Travis County Commissioners Court
Tuesday, May 17, 2011 (Agenda)
Item 15
Now number 15 is to discuss and take appropriate action on recommendations made by the local tax policy working group especially regarding tax exemption for historical structures.
and let me announce that after this item because I know there's several people probably here, after this item we will call up item number 12.
the matter involving the domestic septic waste treatment project.
good morning.
>> good morning.
leroy nellis, Travis County budget director.
I have with me dusty knight from the tax office and elliott from the county attorney's office back.
members of the local tax policy committee did attend your public hearing, and we did listen to what is taxpayers were saying.
and we have come away with a couple of observations from that hearing that we would like to share with you.
number 1, we believe that there was a case made that commercial properties were at a considerable economic disadvantage in this community in competing with other more modern built commercial buildings and office and retail space.
I think the case was made by a gentleman that actually justified perhaps leaving the commercial piece of your current policy in place.
as you are well aware, the commercial property is not eligible for the 20% homestead exemption that all homesteads in Travis County benefit from.
that gives homestead owners over $20 million of taxpayer relief on their homesteads including those that are currently designated as historical that receive additional exemptions currently under your current policy.
there were several citizens, taxpayers that talked about the increase in the value of the homes in the neighborhoods as a direct result of fixing these historical homes up.
there's no question that the assessed values of the community increase when there are improvements to homes, especially those that are historical.
so we wouldn't refute that fact.
what we do refute is the implication by many taxpayers that that increases your tax revenue.
as you are well aware, the effective tax rate, when assessed values go up, the rate goes down, and the total tax revenue stays the same.
so that's a clarification that's important from the county's perspective.
there were comments about the dollars brought into this community through tourists coming in and looking at historical homes and historical commercial properties.
there's no question that we do have tourists come in, but the confusion was Travis County does not have a sales tax so they get no benefit from any type of sales that are generated from any one tourist business.
we do not currently have a hotel-motel tax so we don't get a piece of the hotel-motel revenue.
so unlike the city that both derives income from sales tax and hotel-motel tax, Travis County does not receive any -- any revenue.
so although the point that was made that historic homes do bring in additional revenue, that is absolutely correct.
the amount I'm not sure.
but I do know Travis County does tonight benefit from that in the way of additional revenue.
so that was an important thing.
>> Travis County government does not.
but if you look at the fact that just under 60% of our residents reside in the city of Austin, the benefit would go to Travis County residents that live in Austin.
>> right.
what percent live in Austin?
I think Austin's population is between 700 and 800,000, and the Travis County population just crested a million.
so between 70 and 80% of all of the people in Travis County live within the city of Austin.
>> my only point is Travis County government receives no benefit.
but to extent the sales tax revenue benefits city of Austin residents, county residents who also reside in the city of Austin would enjoy the same benefit.
>> right.
there's no question from the public testimony from our viewpoint that there is some incremental amount of maintenance cost on an historical structure versus a more recently built structure.
and there's some justification in our mind that there's some additional cost that these homeowners bear that perhaps should be subsidized by an exemption.
you know, our recommendation recommended a $75,000 exemption for historical.
we do have, as you are well aware, an issue on -- under the current guidelines where you are parallelling the city of Austin's historical designations, you do have the issue of the statutory requirement to show need.
there is an exception in -- or a provision in the statute that if in fact Travis County were to -- to base their historical status based upon the state's historical designation and not the city of Austin, which about 169 of the properties of the 560 are designated currently by the state, then there is no statutory requirement to show need.
so our -- after we heard the testimony, kind of looked into it a little further, we would recommend that the court use the state designation as those properties that qualify for the Travis County historical designation.
that includes not only inside the city of Austin but inside the entire Travis County boundaries which would address the issues outside in some of the northeast and the east parts of -- of the county and the west.
anything outside the city of Austin.
so that's one thing that comes -- was very clear, that you avoid the potential litigation that's currently filed against the city in the lack of showing need.
and to my knowledge, the city's task force did not address the issue of need in their recommendations to the council.
so they still have some exposure whatever that is.
>> so if we follow the state's program, what would we do about the exemptions already in place?
>> you would take the 169 exemptions that -- the ones the state has historical exemptions designations and the rest of them wouldn't get it.
>> so you just cut those off.
>> cut them off, yeah.
>> Commissioner.
Commissioner Davis.
>> thank you, judge.
one thing we did ask during the public hearing, and I wanted to make sure that I was expressive enough to reveal, I asked the question that when persons did come up to testify before the Commissioners court, I wanted to make sure that they disclose their apraised value of their particular property.
and, of course, some of them were able to do that, and a lot of those particular apraised properties that had -- was trying to seek the historic designation either have historic exemption designation did suggest that their apraised value of their property was exceeded a million dollars.
so that still is, I think, part of what we're looking for is to see exactly what those appraised values of the property.
you mentioned earlier about one person that did come in as far as the commercial side of these things.
we did have another person that expressed some of the same sentiment as far as looking at a case-by-case basis on commercial properties, looking into those situations.
another one the victory grill.
I wanted to make sure that victory grill, which the person was here to represent that, was also looked at as far as some of the commercial end of these because it is -- seemed to be a hardship on that.
but anyway, I just wanted to basically lay that out to make sure that during the process of the public hearing it was certain things that we asked for disclosure purposes, and then there were those that really didn't have an idea, but that's why I said the last appraised value, what was the last appraised value because we go through this process the values change as far as appraisals.
but, of course, that was disclosed and I want to make sure that is something that we had to look at.
>> yeah, the average values, as I recall, from the study, or the average values are somewhere around 700,000 per homestead with the highest being 6.6 million.
>> 6.6.
okay.
all right.
>> Commissioner Eckhardt.
>> I also noted that the median value of homes immediately adjacent to 78701 that have historic December nition from 65% to 122% higher than the same homes in the neighborhood.
>> yes.
>> be that as it may, I think that there is a case to be made that there is -- that a finding can be made that a property, an historic property is in need of tax relief to encourage its preservation whether it is a clarksville clapboard or whether it's an historic mansion along holly street, the holly street, first street area.
but I want to dove-tail on what you are saying with regard to the determination that an historic property is in need of tax relief to encourage its preservation.
that's the actual wording from the statute, that the property must be in tax relief to encourage its preservation.
I am concerned about our program for two reasons.
one is that it is not countywide.
we only have two properties outside of the city of Austin that are designated historic.
and two, that our program does not make that finding.
you are correct from a legal standpoint we are not required to make that finding if we adopt state -- only state designations.
but what I'm concerned about taking that route is the -- the Texas historic commission has had its budget cut by more than 90% in the house budget bill.
it's the Texas historic commission on whom we would rely to make these designations and sounds like they are only going to have is budget to keep the lights on and paper clips in the drawer.
in the areas outside the city of Austin for our -- for our historic preservation goals outside the city.
and we've only been able to accomplish I think certainly less than a quarter of the survey necessary to identify historic properties outside the city of Austin.
so those are the two things that I would like to address, and to the extent we could address them today or at least move staff toward addressing them, I'd like to do that.
I -- I would -- I would like to move that Travis County recognize federal registry --
>> that's a motion?
>> yes.
>> out of order.
>> then let me discuss what I would like to do to come to a motion.
I would like to finish the statement, judge.
>> we were interjecting questions --
>> then I will ask it as a question.
>> then please do so.
you haven't done it yet.
>> it is legal for us to accept a designation from the state or the federal registry without a finding.
is that correct?
to accept an historic designation for the purposes of tax subsidy for the state or from the federal registry.
>> yes, we can accept that.
>> with regard to the second part of 11.24 in the tax code where it says a local governmental entity can designate an historic property if it makes a property is in need of tax -- the exact word, in need of tax relief to encourage its preservation, has -- has the county established a minimum criteria for finding that a property is in need of tax relief for its preservation?
>> no.
my understanding of the way this program has been administered is that we're not looking at that at all.
we're doing what the city is doing.
>> but we don't have to, correct?
>> right.
but if we go our own way, we're right now with the exemption we are exempting approximately $1.1 million in tax revenue to the county.
>> but my question is we don't -- we could choose only to accept municipal historic designations that adopt our criteria or something greater for determining need of tax relief for its preservation.
