Travis County Commissioners Court
Tuesday, June 28, 2011 (Agenda)
Item 28
Let's call up number 28, consider and take appropriate action regarding the county ad valorem tax ex exemption under tax code section 1.24.
>> [one moment, please, for change in captioners]
>> members of the court, we started this process on historic kind of tax equity, the committee appointed about this time last year.
the committee has worked for over a year researching the various things --
>> [one moment, please, for change in captioners] change
>> ...
I don't know if there's other people that would like to make comments or that the court is willing from people that have not spoken previously.
so I think the committee's recommendation you've got and -- and at this point, I believe it's appropriate to -- for the court to take some type of action.
>> judge, I have the -- the title of this is the city of Austin's dysfunctional historic landmark program.
I was interested in finding out is this -- does this refer to the -- to the homes that the city is --tis currently working on to -- to improve their process, but is this also -- does this also cover commercial historical plans?
>> yes.
>> is it possible to separate the two?
to consider the commercial because those are the ones that are -- that are kind of stand out for everybody, they are public and people come in to visit; whereas with the homes I anticipate that those are personal homes and it's not as easy for people to say well I want to tour the house.
you know, unless it's there for public use.
so is it possible to separate the two?
the committee did make a recommendation on the commercial properties to not have the cap, the $2,500 amount of benefit on only residential.
so it is -- it is a possibility.
>> the other question that I have, I think the city of Austin is still working on their program trying to figure out where they're going to land and -- and so -- when we want to wait -- wouldn't we want to wait until they fix theirs and then we can mirror whatever they have come up with.
because most of these structures are in the city of Austin.
and then we can follow up on what they are doing.
but it sounds like a -- to have a systemic approach and not -- not get ahead of the city in what they are trying to do.
and I promised that I would when I was on the campaign trail, that folks do want a homestead exemption in the city of Austin just as Travis County gives the homestead exemption.
those go a long way to making homes, regardless of whether historical or not, to be more affordable.
and -- and so I mean I still -- somewhere in all of this, I know that we can't tell the city what to do.
but in all of this, if we're talking about tax equity, can't that be a suggestion that we would make to the city of Austin that they seriously consider a homestead exemption for all homeowners?
the city of Austin?
>> let me -- I know there was a lawsuit against the city regarding its program.
so did they put their recommendations on hold?
>> my understanding is that their recommendations are under study.
currently.
I'm not sure what they intend to do with their current year exemption policy.
I would assume they would go forward and accept the same thing that they have currently.
but the current information is that the city is still studying the issue into the fall.
now, as -- as we had indicated earlier, our attempt was to get the Commissioners court to make a decision in order to -- to integrate that decision into the certified role which is currently expected on July the 25th from the head appraiser.
the arb, will approve the role on July the 20th.
and the t cad has requested a minimum of two weeks and -- and if at all possible a decision today to be able to integrate that -- that -- those into the certified and approved role.
so that's -- that's where we are.
>> do all entities have that same deadline?
>> yes.
>> by July 12th?
>> all of the rolls will be approved by the arb --
>> by July 12th.
>> the review board on July the 20th.
then the arb rolls it to the chief assessor, patrick brown, for certification on the 25th provided he has the statutory number that he's within the statutory requirement on outstanding protests.
as you will recall two years ago, he was not inside that.
and I had to roll the certification for a week or so.
>> leroy, with that, I guess that was part of the -- part of the concern that -- that we had raised early on in this process, last year I guess we kind of were outside of the scope of the owe over the arb and also tcad.
of course, this year when this was brought up, we was hoping that we could look at what we were dealing with as far as -- as far as the exemptions and if the court decides to approve the -- the -- the eight recommendations, it was done in a way whereby tcad and those folks would have an opportunity to actually deal with the certified tax roll.
of course, based on that and the early discussion that we've had, we -- we said that around this time right now today, would be the time we really needed to take action if we were going to have any positive impact on tcad and of course the -- the -- the appraisal review board.
so all of these things are kind of working hand in foot, we knew the city was having legal problems as far as lawsuits and stuff like that, so we don't know how it's going to come out.
but as far as Travis County is concerned, I think we have tried to
>> [indiscernible] ourselves to make sure that make sure that we have an opportunity to go forward on -- what -- as far as what I'm looking at.
I can only speak for Commissioner Davis.
and of course if -- if these particular guidelines, historical exemption guidelines are adhered to, of course we are looking at significant probably increases as far as -- senior citizens, not senior citizens, but -- but homeowners and I guess those are particular persons 65 and older, home instead exemptions, along with disabled, would be able to realize an increase as far as the exemption away from the appraised value at the time.
which means basically if -- if at this current time, what we allow, what Travis County allows is for those particular persons that are 65 and also have hempstead exemptions, of course we allow $65,000.
and of course if these new principles and guidelines are adhered to then it would be more than $65,000, I don't know what those savings, would be, but it would be more than $65,000 on top of the $65,000 right now.
an example, maybe 70,000.
it would also applied to the disabled here which Travis County also allow $65,000 homestead exemption and if there's any savings in this particular -- mr. New guidelines, that Travis County is looking at as far as historical exemptions, just an example, $65,000, a $5,000 additional deal on all of these things, of course then $70,000 on the exemption as far as their homestead exemption of -- of appraised value.
all of these things I think work in kind of in concert and I think of course Commissioner Gomez did mention the 20% as far as the city, but we have been done that road several times as far as the city allowing the 20% homestead exemption, such as Travis County.
of course I barked up that tree many a time and the bark has not been heard, that's a city deal.
but of course we -- Travis County allows that.
of course they are an independent governmental entity, but it would get additional tax relief for a lot of struggling people out there.
so again that's the city's call.
of course we've asked them certificates, I know that I have.
of course it hasn't ringed -- kind of ring on deaf ears.
but at any rate this is what -- the posture that we are in right now.
as far as I'm concerned I would like to take action today and the recommendations look pretty good to me.
but anyway we'll -- we'll -- coming from y'all's shop leroy it looks pretty good.
but anyway some folks probably --
>> several people have asked to give comments today.
