I'm wrong, is the savings to go to our recommendation.
>> it would be a wash then, right?
>> I'm looking at--
>> almost a million dollars, I think.
if we change the over 65, excuse us, because this has been three months since we went through the numbers.
for every $5,000 that you wish to change on the over-65, it was going to cost about half a million.
>> that is right.
>> so rather than getting 1.4 million, the historical would get about 300,000 of that 1.4.
the other 1.1 would go to the over-65 and disabled, for a net of no change to the county, it's not going to affect the effective tax rates or anything else because it's neutral in all ways, but it would be the historical are going to pay more and the over-65 will going 20 to pay less.
500 properties are going to pay more and 40 will get a reductio.
>> the 1.4 million will cover the increase from 65,000 to 75,000.
>> with the numbers that we have today, yes.
2011 can change things a bit.
based on 2010, yes.
>> I have three or four short questions.
do we know what kind of staff the city of Austin has for this program?
>> I know that, I have been told I say I know, I have been told there's one person.
and I do not know how much help that he gets.
I keep hearing one person's name that is supposed to be trying to take care of this full time.
>> can we confirm that between now and next Thursday?
>> yes.
>> why don't we ask the city's working group if it has a draft report for the city council, to get us a copy of that.
maybe between now and Friday so we have a chance to kind of review that before next thursda.
>> okay.
>> so is it pretty easy for us to notify those who have either the residential or commercial exemption?
we have a listing.
current mailing addresses, we send tax bills.
if we knew what you wanted to say, when we go back today we can start preparing a merge document.
I can't see what the people behind me are doing.
have they fell out of their chairs?
>> all I have in mind is just notifying them that next Thursday, April 14 at 1:30 in this courtroom, there will be basically a public hearing or meeting where they can access the working group's report.
in addition to the county's website, they can also contact tax assessor's office, planning and budget or any member of the Commissioners court for a copy of it.
I just think we ought to try to do that if we can.
>> yes, sir.
>> will that invitation be extended also to the other municipalities of the county?
I'm kind of concerned about not only the city of Austin when we are dealing with this issue, but we have other municipalities out there, according to what I'm hearing, that don't participate at all.
and what are they doing, I guess the question is, what are the municipalities doing.
like in the county, other than the city of Austin, to deal with preservation of historical settings.
how are they dealing with that?
I don't know.
would that invitation also be extended to them because the other municipalities in the county have not participated maybe in this process.
I don't know what that answer is and just kind of curious to see what their participation level would be.
I know there are historical structures in those municipalities.
what are they doing to preserve them.
>> are you asking us, we will be glad to do it.
to call the city manager of each of the municipalities within Travis County?) Change in captioner.
stand by)
>> what has stir this had up is about two years ago they had a big rush on the city and did 40 or 50 or some huge number.
it had gone along fairly flat and there was a big peak.
there were agents outgoing and saying I will represent you and I'll get you this historical thing, so they really peaked and their city has tried to stop that by saying three a month, I believe.
so it shouldn't be more than 36, if my math is good.
>> court members, Commissioner?
>> I have several questions that didn't quite fit in with the flow awhile ago.
first of all, were there any review by this committee of the positives that come from preservation, like the increases in adjacent property values and job creation and preservation process?
because that's a dollar big that seems to be important in the mix.
>> the heritage society spoke to increasing of my value, increases the value of the neighborhood association and we spoke to that as to the values going up, the effective tax rate.
you set the tax rates down, so increasing values are -- really have no effect because the values raise, the tax rate depose down, you get the same amount of revenue, so it won't bring in the revenue to the county for that.
they talked about $140 million or some number like that that was brought in due to this.
well, the county does not get any sales tax monies off of that.
so we address it had with the heritage society, but beyond that, no.
values increasing, effective tax rates -- the tax rate is going to go down.
so we didn't see how -- I didn't have anybody tell us that they were creating jobs by this.
I guess if they were working with contractors or something, but we couldn't find, talking to the appraisal district, that there was all that much work going on to these homes.
>> and also creating a sense of place that gives dynamics to the entire area.
I guess one of the questions -- another question I have that is sort of semi related, and this is probably came out of the Commissioners rather than your group, but it appears we didn't have a preservation professional on the taskforce itself, someone who is really knowledgeable.
>> you assigned people to the committee, so that was your task.
>> it may be or error.
it would seem like a true preservation professional would have a broad horizon from a different perspective as a stakeholder that they could have brought some additional information to the group.
also, has our Travis County -- you keep talking about heritage society.
was the Travis County historical commission, have they had an opportunity to review and make recommendations on these -- and provide guidance on your recommendations?