>> yes, but I would point out to the court that if the court wants to do that, and that's certainly within your power to do that, we're talking about new ftes.
>> listen closer.
if we only recognize --
>> if you need -- if we need a legal briefing on what the county is authorized to do, we really ought to have that in executive session.
historically we have relied on the city of Austin's determination and we all know that and we've discussed that at length for the last six months.
>> that's why I'm asking for a middle path, whether it is feasible.
it's not additional f.t.e., it's only we will recognize municipal designations if they meet or exceed criteria that we set.
we would not be doing the designation, we would only be recognizing municipalities that make a designation that include our criteria or something above.
>> well, those municipalities would not be the state agencies mentioned in the first part of 11.24.
>> they would be the second part.
>> the test would have to be met which means that some criteria -- there's going to be an administration of number 2.
>> and we would be relying on the municipalities for that administration.
in consideration that the municipalities are getting sales tax, venue, statute taxes off hotel-motel and whatnot to off set their administrative costs for doing this.
>> if I'm understanding the question, what would then be asking the cities to do is administer the need part of the test.
>> correct, because what I'm after here is rather than say city, you don't have a finding so we're not going to play ball with you, let's be part of the solution and help determine what a floor finding would be.
and I throw this out as a stocking horse.
>> any other questions by Commissioner Eckhardt?
>> no, none other than I can force into a question format.
>> mr. Priest, we will call on residents in just a minute.
we're going to let the working group finish its report, then the Commissioners court will have an opportunity to ask the committee any questions it has.
then we will take comments from residents who have come down on this item today.
mr. Nellis.
, if you would complete your report.
court members, I think to the extent we need to interrupt mr. Ellis to -- mr. Nellis, ellis and nellis, to ask questions, to ask hopefully clarifying questions, we ought to.
otherwise we ought to let the committee give its report.
>> I said nellie before and it's really nellis.
leroy, I have to apologize.
>> I think you do have the backup for the agenda item that had the original committee's recommendation mentioned one modification to that recommendation, which involves a commercial -- commercial properties that we really believe that existing policy should stay in place.
for commercial.
on the residential side --
>> with or without a finding of need of tax relief?
with or without a finding of need for tax relief?
because the current policy has no finding of need for tax relief.
>> well, we believe that any of the designations unless the properties are already certified by the state, and I'm not sure, dusty, do you know if the commercial properties hold the state designation in.
>> I believe so.
>> okay.
it's our understanding at this time that the commercial properties on the historical roster --
>> hold on.
>> well, okay.
we obviously would want the need requirement satisfied.
there's no question we've got to satisfy.
>> but isn't the answer whatever we do, we ought to comply with the applicable law?
>> that is correct, and that is the position of the committee.
the other point I wanted to make is that Travis County relies more heavily on property tax revenues than the city of Austin.
I don't have the percentages, but I think we're somewhere between 68 and 71% of our total budget being property taxs.
I think the city is about 10% lower than that on property taxes.
in addition, the city gets the sales tax.
they also do $103 million per year transfer from their public utility.
we don't own a public utility.
so we have less funds and we are already subsidizing or giving tax relief to homesteads at the tune of $20 million a year.
and in talking with elliott and dusty, the subcommittee that's worked on this the hardest, we believe that a fair recommendation going to what the historical -- the heritage society has recommended to the city that they cap their historical exemption at $2,500, I believe is the recommendation, that -- and the city does not give a 20% homestead exemption, well then it would be reasonable to say let's use what -- what seems to be fair from the heritage society, 2500, and deduct the 20% homestead exemption.
therefore we are at least giving tax relief to the home -- the homes that have historical preservation status at the same dollar amount as the city.
and it seems like an arena thing to do.
-- a reasonable thing to do.
I understand that it doesn't give the same monetary benefit to the high end of the homes, but it would -- when you talk tax equity, you would expect that the homes that with the assessed value near the bottom, and there are some that have historical designations that are lower in price, that they would need the most exemption and tax relief to preserve their historical homes.
that's kind of where -- dusty, do you have anything else or elliott to add to that?
we did, I must say, it was very informative for the committee members, and I think we have susan was here, several members of the committee, but they did watch the public hearing and we did listen and we tried to integrate the public's comments into our recommendations.
and we're here to answer any questions.
>> questions, court members?
>> well, I guess the only comment I guess for clarification, then, by addressing the 20% homestead exemption, we are addressing the benefit that homeowners receive from Travis County.
it does not receive that -- they don't receive that benefit from the city of Austin.
and so to me the 20% homestead exemption to each taxpayer is a tremendous benefit to -- I mean if it costs us $20 million to provide that benefit, then there is tremendous value to that benefit.
and so -- and it's a benefit as well as a cost to us, right?
>> sure.
let me mention one other thing.
the real bottom line question that I would think you would want to ask is if, in fact, you reduce your current amount that you are allowing for an historical exemption, if you reduce that as the committee has recommended for residential properties, will that result in historic properties applying to undesignate their properties and not be protected.
I would -- I would ask you or I would ask someone, did -- when aisd completely eliminated the historical exemption, how many of the 560 plus historically designated homes applied to take their historic exemption off.
and I believe the answer is zero, but I will stand corrected if somebody has that.
if, in fact, that is the case, then the reduction of the historical exemption will not significantly affect the historical preservation of these homes in this community.
and that's what the exemption is supposed to be about.
the -- the -- aisd's tax rate and acc's tax rate combined exceeds the city of Austin and Travis County's tax rate.
so they took a bigger hit with those two exemptions than they are going to take if, in fact, you follow or modify or modify.
the city of Austin has had a cap on the dollar amount of the historical exemptions in the past.
they grandfathered some of the older things.
we have not -- we don't have a cap.
right now there's no cap on that $6.6 million house.
>> leroy, if you suggest that there was no impact by aisd eliminating that, is there not a tipping point?
if we then remove ours, that that might push those to withdraw their designations because they've already lost a significant amount and yet they are still losing more?
>> I think there is the possibility that additional reductions could influence that.
now, what I do not know is the procedure for undesignating properties with historical exemptions.
and furthermore, the 169 with the state may be much more difficult to undesignate than the ones that are just through the city of Austin.
so I -- I agree that if you reduce it too much and it's too easy to undesignate, you may have some property owners that undesignate, and that's not the intent of the committee's recommendation.
so I think you have touched on a point.
the question, in my mind, is what amount is reasonable to cap the historical exemption, and do you off set it against the 20% you are already giving.
I mean, those are the questions.
>> any other questions for the committee?
>> yes, sir.
>> Commissioner Eckhardt.
>> yes, sir.
>> my favorite precinct 2 Commissioner.
>> since we are supposed to be deliberating today on this item, your recommendation, if we were to go with your recommendation regarding taking the city of Austin's cap and reducing it by the 20%, you are only recommending that if the city of Austin adopts an in need of tax relief finding.
>> that's correct.
>> are you continuing to recommend as you did previously that the duration of the tax subsidy be also limited?
>> yes.
we have not -- with the exception of the items that we mentioned today, we are staying with our original recommendation that we do believe that a substantial portion of the structure must be built before 1930.
we believe that the exemption ought to carry forward for ten years from an effective date.
anyway --
>> now, the city of Austin's recommendations don't hold the 1930.
so is -- I mean under the city of Austin's recommendations, then I frankly feel that there are properties that are historic that were built after 1930, as we get further down the road we will have amazing architects operating in the city of Austin in the '50s doing incredible architectural work and we may want to be preserving that stuff as well.
so with regard to -- going back to duration cap though, if there is a finding of in need of tax relief to encourage its preservation, could not that duration be extended if there is a subsequent finding after ten years that the property is still in need of tax relief for its preservation?
for instance, commercial properties made a good argument that their need for tax relief is ongoing because of the considerable economic disparity in the market for retail space and office space.
>> uh-huh.
well, I believe that the court can obviously take any of the recommendation, and if, in fact, the court would like to augment those recommendations with any type of modification, I think the committee has made their best effort to make a recommendation that we felt as modified by the public hearing that made the most historical and economic sense.
and we did tie that to the recommendation to take the savings from the recommendation and augment, increase the 65 and older and handicapped exemptions from 65 to $75,000.
>> and let me ask you about that provision because one thing I have been concerned about with regard to the Travis County historic commission, and the committee spoke with the Travis County historic commission as well, right?
not the heritage society, our own Travis County historic commission.
no?