I think we ought to allow 20 minutes or so to receive that.
mr. Hardin indicated that he would like to give comments, I know there are probably some others.
we do not use citizens communication form except during citizens communication, that was this morning at about 9:30.
what we will do at this time is ask you if you would like to give comments to the court, then this is your opportunity.
we have had -- we have had a designated public hearing, we had open discussion twice more, we have received a lot of email, including overnight and this morning, we have not memorized any of that, but we do recall most of it.
if there are additional comments, though, that you really feel are critical and you want us to remember when we take action before 11:30, then this is your opportunity.
so try to be brief if you can and respectful of the others who would like to give comments.
how many would like to give brief comments?
okay.
then if you would -- if you would self impose a two to three minute time limit if possible, we would appreciate it.
Commissioner Eckhardt?
>> has -- I would like leroy to actually lay out what is now the current staff recommendation because it has changed slightly.
so that -- so that the folks in the audience prior to their comments will know exactly what the recommendation actually is.
>> good point.
>> be glad to.
the first recommendation addressed the statutory requirement of addressing need and the committee recommended that the court adopt 1124 a which essentially said that there was no requirement to show need if in fact the properties that you gave the exemption to were certified by the state or the federal.
so that is a substantial reduction of the total that are currently through the city of Austin that number is about 506 parcels plus, this is about 155 parcels, so that is a reduction, an alternative that the court could take would be to qualify under 1124 b, which you would need to rely upon your county attorney's recommendation on how to identify -- how to justify the need.
the second recommendation of the committee was to have only those structures that were built before 1930.
that parallelled another urban county.
there was supposedly some architectural changes around 1930, we made that recommendation.
as I said the court can adopt any or all of these recommendations, the third recommendation was a structure and land can receive the historical exemption for no more than 10 years regardless of the number of owners, the fourth recommendation was the 10 year limit would start on January the 1st of 2011 and number 5 was a historical exemption for residential properties shall be an amount expressed as a maximum amount of tax dollars by which tax liability shall be reduced and shall be the amount of zero unless the larger amount is specified by the Commissioners court.
once authorized, the exemption may be repealed or decreased or increased.
>> is that actually a recommendation or just a restatement of the law?
>> that's just a restatement of the -- we wanted to be reclear that the law provides for an annual setting of the historical exemption.
the sixth recommendation was recommend the 2011 historical exemption for residential properties be a maximum of $2,500, where the amount of the historical exemption is 2500 less the amount of the tax dollars granted.
the property by the homestead exemption, which is currently -- has currently been approved for 2011 by Travis County at 20%.
the seventh recommendation was a historical exemption for commercial properties, be 50% of the improvement value, and 25% of the land value with no ceiling on the commercial properties.
the 8th recommendation was to recommend that the 2011 over 65 and disabled exemptions be increased if there is any savings as a result of the new historical exemption guidelines.
the -- the original recommendation that had a substantially smaller controlling on it, the recommendation -- ceiling on it, the recommendation was that you increase this exemption by 10,000.
the current recommendation, even if you were able to enforce 1124 b for need and you left the 560 properties that the city has, that would be an approximate 5,000 increase, so you would be -- if you took the committee's recommendation, you would increase the 65 and older and the handicapped exemption to $70,000.
>> so for the record, the revenue impact on the county of the current exemptions is how much?
>> the current exemptions is about $1.2 million.
>> if you would like to give comments to the Commissioners court, this is not the time to be shy.
this is the time to come forth.
there are six seats available.
as you complete your statement, we'll see if the court has questions.
and if not, we will need your seat.
so others can come forth.
good morning.
>> good morning.
>> how are you doing?
>> I'm just wonderful, very nice to be here thank you so much.
I really want to start by commending the court.
you guys have been so courageous, shown such leadership on your issue, I am so proud to have you as our county Commissioners.
I'm very grateful for the responsibility that you have undertaken owe so he.
>> may we get your name, so we know who said those kind words.
>> I'm laurie michelle, I'm very proud to say I'm a former assistant Travis County county.
it's very, very nice to be back in this room again.
the recommendations all sound very sound.
there's just one point that I want to emphasize that I think you all are aware of.
the historic exemption is not an entitlement.
it is an exemption that is required to be applied for each and every year.
so there -- if there was an expectation by any property owner that this was an exemption that would continue throughout eternity, that was just a flat out misunderstanding of the state of the law.
the other point that I would like to clarify on what I think was also a misunderstanding for several property owners is that several property owners have said, look, I would gladly relinquish my historic exemption realizing there is no need for the tax break, but they were fearful that they would be facing a back assessment under the tax codement that is not true.
under 1143 I of the tax code, there is no back assessment for relinquishment of an exemption if it is the time of exemption that is required to be applied for annual, which is what the historic exemption is.
I confirmed this with t cad, denise pierce.
for anybody who does not want to participate in the program, there is no back assessment.
we generally refer to it as a roll back.
there's month roll back of taxes upon the removing of an historic exemption.
I want to clarify that.
lastly the city's program has been under question.
because primarily there has been no demonstration of need to justify the tax relief.
1124 is a very short and clear statute.
you are entitled to the exemption if the property is in need of tax relief to encourage its preservation.
there is absolutely no requirement in the city's program to demonstrate a need of tax relief to encourage the preservation.
as such, the -- the city's program, I believe, is -- is flat out in violation of state law.
and this will show you how clear that is.
and -- and -- an open records request was issued to the city some time ago.
asking for all documents indicating a need of tax relief to encourage the reservation of the historic properties.
there are no documents responsive to the request.
that is summary judgment in a lawsuit.
that is a no-evidence summary judgment motion in the lawsuit that is pending against the citiment and you guys are so -- against the city.
you guys are so right about reviewing this.
I would just encourage that the county to -- to either adopt the recommendations that seem to be very sound, limited in scope and amount, duration particularly going to the need aspect.
but your -- your train is linked to the city and the city's program violates state law, flat out.
so my suggestion would be perhaps to do what the school district has done and perhaps sit out for a year and let the city get the program in compliance with state law and especially given the budget crisis that we're all facing and again to reiterate my first point against the back drop, it's not an entitlement, it's reviewed every single year.
I would back off if I were you and if I were advising you, I would say back off for a year, it's an illegal program you don't want to be part of it right now until their house is in order and compliant with state law.
again, thank you.