>> under my understanding of what we were tasked for, we weren't going out and talking to a lot of different groups.
we put together a program to bring back to y'all.
as I said, I still don't know for certain that y'all even want to do this, so I didn't want to start stirring up other organizations and whatnot speaking as representative of Travis County on something we didn't really know if that's the way you wanted to go.
>> but the charge went to tax equity, not to historic preservation.
at this point perhaps we should look to task a separate entity with looking at historic preservation on a county wide basis and what would be the best model.
>> I don't think it is tax equity too.
one of the things that bothers me -- I think we have to lay a groundwork and build on it.
inch you've done great work what you bring here today.
when I think about what houston does or what dallas does and the comparisons, I have a sense of different cultures and different cities and ways in which they've grown.
and I think that we need to be mindful that we are Travis County and we're not seeking to just follow someone else's perceived lead in a category.
there are other places in the country that have good records of historic preservation and I suspect good programs related to historical tax exemptions.
I would hate to see us just look at the four big urban areas in Travis County if we've got other models out there that we should consider in the mix of this.
we have to start somewhere and we've started somewhere, but I don't see our work is done here, quite frankly.
>> I do think we ought to send the historical committee --
>> the Travis County historical commission.
>> make sure my name is not on the report.
>> we'll be glad to forward the report and the recommendation, tentative recommendations to the court to anybody that -- now, I would caution you.
the backup, even in the committee members, when I sent it out electronically there will be a link on the tax assessor's website to -- for people to access this.
but I can tell you that gmail and yahoo will not receive this document due to the size of the document.
and hi to hand carry and u.s.
mail copies of this to the committee members that were not within Travis County email capability.
>> maybe we could ask its to breakout the backup into discrete parts so people could download the parts they want.
that that'll make you go what the?!
it easier for accessible purposes.
I want to point out that it is of note that the committee is recommending that we essentially freeze the current circumstance for 10 years.
that's essentially what you're saying, starflight everybody who currently has an historic exemption would have it for the next 10 years, so the status quo would be preserved for 10 years.
>> the three would be under the recommendation at 75,000 exemption.
but you are right, the ones that are currently in being designated by stint historically would retain that for the next 10 years.
>> yes.
>> his recommendation.
>> that's just the recommendation.
>> we haven't decided on that yet.
>> right.
>> we'll see.
>> something from y'all to start with.
this was just presenting it, the first time y'all have got to hear anything we've said.
>> exactly.
>> got to start somewhere.
>> it would gb to find some sort of credible information about the effects of preservation on local councilmember alvarez.
I did read some of the references that the heritage society had provided, but they don't seem to be perfect apples to apples comparisons because they're to other areas in other parts of the nation predominantly that have -- that are utilizing different packages of tools.
>> the historic preservation and its main street program under that, particularly as it relates to commercial, there's a lot of research, a lot of data that I'm sure that it addresses the tax components of it as well.
it's been a number of years since I worked with that.
I think there's a wealth of resource there that's worth at least picking up the phone and calling.
>> it would certainly be good to look at those as a model for a county-wide historic preservation program.
again, I'm a little -- we should definitely look.
I am a little concerned that counties in other parts of the nation have a much different tool box with which to work.
>> yeah.
I think that some of the public next Thursday will comment on some of those areas such as boston and how many -- because we did receive some input on the committee and I think y'all be surprised at some of the most historic cities in the nation, how many are designated.
>> did you finish your questions?
court members, any other comments?
any comments from any of the working group members?
>> I do have a legal question that I will like to ask in executive session when we take number 26 in there also.
>> okay.
we will take it in there.
we appreciate the presentation.
next Thursday afternoon we will give the public an opportunity to give comments, and I guess we may need like a five minute summary of the report to start that.
can we get that in the Commissioners' court does not disrupt you?
>> we could perhaps summarize the recommendations of the committee to begin the public hearing.
>> is there a way for to us have copies of the first four pages available?
hard copy maybe here?
>> we'll have --
>> it's a summary, the first four pages.
>> I have some here that I can leave on the table in case anybody is here that they would like them.
I think that dusty could post it on the website and break up the report, I would assume, in the various things where it's not so lengthy.
>> I'm thinking of those who may present and think of the report and want to see what it's about.
>> sure.
>> these first four pages really represent a pretty good executive summary.
>> that's correct.
we will have -- I have about 25 copies on the table now, and we'll post that also on the website.
>> okay.
thank you for your dedication and your hard work, etcetera.
>> thank you, dusty and leroy and all y'all.
thank you very much for your report.
>> we'll see more of you next Thursday afternoon.
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