I spoke with them yesterday.
they will probably need about $100,000 in additional fund to go complete a survey of the full county to come up with county preservation goals outside the city of Austin.
>> does the working group have that kind of money?
>> did you bring your checkbook?
>> the point being that adjustments in the historic home tax subsidies inside the city of Austin that realize additional funds.
of course, this is a shifting of funds.
and as it's been pointed out, this isn't about more general fund revenue for Travis County.
we're just moving it from one side of the county to the other.
this is a question of shifting burdens.
>> uh-huh.
>> any other questions?
the question -- I've got three or four.
>> the question is leroy as a representative of the p.b.o., would it be even possible to use the increment on any adjustment in the -- in the tax subsidy for a countywide survey?
>> the -- the mechanism, correct me if I am wrong, dusty, is that when do you away with an exemption, you are reducing exemption, the benefit of that goes into the calculation of the effective tax rate which would lower the tax rate for every property in Travis County.
now, the reason the committee recommended that you join these two recommendations together is if you decrease one exemption and you increase another exemption, I believe the net effect is zero on the effective tax rate.
and so in answer to your question, the 100,000 that the historical commission needs, Travis County, would be an expenditure which we would need to budget.
>> previously the historic commission has utilized state funds or pass-through federal grant.
>> yeah.
>> drawing up.
>> court appropriated some years ago the study in the manor area for the survey on the historical that they --
>> I believe that was a federal pass-through grant.
>> we did some type of match I think on the general fund side, but it was small numbers.
>> I have three or four questions.
where is the city of Austin in its working group work?
>> to my understanding that the city committee made a report to the council, and I'm not sure what date the council -- the council has not, it is my understanding, taken final action on that report.
>> what is the deadline for us to notify the appraisal district as to what we plan to do?
>> dusty.
>> generally speaking we come to y'all in June to allow the appraisal district time to get this into the certified numbers that they certify the appraised values by July 25th.
we have been told by the appraisal district that we could delay this.
it would have an effect on the numbers whether do you want start the whole effective tax rate thing later in the career, that's up to y'all.
it can go until you don't make a decision until December and we would have to send out new tax bills but it wouldn't be redoing the effective tax rate as should be required.
so it just depends.
if you want to do it right in time before the July 25th certification.
>> because the effect of doing it after the tcad certifies the roll on July 25th is that it substantially affects the statutorily required ads ads on the budge that's have to appear.
and if in fact you delay the adoption of your adopted budget due to the fact that you have statutory adds that do not have the time limits available to put them in and you delay the adoption of your f.y.
12 budget past September 30th or the last day, last Tuesday in September, then you are automatically have to take that budget to the effective tax rate.
and that is substantial.
>> okay.
>> we would -- our recommendation from p.b.o.
as budget director would be to have the court make your decision so that we can communicate at least two weeks before the 25th of July so that tcad can integrate the calculations into their tax roll in order to certify it with whatever you decide inside it.
>> so the answer is it's best if we do whatever we plan to do by July 10th or 11th?
>> that's correct.
>> okay.
does the state program have a ten-year time limit so is it indefinite?
>> the state is just a designation, it's not a time frame for giving an exemption.
>> the problem is if you lose a home or something.
>> yes.
>> what I recall from our public meeting is that residents complaining that in fact we are not giving enough weight to preservation of heritage.
that's true, isn't it?
we really kind of looked at the tax impact.
>> well, the committee did evaluate as to what we believe would be the effect of the recommendation.
I mean, we didn't make that purely on a financial decision.
if, in fact, there's no decertification of the historical structures in Travis County, from our viewpoint, the only justification for giving an exemption and a reduction in tax is the incremental value of what it takes to maintain one of these structures over a normal house.
an undesignated structure.
>> okay.
I'm about to get to them.
I had one more.
it must not have been real important because I forgot it.
>> [laughter] Commissioner Davis.
>> thank you, judge.
leroy, for the public's benefit, if you do not mind, again, to illustrate what you did during the public hearing, looking at a house, a home that may be appraised at let's say a million or so dollars, and this particular home within Travis County has homestead, of course, exemption.
it also has historic exemptions.
and, of course, you look at the value of the structure and you look at the value of the land.
and after all of those particular things have been subtracted or extracted from the particular sources that I just mentioned, what would the tax -- what was the illustration, if I can recall, as far as what will be the actual tax on what's left to be taxed.
>> to be taxed.
what we distributed during the public hearing and went over was a chart, as you recall, that showed what the Travis County tax effect on a -- and we just picked a million dollars because it's easy to do something that's got a lot of zeros.
city of Austin, Austin independent school district and the total tax bill.
on an assisted value in Travis County of $1 million, assuming it's a homestead, that would be a $200,000 exemption for the homestead.
we assumed that the person would be over 65 years old so they got 65,000 in Travis County for that.
the historical exemption on that, we made an assumption that the land was -- that land was 700,000 and the structure was 300.
it's just an assumption.
under those assumptions, the historical exemption would be $650,000 under your current policy.
you would have a taxable value on a million dollar homestead of $85,000, of which the property tax due would be $358.
that was using a '09 tax rate of 42.15.
it would be a little different now.
so anyway, that -- that same property without an historical exemption would pay $3,098.
so the difference, the total on a million dollar homestead with those assumptions would be the dollar historical exemption would be $2,740.
>> that would be the difference.
>> that's the difference.
>> without the --
>> I pay more taxes than that.
I pay more taxes than that.
>> that is really significant.
but I just wanted to make sure you lay that out.
so at least we'll know what we're talking about as far as dollars are concerned.
and that's a good illustration.
thank you.
>> mr. Nellis, if we could get to you move to this end.
>> I have --
>> and we have additional questions before we call on residents, but we're asking residents to take one of those three seats.
if you all would remain, dusty, just in case there are questions that you have a mike readily available.
Commissioner Huber.
>> as was mentioned a minute ago asking a question if the Travis County historical commission had been consulted and I remember at the work session we specifically asked that they be consulted as far as this goes.
so I really think we should have some followup with that.
for their input.
>> just so you have it, this is what they provided to me.
the state goal for preservation.
they are working on them.
>> it was also suggested at the work session that we look at some of the nontexas incentive programs, specifically the national trust for historic preservation is probably a source for that.
because there are other parts of the country that have been doing this a lot longer and perhaps have programs that we should at least bump up against before we make our decisions.
I think that there's no question that there's some issues here that need to be addressed, but I would hate for us to make some quick decisions just because of a deadline that may preclude some better components of our plan.
the other question that was raised at the work session that I recall was that there may be some federal grants for historic preservation that if our program is not in alignment with may preclude the ability to get those.
so I think we need to take a look at that.
and then the -- your comments about sales tax.
I just want to note that we still are entertaining at some point perhaps doing a hotel-motel tax.
so when it relates to tourism it could impact us in the future.
I just would like to see us address those things before we make a final decision.
>> any other questions, court members?
>> yes, judge.
one question.
my goal -- this thing has been around here for a while.
this is really about the second or third run around the track on this item or this issue.
and, of course, I heard exactly what staff is saying now.
last time we looked at this item, it was too late to deal with it as far as giving the court coming up with a decision.
now we have an opportunity to look at what we need to do.
I think p.b.o.
explained it better along with dusty from the tax office who explained it very clearly to me, especially if we need to work within some type of time structure whereby we are tuned in with the appraisal, with tcad.
so I think those deadlines are something that we need to adhere to.
like I said, this thing has been around the block several times.
and if July the 11th is the appropriate time for us to take action one way or the other -- I don't know what the final out come is going to be.
we don't know that right now, but we've heard some pretty good sound recommendations that's been made by this court.
I've heard from the community on several occasions, I'm ready to make a decision and my decision will be heard on July 11th.
but I just want to make sure everybody stands very clearly I'm willing to make a decision one way or the other on this particular item in July.
>> [one moment, please, for change in captioners]
>> I don't think we can continue to fold your hands and say you don't have one so we're not going it play.
I think we have to suggest one.
>> Commissioner Huber.
>> and the second is I don't know -- and I'm asking you how should we proceed with that?
will you entertain a motion to have staff bring back recommendations for such a definition in the ample time before July 12th or can we just direct staff?