>> may I ask something.
thanks for this legal research, laurie.
with regard to -- with regard to the provision on finding, if we were to limit our participation in the program to those within the Austin program that are also duly designated by the state, that also would be a clean --
>> clean cut compliant way to go.
absolutely.
that would be your -- so you would still be able to comply if you limited it to, I believe, the 155.
that are -- that are already state designated.
yes.
you would not need to -- to have a separate, in my opinion, independent showing of need.
the -- there's two ways to qualify for the exemption.
under 1124 a if it's a state designated or b.
if you choose to only recognize the a, the state designated, the 155 out of the 560, I see absolutely no problem with state law.
you are in full compliance with those 155, yes.
>> thank you.
>> thank you.
>> thank you.
>> no thank you for your comments and your research.
>> why don't we go this way.
yes, sir?
>> hi.
>> how are you doing?
>> good,.
>> your name.
>> mendez, I believe that your current recommendations assume that there is no need for the landmark program anymore.
therefore it means that you believe there is no need for historic preservation in Austin anymore.
many of the homes, mine included, would not be standing unless there was such a program.
when I purchased my home several neighbors told me they thought I was going to demo the house.
my house is one of the west Austin homes that some of you think are safe.
still today, a lot of the values in the land and my land could have a lot more financial potential if I were to redevelop the land into something else such as a townhome.
however, as an historic landmark I am not allowed to do.
in fact, I'm not even allowed to change the color of my front door without getting the approval of the city, nor can I repaint it the same color without running it by the city.
meanwhile my neighbors can paint their front door a different color of the rainbow every day of the week and are free to do so.
I do not have that freedom.
I agreed to go through the restoration process knowing that my property would be an Austin landmark and that did involve the tax incentives that several Austin entities provided, including Travis County.
I did this in the exact same manner in which other Austin property own percent know that Travis County gives them a homestead exemption.
for all landmark owners the removal is as significant as for others who need to remove their home said exemption.
Travis County agreed in the past to participate in the landmark's program, all of a sudden the county want to pull out of the program and leave us landmark own percent to figure this out on our own.
many landmark owners may not be a able to afford their home not because the property went up but the property taxes they agreed to pay are all of a sudden going to change.
as it has been pointed out to me, the Texas constitution requires all taxes to equal and uniform.
therefore, the county is taking the position that it shouldn't consider one's ability to pay in order to assess taxes.
however, if an entity is going to place restrictions on let's say my property, but they won't place the same restriction on my neighbor's property, I can imagine that such action or tax -- I can't imagine such action or tax is truly equitable.
if the government has the need to use my property, on the eminent domain ...
government negotiates the purchase price for fair value and then both parties agree.
if the opener doesn't wish to sell -- owner doesn't wish to sell, this is court action, so forth.
the restriction is some sort of partial eminent domain because it puts the landmark in servitude, due to the performance, upkeep and the restrictions it poses for any possible changes.
regardless of the owners wishes.
therefore there needs to be a negotiation from both parties that is landmark owners and all of those entities that receive money in the form of taxes from the landmark such as Travis County so we can reach an agreement.
there has been no negotiation at all.
at the end of the day it should be the landmark owners that agree to give up our rights for whatever it is these entities will grants us in exchange.
equitable servitude law allows the holder to make use of a property or refrain from doing something on a property.
it is a promise concerning the use of land that one, benefits
>> [indiscernible] two, it's enforceable by injunction, when the equitable servitude under the landmark program was done it was done in writing, and all of the owners knew the restrictions and also incentives and we agreed.
to change the rule without the owners consent implies an equity.
Travis County and the city of Austin have been supporting and participating in this program for many years.
if there are going to be changes to it, I imagine that the county should work along with the city of Austin, along with landmark owners to couple with something that is agreeable to all.
also I recommend that currents landmark owners be grandfathered because they ...
if rules are going to change, those need to change for future landmarks so future owners in agreement.
changing the rules on us while we already signed on the dotted line is absolutely unfair.
it goes against our rights as we are essentially being forced to into a new program which carries a long list of restrictions with no incentives.
this is not the program we signed up for.
thank you.
>> any questions?
>> would you opposed to setting a cap on the dollar value of the annual incentives?
>> I think a cap would be agreeable.
I think the caps that I have heard like $350 are not.
>> that's not the recommendation.
the staff recommendation is $2,500.
>> right.
>> I think if -- once there is a program and everything is agreeable then yes.
I mean -- we have a -- we have a landmark, all of us landmark owners, we're also going to have to sell it at some point.
it's our nest egg.
we have to make sure when I decide to sell my home, whether it's tomorrow or in five years, what's going to happen then.
there is a lot of considerations for new owners of our property.
I guess I would have to look at the whole program and all of the changes to say yes I think that it's fair for everyone or not.
but as of now, I think all of these changes are just brought up on us.
I think what aisd did was completely unfair.
I know there's fingers being pointed whether it's the city or not the city.
at the end of the day is us landmark owners who got slapped with a huge increase in ax last year.
we are citizens of Austin, it was extremely unfair, I can't imagine if you decided today we're getting rid of all homestead exemptions what Austin people would do.
you know, it was worse for us because they were really high -- you know, compared to like what we have.
it gets taken away.
>> what has been your out-of-pocket expenses attributed to ensure that you retain historical exemption at your current residence?
what's been your most out of pocket?
>> for what?
>> for whatever the upkeep.
you mentioned about painting the front door.
for an example.
>> we went through this last meeting.
I believe you all didn't want to go through the same stuff.
we covered all of this.
>> I think it's significant because --
>> I spent I think I said last time it was over $200,000 to restore my home.
>> no, I'm not talking about then, I'm saying annually out of pocket?
>> annual out of pocket I spend thousands of dollars, many, many thousands of dollars just painting my front door is not the same as painting any other front door.
I spent a lot of money in upcoming.
all of the siding.
repainting.
the last inspector for historic, told me one of the walls is chipping, my wall was repapered two years ago.
>> since then I'm trying to get to the nitty-gritty.
since then what have you spent, have to --
>> since when?
>> well you said painting the front door.
I'm trying to get down to that point.
>> it's an example.
actually I have to paint my front door soon.
it's just an example.
if all that I had to do was paint my front door I wouldn't be here because I have a job and I could be making the money right now.
but there's bigger issues.
repainting the whole house, siding has to be milled to spec because they don't make it.
there's a lot of issues.
there's the fact that my current bill I'm not sure how much your let me bill was, mine last month before the summer hit, before June hit was over $600.
I really conserve energy, I have my thermostats high.