>> if you're asking me I would get mr. Beck to pull a law book as soon as possible, find out what the legal requirement is on that and advise us in executive session.
>> well, respectfully thing we know what the legal requirement is.
>> but I normally rely on our lawyers to tell us.
>> but please, just bear with me for a moment.
I think that in order to come up with criteria for in deed of tax relief for its preservation, we need economists, real estate folks and preservation specialists.
the law claims it's in need of tax relief for its prvetion.
that's all the law we have on it is that phrase, quote unquote.
and that's it.
am I correct?
>> so the words have been given meaning in case law and probably practices and if we want legal advice we ought to get it in executive session.
this is not the time -- thts not the time to get that.
and -- you asked me how we should proceed.
we ought to ask questions of staff and get residents who come down on this issue today an opportunity to have their say.
we previously announced earlier that we would give direction on how to proceed, and so with the five of us here and our habit of not moving fooft, that will take some time.
but if we were to do that this morning, I think we ought to do is ask whatever additional questions we have, then listen to residents and then give whatever directions we can and then take whatever time we need to do it.
>> and here is my second question.
as I said at the beginning of the conversation is my two concerns is that the county's program is not county wide and they have no criteria for making that finding.
so with regard to the first that the county's program is not county-wide, what would you suggest procedurally as far as getting some proposal for establishing county-wide goals and a timeline in advance of July 11th or 12th?
I don't think that we can make this determination without having at least some idea of where we're going in a county-wide program.
>> who are you asking?
>> I'm asking you.
>> then you're out of order.
let's ask staff whatever questions we have, then hear residents and then do directions.
I'm a politicians.
I've got a answer to every question and a long one to that, but not at this time.
I think we ought to take advantage of the three people who have been working on this for us, then we ought to hear the residents who have come down and then we ought to try to give direction as best we can.
if you wanted my opinion, before today would have been a whole lot better.
however, if after today is fine, that's fine too.
in my view the issue and need is kind of premature at this time.
if we go with the state's deal we don't address the need at all.
if we don't address nothing we don't address need at all f we don't do need we need to talk to those who have been trying to do this and get input from them.
there's language in the statute and then there are probably a world of cases, world of people with experience on it who people can help us.
what was your second question?
>> that was the second question, how the county should do the county wide goals and how to accomplish them.
I don't believe our tax team is the -- the staff best equipped to respond to that.
>> at the appropriate time today I'll give you a long answer, I guarantee, in a few minutes.
residents who have come down on this item, please come forth at this time.
Commissioner Huber?
>> my mine is a question.
do we know the timeline that the city of Austin is working on in completing their program?
>> I do not.
I do not know.
we will find out and bring back at the next -- we'll email you as to what that timeline is.
I do not know, but we can find out.
>> is your committee working with any staff at all at the city of Austin in exploring this.
>> we're not currently.
we have made our recommendations.
the city has made their recommendations, which are public, and I think if the court could -- we have modified our recommendations based upon what we read about the cities and what we heard in the public hearing.
so to the extent that the court would like to modify any of our recommendations, we believe that we've fulfilled the charge of the committee when we delivered recommendations to the court and we're glad to do supplemental work based upon additional information.
we'll be glad to get the timeline to everyone.
I was in a meeting yesterday with the city of Austin on a different meeting than this.
>> that's real big, mr. Nellis.
five times.
there's another seat.
this is not the time to be shy.
as one resident finishes, if you would return to the audience we'll have anybody else who wants to speak come forward.
let's keep those seats occupied.
if we would start with mr. Priest and work our way to the right.
>> thank you, judge, Commissioners.
morris priest speaking on my own behalf.
I want to say that I do have the utmost confidence in our county attorneys and leroy and his staff and I feel confident that you will get the best input from the people that know what they're talking about on this issue.
I do know that I think that the county has followed a bad lead by following the city of Austin.
and I do think that the public has made it abundantly clear two other agencies and taxing jurisdictions, whether it's a.c.c.
or aisd or even at the state level, and I would think that the hard economic times is what's brought this to the attention that perhaps the way the county has been handling this matter has not been the best thing to do by following the city's criteria when we see the statutory issues and other issues.
there's an equity issue.
there's also an issue of fairness and there's also an issue of one thing that's been brought up already that there's been no significant impact, and I don't believe that anybody can find any significant impact from the county saying zero is a good number for historical exemption.
and I think that zero is an excellent number and I would hope that the county would follow aisd's example and I think that that is the best approach.
it's an approach I hope that this Commissioners' court will support and it's a position that I think the public has made abundantly clear and I think that the evidence of that is the state and aisd and other people looking at these issues totally.
if you quantify the numbers, do the math, it's just a simple conclusion that many I think have already come to and I would hope that y'all would not have this historical exemption.
thank you.
>> thank you, mr. Priest.
yes.
>> my name is marlene (indiscernible) and I'm a landmark owner.
I apologize I do not know my appraised value.
I cannot answer your question.
I prepared this statement to speak at the city council on this past Thursday.
after many hours the agenda item was postponed.
but I was asked specifically by a couple of councilmembers to bring up this issue that was actually brought up earlier about people removing their h zoning.
I'm a fast talker so I will read this very quickly.
I know you had a public hearing about why should owners receive the tax benefits.
one is to incentivize folks to buy old homes and rehabilitate them.
two, to help offset the much higher costs of maintaining a landmark property.
and three, to compensate for the lost development opportunity on their properties.
the concern that we have is with the city and other entities is the grandfathering that these properties that are already in the program will be grandfathered into the old program and it might be changed without any help of their own into a new program, new taxing structure.
I just want to illustrate something.
my neighbor owns a landmark.
it's a little over 3,000 square feet and he needs to repair his wood screens.
it is costing him over $10,000 to do so.
because he is a landmark he has to hire a crafts person to could the work.
he didn't have the luxury to go to the home depot and pie these screens.
he signed up for the screen.
yes, he agreed to specific restrictions and maintenance requirements that will preserve the integrity of his on own home.
did he opt into these restrictions, but he did so with the offset that he would have a tax benefit.
this is very different from the case of someone who owns an old home and someone who needs to replace the screens.
they have the option to go to home depot and replace the screens.
many landmark owners do not because of the specific nature of their own.
as a landmark owner we cannot out develop our properties.
we need to keep our homes as is.
I personally have plenty of room to build more on to my home, but I chose to put a restriction on my property so if I do sell my home someone can't strip away the historic integrity of my home and further erode the fabric of my neighborhood.
the cost to me is the opportunity cost of development.
the tax benefit offered to me to incentivize me not to develop my property was worth this opportunity cost.
with the proposed changes and specifically without grandfathering or the loss of these tax incentives, why would a landmark owner want to keep the historic zoning on their property without getting any benefit?
when landmark owners want to sell their properties who in their right mind would want to buy a home that is more costly to maintain because of the strict requirements, cannot develop their properties to the fullest all in exchange for extremely small tax savings?
nobody.
the realistic consequence of not grandfathering is that landmark owners will want out of the program.
the reason why people have not pulled their h zoning yet is because there are strict, strict penalties in doing so.
you have to pay back the taxes from day one of getting your historic exemption.
so what we are doing is we're actually petitioning council to say if they're not going to grandfather and if we're going to lose these benefits with the taxing entities, we want out of the program, penalty and fee-free because if we are seeing-- we as a community are saying we're putting these restrictions on your property for basically no benefit, you're putting a servitude on us and we're getting no benefit for it, but we signed up for a benefit, so we don't want to participate in this program.
and what's going to happen is that we can watch and all the citizens of Austin can watch Austin turn into any town u.s.a.
as we lose our historic housing stock to much larger and cheaper developments.
and it is clear that in this case preservation is not valued in this city any longer or possibly this county because if it was the program overhaul would have been the given the proper attention that it deserves with open dialogue and review of solid research data rather than just people coming up and saying it's a bad thing.
there's a lot of good data and I know people have been looking at it, but how fully has this data been looked at.
currently there were people that could not pay their taxes last year.
and I hope some of them are here.
but the movement is that if we lose our benefits, we don't want to participate in this program because we have so much burden on us, why bother?
>> any indication of the city's response to designate without personality?
did the city council indicate any kind of response to that?
>> they don't because we didn't have an opportunity to start talking about it.
>> the penalty isn't actually all the back taxes.
it's three years.
>> oh, is it three years?
three years.
>> so it's a roll back.
it's actually a roll back just like -- for example, just like an ag exempt.
you lose the ag exemption on your property for that use of that land -- this is just an example -- you roll back to -- I think it's five years.
>> it's a big penalty.
>> in this particular case the roll back would go back to three years whereby you would have to pay the taxes that if the property was not at that point historic designation, you would have to pay that fee.
so that's actually what you're referring to in the city council has not had an opportunity to address roll back penalties in this regard.
that's what you're saying?
>> yes.
>> oak doak.
thank you.
>> yes, sir?
>> judge Biscoe and court, my name is alfred stanley.
I'm a homeowner in west Austin.
I guess I could be called the whistle blower on the extent to which the historic designation has gotten out of hand in that when I received in October of 2009 five notices from the city that five of my neighbors within 500 feet of my home were applying for the historic zoning, it got me to look into it.
and I found that the benefits I thought were being too freely given and were excessive, and that led to an american-statesman story in the January of 2010 and several of the taxing entities taking a new look at the historic designation program, the effect of the city giving out so many designations and everybody else following along.
you know, I love -- let me say I love old homes.
I've chosen in my two properties that I've chosen in Austin, one in clarksville and one in pemberton, which I've owned about 15 years each give or take.
I've chosen to buy older homes in close listen in neighborhoods.
my first home was built in the 1920's.
it was a bungalow built by model t mechanics.
we described to the old house journal.
we had to replace the old cedar timbers, which the house sat on, because they were sinking.
and the house would have been become dlap dated if we hadn't.
I did not get any public help for doing that.
later through a series of fortuitous circumstances and a low real estate market in 1990, I was able to purchase a home in pemberton.
that home was so solidly built -- it's a home built in 1937.
I have never had to do anything to address the foundation on that home.
my roof is an asphalt shingle roof just like you might find in a -- in any kind of newly built home.
my expenses for maintaining that preworld war ii home are no more expensive -- in fact, they're probably less expensive than some homes built in the 1960's.
I think economic -- the economic need is very important and it's going to vary from property to property.
the -- I think rick hardin spoke about his office property on the vermond block once it was built as a home.
it does not sit on a regular foundation.
it sits on rock.
that is connected to all the other rock around the vermond block.
and it's got old plaster walls.
when a truck drives by, a very heavy truck and the streets rumble and the rock bumbles, the house shakes and the plaster walls crack.
now, that's a need for a -- that's an extraordinary cost that if it wasn't addressed it adds to the expense of the property, but I read in the "austin american-statesman" editorial the other day that the people receiving these benefits are putting them back by and large into the maintenance of their properties.
I doubt that.
they're getting a -- with everything that was coming down the way it was, with everybody following along with stint, people were saving 60% of their taxes.
so a-million-dollar home would have $22,000, roughly, in taxes every year.
$13,000 in taxes saved.
I don't think -- in my house I'm not spending $13,000 a year maintaining it, and what I spend is not any more than I would spend owning another old home.
I have not applied for historic designation for my home.
one of the people who makes a living or some income by applying for this and writing the essays about how the prominent Austinite with was such an important historical figure way back then because they were a professor at u.t.
and would enumerate what style house mine was and apply for that in return for a third of the tax savings in the first year, said to me, called me up and said you know, your house is eligible.
I could get you that historic designation.
and you better hurry before they catch on.
people are applying for this because property taxes are high.
in Texas we rely very heavily on property taxes.
and they are burdensome.
but that's not a reason -- this program is being misused, badly misused.
people are applying -- and Commissioner Eckhardt, my Commissioner, I think that what I heard you say before was that properties in a certain zip code are valued higher on average.
but that may not be because they've been found to be historic.
that may be because there's a big incentive on a higher valued property to claim to be historic.
that it's worth it for one of the three people who go out and -- if I were to choose to help people get this historic designation, I'm not going to call the owner of a 200,000-dollar old home.
I'm going to call the owner of a-million-dollar or two-million-dollar old home because my percentage of the taxes they save is going to be higher for my effort.
so I would say that there's a lot of explanations why you could find higher designations.
my brother-in-law from florida is an architect.
once he came to visit me and said, alfred, I really want to make sure that I see the vermond block.
those beautiful old homes, when I come to visit you.
he didn't get excited about my 1927 bungalow.
he wouldn't have gotten excited about my 1937 nice older home in pemberton.
he wanted to see the vermond block and I don't doubt that the protection of the vermond block adds to tourism.
I do doubt that the historic bull house, the historic boner house across the street from me, add to tourism or economic development.
the idea of the -- my house is eligible in the hailstorm several years ago my windows got blown out.
I paid -- every window on the southside of my house, the nice mullions, was destroyed.
and I have screens that go over that.
my total cost for replacing those windows, repairing those windows, was 6 thu dollars.
and that's from a total loss.
I just don't see that a 1937 home genuinely has the maintenance costs that are claimed.
another point is that when you are giving a benefit in perpetuity, you should take a look at that as if you're giving somebody the cash value of a 30 year treasury note based upon the one-year interest.
a-million-dollar home again, $13,000 of tax benefit.
if you were to put that -- if you were to try to get $13,000 a year out of a treasury bill at four percent, that would be a 330,000-dollar a year treasury bill to produce that -- 330,000-dollar face value treasury bill to produce $13,600 a year.
when you are saying to a-million-dollar homeowner, collectively, not just the county, but the school district, the county, 60% off your taxes in perpetuity, you all may as well be getting together and write that-million-dollar homeowner a 330,000-dollar check.
you are subsidizing their ownership of the home to the tune of a third.
appraisal.
many of the large mngses in west Austin -- large mansions in west Austin are underappraised.
it is easy to go into a neighborhood where the homes are similar and built by the same builder and to get that value based on the market value and the sales down to within 5 percent.
any time you have a large unique property -- and some of these mansions, I don't believe they're historic.
they are certainly unique.
it is very hard to pin the value to them and say what it's worth.
and if you get too high you can be guaranteed that the owner will get an attorney to fight the appraisal district on that valuation.
rick hardin is very knowledgeable about real estate, pointed out a whole community in west Austin, valued at two million dollars.
and he said that that home would sell for seven million dollars.
that's the extent that the tcad is off on some of these appraisals.
the county is worse affected than any other jurisdiction except for the hospital district, which follows the county's methods.
because you give the 20 percent appraisal, the way that the comptroller's office tells you -- tells the appraisal district they must designate these exemptions is additive.
so you're giving people 20% homestead exemption off the top and as a homestead exemption holder thank you very much.
I appreciate the tax relief.
but in addition to that you give that 20%, that's calculated and set aside.
then you're giving 100% of the improvements and 50% of the land.
now, let's say that in many of these cases 50% of the value of the home is the land and 50% is in the structure.
that's not uncommon in my neighborhood where the structure tends to be -- okay.
so 20% is gone.
50% of the 50% is another 25 percent.
so now you're down 45 percent.
and 100 percent of the land is another 50%.
20 and 25 and 50 equals 95 percent.
the county in a lot of cases is only valuing five percent of the appraised value of the property.
the appraisal of which can be very, very low.
so the county is so much more hurt than the other taxing jurisdictions, and I can point to individual properties where the value is 60 percent on the improvement, 40 percent on the land, and at that math you get zero taxes on those properties.
and these are not properties that a single tourist drives by thinking this is really historic, this is special.
I'm coming to Austin to see this.
this is welfare for the well off and it's ashamed that the city has let their other goals tap into this program for this purpose.
it's an excess active benefit.
>> alfred, let me ask you something.
you said that Travis County is hurt more.
but given the fact of the effect of the tax benefit on the effective tax rate, it's actually other taxpayers who are hurt.
the Travis County could havers don't perceive any change at all.
>> well, that may be true, but I guess I have a problem then with paying higher taxes so a neighbor of mine can get 95% -- can pay only five percent of what they -- what I'm paying to Travis County in a similar home.