I'm scared of what it's going to be now.
I can change my windows, I can't add insulation to my home because that would be a fortune.
>> other folks testified said they bore the costs.
whatever it cost them to do what they had to do they did it.
of course you did what you did.
of course you have your historic exemption and stuff like that.
what we're trying to do here today is set a cap, that's basically what it is as far as the $2,500 because I heard opposing views, also, saying that hey whatever it is, we will eat it, we did it, weaver not asking for anything.
so -- we're not asking for anything --
>> I don't know of any landmark owner that's saying that actually, I'm saying that because I know landmark owners.
what I did to my home was knowing that it was an Austin landmark.
>> thank you very much.
>> thank you for your comments, though.
>> appreciate it.
>> next, your name.
>> good morning, Commissioners, my name is terri o'connell, the co-chair of the preservation committee of the heritage society of Austin.
I'm here today to support the heritage society recommendations and thank you for your extensive consideration of this issue as you move forward.
the heritage society would very much like for you to work in concert with the city of Austin in their tax abatement structure reevaluation.
if you do need to move forward on a recommendation today, we would respectfully ask that you consider the heritage society recommendation.
I think that our previous speaker spoke very well to the servitude that landmark owners are responsible to maintain their historic properties.
I am not the owner of a historic landmark property myself.
I'm just speaking on behalf of the program in general.
I used to be on the landmark commission of Austin.
I'm a local architect.
I know what these homeowners have to do to maintain their properties.
I know there's an annual inspection by the city of Austin to make sure these properties are maintained.
they actively devote staff to these annual inspections and the property owners are expected to make these repairs before the tax abatements are granted on an annual basis.
so while the county may be considering adopting your own policy for offering tax abatement to state designated landmarks, if you change the way that -- that your abatement are offered, I wonder how you will benefit from the city of Austin enforcement arm to maintain these landmark properties that are so important.
the city of Austin has a very thorough process in place that I think we all benefit from to make sure that these landmark properties retain their historic integrity throughout the course of time.
to summarize and recap, I know that you have heard presentations from the heritage society before, I'll keep it very brief to just the bullet point.
to phase in the structure, to be applicable to landmarks designated after the effective date of your decision and existing owners upon transfer of the sale of the property, that's recommendation number one, recommendation number two is establish a hard cap for historic tax incentives for landmarks consistent with number one at $2,500 for residential landmarks.
no.
3, participate in incentives for local historic districts, which would mean a tax freeze at the prerehab value if you rehabilitate your home and expend more than 25% of the adjusted gross value of the house.
finally, to work with the Texas historical commission and other stakeholders, for a county-wide preservation program, was a goal to come back to the court by January 2012 with recommendations for action.
and finally, to maintain the commercial abatements as they currently stand for -- for landmarks that are commercial landmarks as Commissioner Gomez said these are active tourist attractions for the city and clearly justify their current abatement structure with no cap.
I would like to -- the conclusion of my comments, if I could ask, we have several people in the audience from the heritage society, if I could ask them to stand up in support of these recommendations.
thank you very much.
>> thank you all very much.
>> thank you for your attendance.
>> yes?
any questions for ms. O'connell.
>> a point of order.
>> beg your pardon?
I'm sorry, you said to come to the table in the order that we would like to speak and then designate --
>> then going here.
>> I have to leave, please excuse me, I have another appointment.
>> go ahead then.
>> I really wanted to briefly point out that the economic advantage of the difference in those 500 something homes and the 155 the state has for you is those other ones are the ones that the state maybe doesn't care as much about.
that's what makes Austin culturally unique and the landscape of the revolution, in the sixth and 70s here, those are the historical homes and the historical places that have brought the cool people and the cool industries that you sell this town for for semiconductors, all of that crap.
they're here because of the parks and the green space and these places that this historical exemption protects.
the house that I've lived in since I was three years old, we just finally got it last year.
I can tell you about the communists that stayed there, with john henry folk fal, when u.t.
would lecture, nobody would put him up.
that's just one place.
the composite of all of those places would be lost there, the difference between stephen f Austin, ...
it would be stupid, kind of is to not push that tourism angle.
what you are really screwing up if you let this go and cut off the homeowners working so hard to preserve them, you are letting go of the economic protection for that tiny amount of cultural preservation we have here that keeps us from being l.a.
please, please, care about the difference in the homes that Austin recognizes and the the homes the state recognizes for the economic betterment of all of your tax base.
all of it.
they're moving here because it's so cool, because these people and places are still here.
honor that.
I've got to go.
thank you.
>> thank you.
>> [ applause ]
>> thank you for your comments.
>> [ applause ]
>> okay.
>> I don't think that I want to follow her
>> [laughter] hi, my name is sarah mccullough.
when I spoke the last time I spent a lot of time talking about my own personal story.
I won't bore you with those details again.
I will give you a really brief summary.
my husband and I are in the middle of remodeling a home built in the 1860's, in old west Austin.
this program we wouldn't have purchased the home had this program not been in existence.
so I brought a few visuals.
because I think this helps sort of illustrate.
I can't see the camera.
this home used to sit right next to this building.
and in 1971, it turned into a parking lot.
it was raised and it's now a parking lot.
this home, on 12th street, that right behind -- sat right hyped this building, it is now an 8 story garage.
it was dem mowed in the 70s, also.
and demoed.
I'm here to tell you where people say that can't happen in Austin anymore, that simply today is a true story only because of the historic landmark program.
what happened in the 60s and 70s can happen again if this program goes away, I feel like the decision that you are tasked with making, you could be thers domino in -- first domino in every taxing entity in this city.
again, I will go back to my own personal story.
the property that we're sitting on, we stopped construction, we're waiting to see where the tax incentives land.
today we're contacting real estate agents.
we're seeing what we can do, what our options are and I know that that's wrong.
that's bad for the city.
I don't want that to happen.
I want that house to be saved and stay the beautiful structure that it is.
I know for damned sure it's better for the neighborhood than if we were to raise it and build condos on that property.
please, please, please wait and have -- and wait for the city to make their final recommendations and then one final point sort of talking to the financial realities of this program.