I think someone is being ripped off.
and if it ain't you, it's me.
let's see.
in any case, there's a material called cubic sir conian.
it's chemically indistinguishable from a diamond.
if I take a ring of that and put it in a tiffany box, it ain't a diamond ring.
the city of Austin greatly I think is concerned about tear downs of older homes because they like the character of the neighborhood.
they have a program that says that's historic, that's historic, that's historic.
they should design a problem that meets the problem they're -- that meets the problem they're trying to solve because the implications of designating 30 houses a year as historic, which is a rate that has gone on more than historically is just devastating.
thank you.
>> this may be time to say something new and different, if possible.
>> I will, but I was asked to defer to her because she has to leave.
>> I'm sorry, judge.
>> that's fine with me.
we have a chair available.
>> I have child care complaints.
my name is maureen montoya.
as I mention ted last hearing my house is historic.
it's an 1875 home.
the reason it's a landmark is because it was the home built by one of the early Travis County treasurers, albert (indiscernible).
so it has some history relevant to you all.
and this program has kept it in place for the last 30, 40 years because without it somebody could buy my home, tear it down, subdivide my lot and put up condos because I'm two houses off of west sixth street.
so the issue that mr. Stanley raises about need is there.
is there a need for every specific house -- I mean, the city of Austin has said in its ordinance when it passed the ordinance and when it passed the tax program, tax exemption program, there is a need.
and a lot of that need goes back to the underlying zoning of the land.
and a lot of that is a problem that's 80 years old.
so the fact that perhaps mr. Stanley's neighbor, he doesn't think they're in need, that doesn't mean it's not there.
and it doesn't mean that the next person who buys mr. Stanley's neighbor's house won't tear it down and do something with it.
the issue that we're really talking about, I mean, it sounds like from what mr. Stanley is saying, it's unfair.
it's unfair that you grant tax exemptions to some people and not everybody.
well, it's unfair to be giving tax exemptions to businesses to come here and give away jobs, etcetera, and give them a tax break for four years.
some people don't like that.
some people don't like to have to pay taxes for a school district that they don't have kids there.
some people don't like paying taxes for a lot of things.
if that's the argument, that's a specious thing because we're all paying taxes for things that will benefit the community as a whole.
if you want to isolate yourselves and not pay any tax, then I don't know what your options are in the united states of america, but everybody pays tax.
it not always going to directly benefit you, but it benefits our community.
and preservation in Austin and preservation -- and I whole heart lid that you all expand your tax program to other parts of Travis County.
it benefits our community.
it creates fabric, it creates history, it saves where we came from.
people might not be excited to go to a 1920's house over in pemberton, but I tell you a lot of people come by my house and look at it and this is true in a lot of neighborhoods, particularly older urban neighborhoods again that are at risk, serious risk of demolition.
and I point to east Austin as a great example.
there are a lot of lots over there that are highly zoned for multi-family, commercial development that could easily be tearing down the older homes that have been there for 40, 50 years, the older businesses that have been there for decades to make room for hi-rises and other stuff and we're seeing the effects of that in the last census data.
so at some point when you let people do that over and over again you're losing the heritage and the history of that area.
is that fair to those residents?
I think we need to step back and not be looking at this in such a narrow view.
there are going to be out liers.
yes.
the woman in pemberton that went around selling prament to her neighbors and calling mr. Stanley, that has been stopped.
let's make that clear.
the city of Austin put a stop to that.
it was not a good thing and they recognized that and they passed that more than a year ago.
and they put a restraint on the number of residential properties that are eligible for historic zoning.
you cannot go to the city now and just expect that you're going to get zoned.
there is a number -- there's a finite number that can apply and there is no contingency, so no one will be making money off of this program down the road.
I'd just like to say too the issue about tax and equity and appraisals, that's a big issue and I agree.
but if you're going to get into which residential house is not appraised at market value, then you need to get into that issue for commercial property as well.
because there is serious undervaluing of commercial properties downtown.
I don't dispute the fact that a lot of those folks, particularly the landmark buildings, need some kind of subsidy.
they are not at their highest and best use.
but if we're going to get into this game of let's pick on this person or that person, then we should do it across the board, that it's fair and transparent and just.
and in the landmark program itself, and I would urge you all to maybe postpone action on this or take a longer view of this because I don't think you've gone through the data enough.
>> postpone action for how long?
if you recall if you were here earlier and I guess you were, I suggested that as far as I'm concerned, to look at what we've got to deal with, the timetable, suggested that from staff that July 25th of this year would be the timetable that we would need to look at.
but as far as coming back to the court prior to the July 25th date would be July the 12th.
so when you're saying delay action, what type of delay action are you referring to?
>> I'm saying take a step back.
work with the other taxing entities.
>> I know, but --
>> examine the bigger picture.
>> Commissioner, just let her finish.
>> go ahead.
>> then I think that would be a more appropriate way to approach this and take a whole list stick view because there are a number of people that are in the program, residential owners, that need this.
that have deferred last year's tax bill because they can't pay the tax bill from aisd pulling out of the program.
>> but what I'm saying is this, and I want you to understand me very clearly.
this issue has been before us for awhile.
I don't know how long the city will be looking at theirs.
who knows?
I heard earlier testimony that one of the persons was speaking about a rollback, for example.
if I get out of this deal, then of course I'll be penalized.
they didn't even get a chance to express that to the city council.
so when you're saying other governmental entities, we all don't operate on the same type of schedule.
and I want you to -- that's what I'm trying to impress to get to you across.
>> I fully understand that.
and the school board needs to make a vote in June.
I get it.
but on the other hand, this whole effort was put into place by a very small number of people running around arguing foul over it, and getting votes taken in the middle of the night with no notice to the affected individuals.
now you're putting hundreds of people in the situation where they either going forward getting something of lesser value than what they signed up for, in essence a breach of contract, or you're telling them okay, fine, we changed the rules on you.
if you don't want to play anymore, that's fine, go roll back your zoning.
guess what?
that's a huge process.
it's a very process to undertake and you're penalized for that.
so no matter -- either way what happens in this whole process here that you're undertaking, you're penalizing people that did nothing wrong.
they played by the rules.
they were part of a program that was in place, that's been in place for 35 plus years, thinking they were doing something good for the community by saving a structure that may have been torn down.
this is what we're talking about.
so if you want to talk about what's fair in terms of who is paying what taxes, how is it fair to be penalizing 550 plus individuals for doing something that they thought was enhancing Austin.
and that really is the gut of this issue.
I guess the issue about, you know, having to show need, etcetera, but if you're going to means test this program, then you should means test all the tax exemptions that you give.
>> would you be in favor -- and means testing actually is I believe an inappropriate -- would be an inappropriate thing.
I don't think that the homeowner itself we should say what was your -- what was your income last year?
we're actually prevented by state law from having an income tax, but would you be in favor of making a determination with regard to the property?
not to the homeowner, but the property, that the property is in need of tax relief to encourage its preservation from a market standpoint?
>> I think that need has already been established by the city.
and --
>> because it's nowhere in their policy.
>> it states it very clearly in their ordinance when this was enacted in the late 19 70's.
>> I would love for you to cite that for me.
>> I would get you a copy of it and I will be happy to email it to you.
it's online.
>> any final words?
>> no.
>> thank you.
>> thank you very much.
>> good morning.
my name is August harris.
I'm here today to speak on behalf of the heritage society of Austin.
I will address a couple of the questions that have come up here in a second.
I wanted to let you know we're supportive of the recommendation that this matter be held in abeyance for the time being.
we've urged, and I would to repeat that, we've urged the city to include you in the ongoing dialogue.
one of the questions came up about where the city was.
city councilmember spellman and morrison presented a resolution that was to be read at this last session and it was pulled in executive session and it's been rescheduled for the end of the month.
that resolution will start the process of code amendments.
whether that actually takes place or not, and it may have something to do with politics since it appears we're going to have a special election in the city, a runoff election.
but they are -- they may postpone it at that point in time.
but right now the resolution is scheduled for the next city council hearing.
that resolution will instruct staff to begin the code amendment process and I don't know whether you are familiar with the city's code amendment process, but it will go through boards and commissions and it will ultimately come back to the city council for a vote.
during that point in time the resolution will direct staff on how to draft the resolution -- how to draft the code amendments.
but by the time it dpets back to city council there could be some changes.
>> but none of that can be accomplished before July 11th?
>> yeah.
it's likely unlikely.
>> they take awhile because those code amendments over there have to go through several levels of government with the city of Austin.
>> it also allows for public input.