I can't speak to ms. Michelle's comments, legal comments.
but I can tell you that none of us landmark owners are being addressed by any city attorney, by any attorneys anywhere telling us exactly what our rights are and what our liabilities are.
because right now all we know is that we will continue to have to face the restrictions that are placed on these properties if we stay in the program and if we want to get out of the program, we've been told we have to pay large tax penalties.
that it's not easy to do.
many of us would probably back out if we had that option and there was no expense attached to it.
but -- but that's not where we are.
and -- and then finally this evening nail, I just have to say that I'm somewhat dumbfounded by the amount of attention that this is getting and in terms -- because of the financial impact and I have one last visual and that is -- that is for this county, I did -- I'm not an accountant.
and I'm in the even very good at math.
but I know that someone said earlier today that the cost of this program to the county, to your revenue, is approximately $1.2 million.
this is on tax revenue of over $400 million.
which means that that is less than one percent of your total budget.
and again I ask that you wait, please, until the city makes their recommendations before you take action.
thank you.
>> thank you.
>> any questions for ms. Mccul know lough, thank you.
>> I'm marie carmel, I live on west 29th street in the sears king house.
built in 1897.
I would like to dispel the notion that all historic property owners are rich.
we are soldly five figure family.
solidly a five figure family.
we bought our house almost 20 years ago, we would not be able to live in hyde park now, because it's historic, it's gotten really expensive.
we -- we rely on those tax incentives to maintain our home.
we've had to replace porches twice.
we've had to replace siding, 100-year-old siding constantly.
we have have to repaint the house twice, we're going on our third time of repainting the house.
we have an electrical box that was slated to be removed today that is threatening to blow up.
we can't afford to replace it without the Texas incentive.
that got yanked this year and we could not do that.
our taxes doubled this year because of the tax breaks were taken away from us.
none of that is really your problem.
this is not a welfare program.
but I'm saying that some of us really, really do depend on this to maintain our homes and we're not all west Austin wealthy people.
if you look where I live on west 39th street, I'm surrounded on three sides by apartment buildings.
when we bought our house, there were three people before us who backed out after the inspection report.
the bathtub was draining on to the ground outside the house.
we restored the house with our two hands.
we did not hire expensive contractors.
we did all of the work ourselves.
my brother came out and worked on with it me.
it's a labor of love.
I personally spent a week getting all of the records together to get the landmarking on the house because we wanted to preserve it.
our street is exactly what sarah was talking about.
our street was full of these beautiful victorians.
every single one of them was razed but ours for some reason, I don't know why.
you know the tremendous -- the threat to the houses, we landmarked it because we felt like there was a development threat to our property.
and, you know, we're proud to be stewards of Austin's history.
I really believe, I think you're wrong, ms. Gomez, in that there's no public good and there's only public good in the commercial buildings.
there's a walking tour of hyde park almost every single week I see people walk by my house with little pamphlets looking at the houses and reading about it.
there's a public education aspect to it.
lee elementary, when we started there, with our kid, eight years ago, was half of it was transfer students.
it's now closed to transfer students.
people who have moved into the neighborhood, people with children.
the reason why people move into the neighborhood is because it's historic.
because it's beautiful.
it wouldn't be that way if it wasn't for the landmark incentives.
it's a powerful incentive.
if you take it away, you are really undercutting historic preservation in Austin.
you are really undercutting the charm that Austin has.
it's a tiny price to pay.
what is it?
.48% of your budget?
it's a tiny price to pay for that quality of life in Austin.
and everybody benefits from it.
it raises property values, even on houses that aren't historic and those property values I think offset the -- actually really pretty modest break that you give us.
in answer to your question, we spend every penny and more of our tax incentive on maintaining our home.
every penny.
and this year we have not been able to main it because we did not have that tax incentive.
so yeah it's real.
it's not just -- you are impacting people's lives very, very real level here.
every one of you, I want you to consider that.
>> any questions?
thank you very much.
>> yes?
>>
>> [ applause ]
>> thank you, judge, Commissioners, my name is maureen
>> [indiscernible] I am a landmark owner.
and just sort of following off of what ms. Carmel was talking about, I do want to remind you all when we had that hearing back in April, one of the things that kept coming up for discussion was the idea of what is the economic impact?
what is the benefit?
and several of you sat and said yes that's something that we need to look at.
we sit here today two months later with no real assessment outside of maybe a couple of anecdotal stories from staffers, et cetera, on what the impact is, what all do you see?
I've heard now several times mentioned that the actual impact, the cost of this program to your budget when you take into account the added property very much new rea wash.
it might be .48% of your budget.
I would argue that you are actually making money off of it.
until we do an actual impact study, until somebody is willing to do that, I think it's premature to go ahead and pull the rug out from under folks like ms. Carmel and ms. Mccullough who are investing in Austin, giving people jobs and putting money back into the community and creating value for their neighbors, for their schools, for everybody else.
I do want to -- and also add on to -- to ms. Carmel's comments about private tours.
residential homes in Austin do open themselves up.
there's many organizations that use those homes for private tours as a fundraising tool.
hyde park does it every year.
in fact I went on one this about a month ago in east cesar chavez, which was lovely.
it was delightful.
we got to see a lot of interesting homes in that part of town.
and it's something that people enjoy.
something that people take in.
it's definitely an attribute of the livability of this community that so many people want to move here to take advantage of that.
it's -- it's an added benefit to y'all in terms of driving jobs to Austin.
lastly, I want to talk a little bit about the issues that were raised by ms. Michelle in terms of the entitlement mentality that she believes that folks have on this program.
yeah, you do have the right to take away tax breaks at any time.
but I would let you know that there are reliance, there is reliance on the part of owners on this program.
they do invest based on this program.
there is court precedent that suggests that you do need to offer some kind of an incentive for the servitude.
zoning servitude placed on people's properties that never goes away, you do have to pay a penalty to get out from underneath h zoning.
you might get a pass on the back taxes you still have to go through a zoning process, that he is an expensive process that there's no guarantee.
you may want to undo your zoning, but guess what, you may not be able to.
that's something that people are stuck with.
you are putting people in this position of creating costs for them, costs because they are either going to be without these -- these incentives that they relied on or you are causing them to spend a lot of money to try and undo the servitude that's on their property now that the game has changed for them or the rules of the game have changed without some benefit like grandfathering.
if you were to grandfather everybody and make your changes prospective, that would be a lot more just, more fair, that would give people certainty in terms of going forward.
it would give you all a sense of what your budget outlays are going to be for years to come.
and I think that pretty much covers it.
thank you.
>> any questions?
>> thank you.
>> thank you.
>> good morning, my name is jane hammond.
I'm an attorney --
>>
>> [ applause ]
>> -- u.t.
law class of '74.
which judge Biscoe was a significant player in my law school days.
but anyway.
>> I was --
>> [indiscernible] to be in law school then?
>> in ancient times.
>> I live on wooldridge drive in pemberton heights.
in the past two years, something like 40 houses in pemberton heights and old west Austin have been designated at historic landmarks.
no indication of need has been presented, no indication that the houses were threatened with demolition, defacement or in any type of danger that would suggest that they needed a specific kind of financial incentive to remain preserved.
most of the people who applied for these exemptions have lived there for several years and they discovered that by applying for these exemptions they could cut their property taxes, which averaged in pemberton heights, $25,000 a year.
they could cut their property taxes by about half.
these are my neighbors, I know what I have to pay.
I know what they pay.
I know what their houses are valued at.
it's this kind of issue that has thrown a wrench into the whole historic landmark process over the last couple of careers.
it's sort of an abuse of a system that may well serve those people who are needing and willing to preserve valuable homes.
valuable residential properties.
it's the tax cut, the tax loophole contamination that has made a mess of this.
it's bm!um thd the demonstration of need or the demonstration of some kind of6i requirement to justify the expenditures that take place.
in addition to the needs part of it, in my neighborhood, the 20 some houses in my neighborhood designated have been deemed historic for such reasons as one house was built by the first creator of a cash only lumber business in Austin.
historic guy.
>> repeat that, could you repeat that statement?
>> the house was developed, initially, by the first owner of a cash only lumber business.
in Austin.
>> cash only.
>> the most recent house, the newest house in my neighborhood was built in 1960 and it was built by justice
>> [indiscernible] walker, formerly of the Texas supreme court.
a fine man.
given that criteria for historic importance, there are existing -- there are living judges, ex-judges of the Texas supreme court who could qualify to have their existing houses designated as a historic landmark in order to gain the 50% tax cuts that were in place prior to the withdrawal of aisd and a.c.c.
one other point that I would like to make, whereas in hyde park it may well be that they have tours of the homes in the neighborhoods, but as a resident of pemberton heights, I would suggest to you if for example students, Austin students, say high school students decided to have a tour, say a walking tour of pebble without having prior -- pemberton heights, if a group of students from east Austin came and started walking down the neighborhood streets in order to eyeball, take pictures, look at and consider the historic landmarks that are on my streets and the streets over, I guarantee the police would be called.
911.
because police are called if a guy is soliciting political contributions.
it happens.
I am on the listserv.
what I would suggest to you is that some kind of moderation in terms of the free flow of these designations needs to take place.
and they are expensive.
yes, I am paying more in my property taxes because the people down the street are paying half of what they used to pay.
they are my friends, they are my neighbors, of course they ought to do that, it's fair, it's legal.
but something is wrong with the policy here and I thank you for listening to this.
>> thank you.
>> I have a question for you.
>> do you anticipate that a house in your neighborhood that's comparable to your home has a tax exemption, and therefore a servitude as some would suggest, do you anticipate that it would sell for less on the market than yours?
>> absolutely not.
I anticipate it would sell for more.
when people are looking what are the criteria, well the space, the street, the number of bedrooms and bathrooms, but who doesn't look at the amount of property tax that house has been paying?
when you are looking at taxes that are in the vicinity of $30,000 a year, if my house is -- if I'm going to have to pay that on my house and the next door neighbor is only paying 15, which one -- the value of that over a period of time is very quickly showing that the -- my next door neighbor is going to sell better, faster and for more because the premium is going to affect the value of the house.
in fact I've actually considered renting -- doing the historic research on my house and investing the 30 or $40,000 to get it to look the way it did when it was built in the '30s, so that I could qualify for this tax historic landmark tax exemption because I would get my money out of it very quickly.
it's a screwed up system right now and it needs reform in a significant way.
>> thank you.
>> thank you.
>> thank you.
>> good to see you again.
>> thank you for your comments.
>> yes, sir?
>> I'm arrived hardin, a native Austin, born in 1950 at old seton hospital.
one of my life long loves is the historic preservation.
I own historic landmarks in the city of Austin.
I'm a strong supporter of historic preservation.
suffice it to say there's more than one point of view about how to go about preservation and fostering it economically.
I guess I have a longer view, I'm at odds with a lot of the testimony that you will hear from the heritage society folks because I think the program needs to be sustainable and needs to be applying these precious moneys to where there is a need to where you do encourage bringing landmarks into the protection of the program and not wasting the money.
I brought a presentation which I think you all have, it's a bound booklet, also a powerpoint slide that I would like to go through real quickly.
I would like to call up four things to mind here for us to think about.
first of all, a lot of the stories that you are hearing about the historic house preservation is maintenance.
these are problems that these people I believe genuinely face in many cases, not in all cases.
but they are no different from a lot of problems that any of us face with older homes.
there are thousands and thousands of older homes built that are 50 years or older, I think in a few years nash, phillip, copus' homes will all be qualifying for historic consideration.
do homeowners that have to maintain older homes face financial challenges?
yes, they do.
I guess the question is how many of them are you willing to subsidize, especially with recruitment through historic districts which will bring you in tens of thousands of homes.
so I guess the first point is what's the difference between a historic home and an old home in terms of maintenance.
I don't think in most cases there's not a need.
secondly the notion that somehow today if the subsidy for the program, not the designation and maintain of the program itself, but the economic aspect were to go away, that houses would be put at risk.
it's true in 1970s, we were losing historic buildings, very precious ones, line the shot tower, I'm sure by good friend charlie betts will remember that one.
the historic commission has done its job, is protecting, we've had a number of other ordinances that our city imposed, for example, you cannot get a demolition permit in the city of Austin without going through a review of the historic landmark commission, it's not possible.
so -- so the link between the economic and the loss of a house, those are different issues.
third, I want you to consider that you are now giving, the city is now giving through its program, historic tax exemptions to new additions, some cases the additions are bigger than the house.
I will give you some examples of those, we need to deal with that.
y'all's proposal does not deal with that.