>> I understand that, but I want you to understand that and I hope the city understands that as far as I'm concerned -- and I know the Commissioners' court going to look at this.
I've heard from my staff and I think the judge asked a very significant question and I keep hitting on it because I want to make sure that everyone understand as far as where I'm coming from.
I'm going to try to make a decision on this July the 12th of this year.
now, whatever the city can do on their end to look into this and see if they can expedite for a goal or whatever they need to do here to adjust as this young lady that spoke before you saying all other governmental entities need to look at this, but everyone has different schedules and different criteria and different time lines that they would like to come up with.
we're under a different timeline also.
that timeline as far as what we need to deal with here need to be given a lot of consideration just as everybody else's timeline.
>> I understand that.
one of the things I would like to point out, a bd this was brought up by mr. Nellis at the last hearing on this subject.
both Commissioners and staff recognized that the participation in Austin's historic preservation has no impact on tax rates and that is a quote from mr. Nellis at the time.
had no impact on tax rates.
and a negligible and I repeat negligible impact on Travis County's operating budget.
that anything is enacted now has no effect.
so there is no -- there is no -- from a practical budgetary perspective, there's no reason to act in haste.
and we certainly would like to see y'all go through the level of public participation that the city is doing, and we certainly would hope that you would participate with the city in that dialogue.
again, we've asked the city and the city is certainly -- I'm sorry that they haven't reached out to the Commissioners at any great level on this, but we hope that going into the next few months, realizing that everybody wants to move, and that includes aisd, we're actually in the process of the city -- the city is in the process of meeting with aisd right now.
>> how many public hearings has the city council had on this?
>> the city council has had two, but this was --
>> but one of them the agenda item was postponed.
so they've had one.
>> well, if you go back to last year there were more hearings.
but where this has been was with the operations group of the landmarks commission.
so there have been quite a number of public hearings through that process.
now we're talking about code amendments and this will go through a series of public meetings.
we urge you to work with the city of Austin to finalize an incentive structure that will preserve what's left of the region's rich history.
one of the questions that was asked a little while ago by mr. Nellis or one of the points that was made was that aisd's pullout didn't result in any landmarks being removed.
that's because everybody was hoping that the program would get fixed in some form or a fashion.
there's no guarantee that in the coming months you won't see folks file suit to have their designations pulled.
and we hope that that's not the case.
we understand the impact that puts on folks in the community.
it's important for the county to consider ventizing -- incentivizing preservation for its rapidly didn't integrating fabric.
the heritage society stands ready to assist the Commissioners' court and the Travis County historical commission in designating -- in designing a comprehensive preservation program should you so request.
>> well, let me say this to you.
I'm going to follow my advice of my staff, pbo and also the tax office.
folks down there.
and when they tell me about effective tax rate, they tell me the timeline, we've got to go through the process looking at our budgetary requirements during the budget cycle.
because last year we kind of got behind this a little bit and of course we had to kind of postpone to some degree as far as taking any action on this before.
I don't want to see that same situation come up again so I will stick by what they said.
>> yes, sir.
my point is you could adopt the --
>> hold on, let me finish, please.
I'm going to stick by what they said.
I hear what you're saying and I've heard every word you're saying but I want the city of Austin and all the other folks out there to also hear what Travis County is saying -- well, Commissioner Davis, because the court would be Travis County.
but what Commissioner Davis is saying.
I'm saying I want to look toward July 11th -- July 12th as an action that hopefully would be the court can take action at this time.
so that's all I'm saying.
whoever else want to work within that time frame, fine, but at least you hear where I'm coming from and so I just want to make sure you get that understanding.
>> and I agree.
you could adopt the effective tax rate now and keep the exemptions in and the effective tax rate wouldn't change one way or the other because it is such a minuscule portion of the county's budget.
>> well --
>> any final words, mr. Harris?
>> only questions from y'all.
>> are you in favor of a finding with regard to need of tax relief for preservation?
>> it's interesting.
pemberton has been the neighborhood that's been targeted in a lot of the public angst on this.
and I went back and looked -- by the way, this isn't a national register district.
I went back and looked at demolitions over the last 10 years in a national register district: there have been -- and pemberton doesn't have that many houses from a greater -- I don't know, 4, 500 houses.
in 10 years there have been 46 demolitions.
so an area that you would think would be too invaluable -- too valuable to demolish, too historic to demolish, 46 houses in 10 years have been demolished and that doesn't include accessory buildings that have been demolished.
that is the houses themselves.
it doesn't include all the houses that have been so remodeled that they no longer qualify for national register status.
>> are you arguing for a demolition percentage as a criteria?
>> no, no, but what I am saying is that absent designation -- a need does exist because absent designation these homes are being bulldozed anyway.
>> what I'm asking you for is what would be your criteria for determining that a property is in need of tax relief for its preservation.
>> I think the argument is made that absent preservation --
>> that's circular.
what is your criteria for determining a property is in need of tax relief for its preservation?
>> the evidence shows that preservation is needed.
>> what is the -- I'm not --
>> thank you very much.
>> thank you.
>> now, we have heard comments again today as well as the other public hearing and we heard from staff again.
I don't know that we've heard anything new except the recommendation did change slightly.
in my view here's how we should proceed unless somebody else wants to outline it.
I think we ought to do the following: we ought to outline these recommendations if the court approves these and we ought to figure out who should do them.
I think we ought to report back here in two weeks for us to decide how we will proceed based on the information that we get.
and I don't know that the three gentlemen sitting before us, hard working public servants though they may be, will be able to get this done.
I do think we need to, one, check with the Travis County historical commission or committee and determine if they have a 100,000-dollar bill exactly what they would do for us, how they would do it and if the cost of the $100,000, how they arrived at it.
that's one.
two is the possibilities of -- possibility of federal grants that Commissioner Huber mentioned.
if somebody has a lead on those, we need to know what they are so it can be rrched.
-- researched.
three is that we need to find out exactly where the city of Austin is, its timeline and if they're looking at code amendments specific sli what they are if anybody knows.
if there is a resolution to be considered we ought to ask for a copy of that.
>> we have that.
>> we being the Commissioners' court should have a copy of that.
>> it's in the backup from Thursday.
>> I still don't have it.
>> I will be happy to send it to you.
>> and Commissioner, I was not about to say that Commissioner Eckhardt was going to be part of this working group, but I think I ought to.
but we ought to get that, whatever it is at the city of Austin, we ought to get what they've got, how they seem to be proceeding, and because I think in two weeks we ought to decide whether we would hitch our wagon to them or basically proceed on our own.
if we proceed on our own, because we have never provided f.t.e.'s to do this, there is that that we have to consider.
if the historical commission can do that and we want to get them to do it, then so be it.
in terms of the state, though, the question is exactly what does the state have in place, how does it work and if we plan to proceed with the state, basically how we would go about doing that.
the question in my mind is that if we proceed with the state, say effective October 1, 2011, what happens to the 559, 69 properties that are already grant the historical expemtion by the city and Travis County.
five is that for those properties that are -- have received the historical tax exemption and are now on that list, if there is a policy to allow them to undesignate, then what about the idea of doing so without a penalty?
let's find out where the city of Austin tand stands on that if in fact they have a position and see what the consequences would be for us.
it would seem to me to be fair to do if we proceed.
>> is that the rollback thing we were discussing earlier?
>> yes, sir.
mr. Nellis called it undesignating.
you called it roll back.
I guess we ought to come up with the right word for it too.
the other thing is for the aisd policy on historical exemptions, the question that I have is whether they are reviewing their decision or whether they are leaving it where it is, which is basically disallowing them.
and then the question is for those who would have enjoyed exceptions, if they would lift that, terminate the exemption effective the day of the decision.
and I guess what the consequences would be if any.
the other question that's been raised here today is if it's possible for us to calculate are the percentage -- if we are able to adopt a policy where the impact of the historical exemptions are the same for us and the health care district as for the city of Austin, what formula would we use to do that?
see what I mean?
right now we are hit harder because we do allow the 20% 20% homestead, the over 65 or disabled -- $65,000.
if we were to put ourselves in the same position as to those two as a city, what formula would we use for the historical exemptions.
and the other question here is after we've done all of this, whether we need to huddle with the legal counsel in executive session and get a briefing before the open court action.
and this is a whole lot to do.
these are notes that I took during our meeting today and it seems to me that we ought to do these, at least other members of the court may have other things to do.