I think the city is talking about dealing with that.
if somebody were to-- large guest house, is that historic?
does that get to be tax exempt, also.
equity.
you all are faced with the task of weighing is the person over 65 or in a homestead more needy or in a historic locally designated landmark and I'm glad I don't have to make that decision.
because if you put all of the folks in town in this chamber here to testify that we're over 65 or handicapped or disabled veteran or living in a homestead, I am sure that you would hear a lot of very, very compelling stories.
one of the things that troubled me is that our program currently is really being used as a substitute for neighborhood planning.
it's a back door down zoning.
you will see this in a local historic district especially.
there's a lot of activism that's taken part.
neighborhood activism, in the heritage society.
I think those are really different issues.
we have tools to preserve neighborhoods and we have -- we have a different set of standards for what is a landmark.
perhaps what we need to do is separate further designated landmarks and giving them the tax benefits, maybe that needs to be a two step process.
I think this money needs to be directed forly, I think the designation of landmarks needs to be much more discriminating in our city or we're going to lose the public trust in the whole program and I want to save this program.
let me show you some examples.
>> okay.
first of all, let me do a little biography for you.
this is the -- the roy thomas house.
he was it is deep of the u.t.
architecture apartment.
designated as historic.
I saved this house from renovation, these are all properties that I worked on.
I saved this house from demolition.
and -- and moved it down the street to 16th and san antonio street.
we restored it at great cost.
let's see if I can work this thing, sorry.
back in happier days, the heritage society actually gave me a reward for that.
this is an office at 7th and guadalupe, james brown house, the oldest building in the bremob district.
what's the difference in a landmark needing tax relief money versus an older house, just any older house.
this particular building was built on a rock.
they cleared the site by hand, chiseled the rock and built the building with solid masonry rubble walls a foot and a half thick.
any time a concrete wall drives down the street, the plaster cracks, I have to fix it.
I can't make that go away, I can't make the windows that rattle, single pain, old glass, thermal pane.
this is a classic section 1124 compliant building, which will need money for the rest of its life that is extraordinary.
these houses have very different needle.
this is the white springfield house that I restored back in 1984.
the tmi castell, I restored that in 1984, that actually sat partially on one lot.
we purchased seven lots, took two additional lots, added it to the grounds, zoned some of those historic, that's the reason that it's protected today.
this is santa fe railroad depot in lampasas where they give zero tax exemptions for restoration, we just finished that restoration.
the state landmark.
and here's a wpi post office up in lampasas that we are restoring now.
in my neighborhood, this is a map of old enfield.
four blue arrows, the one that's pointing down is where I live.
the corner the
>> [indiscernible] the other three arrows are two --
>> [one moment please for change in captioners] captioners]s.
>>
>> > exactly what that does.
the recommendation was not to have a ceiling.
>> not to have a ceiling, what, the public needs to understand that.
>> no cap.
>> it means that the current city of Austin -- the tax exemption, on commercial property, would be the same as the county's.
>> okay.
>> recommendation.
we're in 100% agreement on the --
>> we would just -- the staff's recommendation is to keep the -- keep the historic exemption for commercial properties the same.
>> that's correct.
>> last year and the year before and the year before that.
>> that's correct.
>> exactly.
>> so I want to make sure that's understood.
because I don't want anyone to leave here without -- without -- without what's actually being recommended.
now, also, let me say this.
there was a demonstration, well, maybe not a demonstration, per se, but an initiative set forth by groups in east Austin that -- that have been overwhelmed with not having the ability to work on their existing homes, homesteads.
and the outcry from those community folks was this.
they said it would help us a lot if -- for the affordability and also maintenance of our existing homes that the city of Austin would also allow a 20% homestead exemption for those properties.
Commissioner you did bring up a good point about the mcmansions.
those are some of the same outcries that I have continually heard in my community.
and of course I'm a strong advocate of ensuring that the city of Austin since they are the generator of -- of governmental gentrification, also be the generator of embracing a 20% homestead exemption for the residents of Travis County.
which applies to everyone.
so -- so as Travis County does.
so -- so this -- it's not that we are closing the door with any relationship with the city of Austin.
I have not heard any court member say that.
that oh, we can't -- we're not going to work with the city of Austin.
we -- there's a lot of things that we have in these recommendations today.
that is in concert with the city of Austin.
you've heard the city of Austin person, represents come in.
what we have in common.
several things.
but a $2,500 cap was one of them on -- so -- so if what I'm suggesting is that we need to start the process somewhere.
the past -- the past of working with the city is I think through this particular avenue, not shutting the door on them.
I think we need to move forward with what we have on the table.
of course the city, us and the county can still work together in the future.
it's not a slam dunk here.
don't want to consider this as a slam dunk process.
no it's not.
we have a lot of unknowns, a lot of things we can work out and must work out, I want to make sure that's illustrated.
but in the meantime we have folks over there, especially in my precinct that need some recognition from the historical commission just as they recognize folks in the other parts of the city.
we've heard testimony to that.
so I think we need to move forward, in my opinion, but then again it takes votes on this Commissioners court to do that.
I'm going to just shut my mouth, judge, and let's see what happens.
>> I will give my thoughts and then recognition Commissioner Eckhardt for a motion.
I believe that the county should delay action and indicate our intention to work with the city of Austin to address this issue.
we have heard from residents that the city wants to fix it and I've heard from the mayor of the city of Austin the same thing.
he believes litigation may be completed by December of this year.
whether it's December this year or March of next year, I think we would use that time-wisely by indicating to the city how we would like to see the -- the historic tax exemptions changed and then work with the -- with the city's committee to -- to -- to achieve a program that's acceptable to us as well as the city.
the other things that I think we should work with the city on the designation process as well as the enforcement process, the county historically has gotten a free ride.
it may be that our contributions should be a little bit more significant than that.
the other thing is that -- that we do have a heritage society and the planning commission at the city of Austin that I've been working on this issue historically.
I think that we should indicate the intention of Travis County to work with them as well as the city of Austin.
and when I say give the city of Austin a list of our points, if in fact we think that greater emphasis should be placed on designating historical sites, in low income community, then we ought to too that.
>> yeah.
>> --
>> outing to do that.
if we -- ought to do that.
if we believe a cap should be in place we should do that.
if we believe commercial properties should be treated differently, we should do that.
we just have not been real proactive historically in this area, the so-called problems surfaced about this time last year, I guess, caused us to get a bit anxious and to try to move.
so in my view, we really should delay action but indicate to the city of Austin we plan to work on it and then give the city a list of concerns and recommendations that the county believes appropriate.
the chair will recognize Commissioner Eckhardt for a motion.