I do think what we need to do is outline these and I can try to do it myself.
so we can try to figure out who is doing the work.
this is a lot to get done in two weeks.
and y'all will have your other full time duties and responsibilities also, right?
so this is what we ask these three to do.
>> a copy of that, and I think it's a good approach.
I think it included a lot of things that were discussed here today as far as what you --
>> a copy of --
>> as far as what we're doing here.
and as far as the things that you just read out.
and I guess staff when you get what the judge just laid out to you, if the court approves it.
I'm assuming we will.
it will be good to get that laid out direction so we'll have a chance to look at it within that two-week time frame.
because I want to make sure that all the things I've heard also are included -- it appears that they are, but you know, it would be good to see it in writing.
>> the other thing that I think is that if we have four, five options to consider, whatever they are we tiewt have in writing.
otherwise we'll discuss this two or three more hours and won't make much progress.
but if our goal is to take action in two weeks, and I think it ought to be that, then we ought to come up with these facts, come in with the options -- action options so we can consider each and every one of them, then vote and take a vote on it.
Commissioner Huber?
>> I would actually like to suggest three other items to your list, if I may.
one of them is -- I have to say I am really, really frustrated on this myself because as long as -- even a year ago there were things being discussed here that we wanted to see incorporated in this program and a look at it that have been been addressed.
and I don't know if it's because the court has not given specific direction to staff that's specific enough or what the problem is, but I don't like rushed up at the last minute.
and you're right, we've been on this a long time, Commissioner Davis, but I don't think we should rush and not do it right.
so I hope we have the time to deal with this appropriately, but one of the things that was discussed last year was more stakeholders involved in this.
and we need the historic preservation people input more than we've had.
I think that's demonstrated by the work session that we had.
and there are programs out there nationwide that we need to look at.
so one of them is I want to at least staff to take -- I would like to see us take a look at what resources are out there for incentive programs that we have not looked at that may dove tail with this.
and this may be at the same place that you're looking for federal grant information.
the other is that we at least include some additional well spoken stakeholders.
we've had some in the work session.
and the other is that we look at the county-wide program.
I don't think that was mentioned.
and that does need to be looked at in the overall picture.
>> do you have specific groups of stakeholders that you would like for us to incorporate?
in the next week so we can get the backup to the court by next Tuesday for the following Tuesday?
I mean, we have talked to the heritage society.
they have given us extensive input.
they've given the court.
is there another several groups you want us to --
>> well, our appointments to the commission.
have you talked with anybody at the Texas historical commission?
>> the Travis County historical commission?
we will be in contact with them, the members of that court.
>> and the Texas historical commission?
>> I just don't want to --
>> she said Texas historical commission.
>> so Travis County historical, Texas historical.
>> and I would -- I don't have the list in front of me, but let me go back and get a couple of names.
>> yeah.
if you will just let me know.
because we're on a five-day working day turnaround on this thing to get here in two weeks.
so if you can get me something by the end of the day, we'll be on the telephone getting the input, attempting to meet that deadline.
two weeks may very well be too aggressive.
>> well, this is something that we were asking for a year ago.
like I say, maybe the court is at fault by not giving specific information.
>> the court is at fault.
we've never made a motion on this item.
we have a tax team that had a specific charge with regard to tax equity, not with regard to the optimal program for the prfertion of historic properties.
we did not amend their charge, nor do we amend the composition of that team.
this team is -- was put together as experts in tax equity.
if we want experts in historic preservation, we should develop such a team.
>> well, but in reference to the questions involving the historic -- the knowledge from the historic stakeholders, you have backup.
I don't know if you've had a chance to read it, but you've had it several months.
I mean, it's interesting that tarrant county does address need.
we've talked all the way around it.
they very specifically say the owner must provide economic justification for the tax exemption by showing that the project cannot be developed without an exemption.
that according to their county attorney is what it takes to statutorily satisfy need.
we have supplied backup of other historic areas such as boston and some of the other national.
it's all in the backup.
>> okay.
>> I'm just saying --
>> we'll review the backup.
do we have reason to believe that other cities in Travis County are interested in joining this?
>> we have spoken with the city of Pflugerville and some individual in Pflugerville.
that's the only municipality in my precinct other than the city of Austin, about their interest in preservation in their downtown core.
>> I don't know that I would waste a whole lot of time doing that now.
I think whatever we put in place we ought to make sure that it's county wide, whether it's negative or whether it's a modified exemption.
there's no way for us to get this done in two weeks.
now -- okay.
my recommendation I just had, I put in the form of a motion.
that was eight or nine things.
what I will do is reduce this to writing and indicate who I think will do it.
>> I second the motion, judge.
>> what I would do with that too is I'll put down my thoughts and circulate to the court so people can volunteer to do it.
in two weeks I think we ought to report back with all the information we have and we ought to try to respond to that.
that meeting ought to be an action meeting.
not another hour and a half, two hour discussion.
however, action may be no action.
I mean, I just -- I'm thinking that this is information gathering.
we ought to make a decision based on this.
and I don't know that -- I don't know that we can do more than that today.
>> judge?
would you and Commissioner Davis consider it friendly to the motion to add staff coming back with recommendations for criteria for determining a property is in need of tax relief for its preservation?
>> if they look at what others are doing to make that determination, what the law is, etcetera, it's fine with me.
>> do you consider it friendly, Commissioner?
>> judge, could I make a comment?
I have taken notes, specific notes on the recommendations Commissioner Huber has made for further insight, and Eckhardt, and we will doaferg we can -- we will do everything we can in the time we're given to answer as many of these questions in two weeks that we can.
we will be aggressively attacking this.
>> you will have some help.
>> the criteria for determining a property is in need of tax relief for its preservation.
and also I would suggest while we're looking at what aisd is doing, a.c.c.
also backed out of the program and we might want to --
>> I have in mind a two-minute phone call.
not a whole lot of research etcetera.
basically what are y'all doing and do you plan to revisit this or what?
and I'm happy with that.
Commissioner Huber?
>> I just have a basic question.
Commissioner Eckhardt touched on something a minute ago which I think is key to this overall discussion.
and that is the committee was charged with basically a tax equity analysis of this.
and she said it is not historic preservation.
my question is aren't the two tied?
I mean, can we afford to take action on tax equity based in and of itself without consideration to the impact on historic preservation?
and that's -- that's maybe a question that can't be answered here, but I think it's credit tell cel to our thinking as we review this process.
>> and I agree with you.
the tax team, the historic prfertion tax incentive was sort of an afterthought.
it was only in there because we were looking at all tools available to us under state statute to inject progressivity into the tax code.
and tax exemption for historic properties was simply one in the list.
and during the course of their examination and please correct me if I'm wrong, the only area of writing he will room that that he -- wiggle room that we found is we maxed out on the home exemption.
we provide all other bells and whistles available under statute.
we have not maxed out on 65 and disabled.
but we found that we had a rather robust and perhaps too generous historic exemption and could therefore find some balance between the historic exemption and the over 65 and disabled.
so I believe that as far as the tax team's charge, they've met their charge if we want to --
>> I've added that to the list.
anything else?
I didn't know whether it's 12 or 13, which I'll reduce to writing.
I think we ought to get a -- probably a written summary by whatever information we've found, three or four days before two weeks from today.
some of these we'll have information on that the court will find hopefully informative, helpful, useful.
others we won't.
let's just indicate that.
so get as much done as we can two weeks from now.
there's an outstanding motion and a second.
any more discussion of the motion?
>> was my addition friendly?
>> > yes, ma'am.
I've got that on the list.
the only thing I did add there was what other communities are doing, what the law is.
let's be guided by that.
right?
any more discussion?
all in favor?
that passes unanimously.
now, I know y'all think we don't appreciate what y'all did.
and at one time I had reservations myself.
>> [ laughter ] but we do appreciate you.
consider that to be a pat on the back.
and we'll see you in two weeks.
you'll get a written document from me, though, tomorrow.
a summary of this.
we'll give it to the whole court if there are changes, corrections, etcetera, feel free to make them.
>> what we will probably do is send you as we get information so that you have time to review it, we'll send it as we get it.
>> okay.
>> appreciate it.
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