>> I think that -- that to the extent that we can improve the circumstance today, we should.
I think we owe it to all taxpayers, whether they live in an historic residence or not to adjust what we can.
when we can.
and as soon as we can.
so it is for that reason that I move that we, for this year, adopt a $2,500 cap, on residential properties.
that that applies for this year and we continue to work with the city with regard to the -- their program, the criteria for their program, as well as working with our own historic commission, the Travis County historic commission on setting county-wide preservation goals.
but I think we can set that cap at $2,500 today to be effective for this tax year and I think we should.
I think the heritage society has recommended that cap.
and if -- I think we can feel very confident that if the heritage society --
>> they are saying no.
>> we don't think that's -- we -- I don't -- we don't think that's accurate.
we don't think that --
>> I believe that was the testimony today.
>> I i they said if you must act then -- would that be applied to -- to properties already receiving the exemption?
>> that would not change who receives the exemption.
all that would be is a cap on the residential -- on the benefits to residential property owners that currently or in the coming months receive the designation.
you.
>> about it would be applied proper spectively or retroactively.
>> it applies this year as any tax exemption applies.
you set it, then it applies for this year.
just as we set our homestead exemption every year at 20% or we could set at 15% this year if we wanted to.
it is no different.
we would set the historic exemption for residential properties, that -- that are designated either under 1141 a or 1141 b.
whether it's state or whether it's city.
that the residential benefit is capped at $2,500.
>> is there a second?
>> I will second that, judge --
>> seconded by Commissioner Davis.
>> let me say this, also.
I do not know where this motion is going to go today.
but I do know that -- let me ask this question.
if the city had its act together and there is a lawsuit and even if it's delayed until December of this year, how would it affect this tax year as far as certified tax roll business, I'm asking staff that, how would it affect this tax year?
would that be similar to what happened the prior year before where we couldn't end up doing anything because the tax year, we lost the opportunity of the tax year?
>> it depends on the action of the court or in the case of the city council the statute requires action by the Commissioners court on an annual basis to set the exemptions.
you either have to vote to continue your current exemptions or modify those.
if you take no action, there will not be a historical exemption for 2011.
>> unless we vote to leave the current exemptions in place.
>> that's correct, that's correct.
let me -- let me make a comment on the motion.
can I --
>> if you want to clarify the motion, yes.
otherwise, no.
>> okay.
>> this motion applies to county property, homestead properties, period.
>> residential properties.
because in some cases the homeowner, the -- the homeowner does not live in the property.
they still qualify for residential historic exemption, whether they live in it or not, which is not the same as a homestead.
>> clarification of the impact of the motion.
>> yes, judge, this is a clarification.
the tax code section that we're talking about is 11.24.
>> I'm sorry.
>> section 1 and 2.
it's 11.24.
>> what's the importance of that?
>> well, I think that a different section was just cited.
>> that was my mistake.
>> substitute motion.
>> make sure that you have the right section.
>> we're trying to get through this, mr. Nellis.
the substitute motion is for us to leave in place the current exemptions period.
>> second.
>> that we try to work with the city of Austin to fix what we have identified as a problem and we understand the city has identified it, too.
that was seconded by?
>> two seconds.
>> two seconds.
>> my only question then is -- is if we leave it in place, then does that -- how does it treat the commercial properties.
>> the same way that we have treated them historically.
>> until we go into further information?
okay.
>> discussion on the motion?
chase.
Commissioner Davis?
>> thank you.
>> for whatever reason that I stated earlier, dealing with lawsuits, we have been privy to deal with lawsuits on this Commissioners court.
sometimes they are dealt with immediately, expediently and then sometimes it's a heck of a long delay in dealing with lawsuits.
there's no guarantee on when a lawsuit is -- can actually be settled as far as time line is concerned.
when I hear that -- that they'll have things wrapped up and I think the judge did say that the mayor referred -- preferred to having things wrapped up by December.
let say it goes beyond December.
what impact will that have in this particular regard?
will it end up affecting us into another tax year of where we were before when this same item came up before the Commissioners court when we done nothing about it, then the folks still don't have any relief as far as -- as far as equity when it comes to these historical exemptions.
>> I think that you -- you can vote any time on 2012, next year.
I think the motion on the -- that's been made now is to leave the current exemption in place.
I would ask for clarification.
if you are willing to --
>> I need clarification on that.
>> well, what I'm saying is if in fact there's more information from the city and the county in December or January of 2012, you can vote then for next year's exemption.
>> yes, sir?
>> I would like to have -- have clarification on the motion.
>> okay.
>> we do need to have a motion on the 65 and disabled after this motion.
you have not made at this point you have not approved the current exemption or an increase to those exemptions for 65 or older.
that is included in the committee's recommendation.
I would like for you to include that.
>> but didn't we approve that --
>> we did not.
>> no.
>> judge, is that a part of your motion --
>> no, we will cover that second.
>> I want to make sure --
>> are we posted to do that?
laurie says that we're not posted to do that.
we will make sure that we are next week.
>> okay.
>> over 65 and disabled.
we need to address those residents out there.
>> you do need to address the hospital district next week, also.
that's not in this --
>> that's not in this recommendation.
okay.
>> all in favor of the motion?
let's show Commissioners Gomez, Huber and yours truly --
>> there's one motion already on the table.
the substitute motion --
>> you have to
>> [indiscernible]
>> I sure do.
I sure do.
so the first vote is a procedural vote whether we take the substitute first.
or not.
all in favor of taking the substitute first?
show Commissioners Gomez, Huber and yours truly voting in favor.
voting against Commissioners Davis and Eckhardt.
we are to the original motion, which is to leave the current exemptions in place but to work with the city of Austin as appropriate to fix what we have identified as a problem.
any more discussion?
or delay?
all in favor?
show Commissioners Gomez, Eckhardt, Gomez and Huber, it's late in the day y'all.
yours truly voting in favor of the motion.
show Commissioners Davis and Eckhardt voting against it.
that motion carries by a vote of 3 to 2.
thank you, public, for your input.
staff, thank you all very much, also
>> [ applause ] we were hoping to get to item no.
31 this morning.
and let's see who is here.
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