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City, county may be at odds on tax caps

Thursday, April 6, 2006 by

Elfant says lower tax caps bad for local governments

It’s the first sign of a battle, or at least a misunderstanding, between the City of Austin and Travis County on the property tax front. Precinct 5 Constable Bruce Elfant says three City Council members have taken a right turn and are headed into the woods on their proposal to ask the Legislature for authority to cap local residential property appraisals at 5 percent per year. Elfant says the plan to limit appraised value would disproportionately help wealthy homeowners at the expense of poorer ones. It would also hurt local governments and play into the hands of Republicans, he said.

Council Members Betty Dunkerley and Brewster McCracken, who along with Council Member Lee Leffingwell have said they would ask the Texas Legislature for a local option to cap property values at a rate below the current 10 percent increase per year, disagree with Elfant’s assessment.

Elfant, a longtime Democratic officeholder, sent out an email blasting the idea of lowering the cap after reading about the proposal. He asked those gathered at a meeting of Democracy for Texas last night to oppose lowering the caps. Following his speech, Elfant told In Fact Daily that the proposal would represent an about-face for the City of Austin, which has lobbied against lowering appraisal caps along with the Texas Association of Counties in the past.

But McCracken said the most common plea he has heard while campaigning in East Austin is for property tax relief. He and Dunkerley said East Austin homeowners close to downtown suffer disproportionately when their neighbors sell their homes and someone else comes in and builds a bigger house. Homeowners in neighborhoods like Bouldin and Travis Heights in South Austin also are suffering greatly increased taxes as a result of gentrification, McCracken said.

Leffingwell stressed the idea that the city would only be asking for an option of lowering appraisal caps. “Brewster is the sponsor and he approached me. I made it clear that I was supporting the city having the flexibility of doing something like that; but I want to look at it very closely;” Leffingwell said. If the impact is disproportionately going to help the wealthy as opposed to lower and middle income taxpayers, he said, “I don’t know if I could support it.”

In his email, Elfant wrote, “While any kind of tax relief sounds good at first glance, appraisal caps would create an unequal system of taxation, limit the ability of local governments to respond to unanticipated emergencies (such as Hurricane Katrina) or keep up with demands for services during economic downturns or periods of high growth. For those reasons, appraisal cap proposals have been opposed by the Texas Association of Counties, Texas Municipal League, Travis County and (at least until now) the City of Austin.”

Elfant also acknowledges that the reason such organizations opposed appraisal caps in the past is that they might lose control of their budgets. He wrote, “At least two studies have concluded that appraisal caps would restrict the flexibility of local governments to respond to changing needs, emergency situations and state and federal mandates.

Well respected Texas economist, Dr. Ray Perryman concluded that "appraisal caps and other limits have created substantial problems in providing adequate revenues in states where they have been implemented, resulting in major disparities among taxpayers, increases in other taxes, and significant increases in state transfers to local governments."

Proposition 13 in California is perhaps that most well-known example of the dire financial straits that local governments can find themselves in as a result of placing artificial caps on appraisals.”

The constable said the city should join the county in offering homestead exemptions instead of caps. That, he said, would “provide the most tax relief to those at the lower end of the economic scale.“ He told In Fact Daily the city could offer specific amounts—such as a $10,000 for homeowners.

However, Leffingwell said a state law prohibits the city from granting an exemption in dollar amounts. He said he consulted with both the legal staff and the chief financial officer of the city to make sure he understood the law. The city—as well as the county and school district—can only offer a percentage exemption, said Leffingwell. So, for example, the county grants a 20 percent exemption and a person with a $100,000 house could get a $5,000 exemption. A person with a $2 million house would get a $400,000 exemption. There is a minimum exemption of $5,000, he said.

Dunkerley, the acknowledged financial leader on the Council, said, “What we’re trying to do is prevent the big peaks that homeowners get in their appraisals….You're just trying to levelize your appraisal …like having the same utility bill every month.” This would especially help with a particular scenario she has seen, she said. “A big house goes in and the value goes up and then all the small houses around it their value goes up, too . . . Any place where you're having a lot of gentrification going on, it will help.”

Each local entity would have the option of lowering it down to 5—but it would be based on every community deciding what they could afford.” She said most of the scenarios the city did for the Council involved a 7 percent cap.

Elfant told assembled Democrats last night that “appraisal caps came straight out of (Gov.) Rick Perry’s office. It took the Democratic members, the Municipal League, the Texas Association of Counties and all the members who used to be City Council members and county commissioners” to prevent passage of the earlier bill lowering the caps. He urged them to contact the City Council to change their minds on the issue.

A towering dilemma:

Mueller Coalition pushing for aesthetic design for water tower

The Mueller Neighborhood Coalition agreed to support the construction of a water tower on 51st Street. Now the group wants to make sure it is not a decision they regret.

The 51st Street Water Tower is the first of six towers the city will be building in coming months. Council will consider a contract today that is one of a number of milestones in the first water tower contract. In this case, it’s an amendment authorizing another $1 million toward Camp Dresser and McKee Inc’s engineering design of the tower. At this point, the total cost of the project is not to exceed $1.7 million.

This is not just a tank on stilts to the member neighborhood associations around the tower site, which sits about 800 feet from the nearest home. This is a chance to design an urban infill infrastructure project that matches, and complements, the planning going on at the former Mueller airport site. Jim Walker, who chairs the coalition, said the tower was both an opportunity and a precedent.

“We don’t want to get into a technical argument about why this needs to be in the area. We understand why,” Walker told a small gathering of the Mueller Neighborhoods Coalition last night. “We agreed to this, and we just want to be able to look at it with a clear conscience.”

The city has narrowed the choice to four designs, ranging in cost. The options can be seen at Council members appear to be leaning to a mid-range compromise option, given the city’s commitment to limits on water rate increases and a limited budget. But as Rick Krivoniak pointed out, this is not just a one-time budget item. This is a 170-foot tower, visible from across the city, that will denote Austin in the same way the Moonlight Towers do.

Both Walker and Krivoniak will be at Council today to plead their case for an investment in the more attractive lattice design water tower, which is the most expensive of the four options presented by the city. The difference in price on the project, according to the city, is $2.3 million. Architect Girard Kinney, who also was at the meeting last night, says his estimates on the price difference are closer to $1.2 million.

The neighborhoods and the city have been meeting for well over a year on the project, which raised far more concern among neighborhood groups than the Water and Wastewater Department initially anticipated. Walker noted that if the city thought they had problems getting “buy in” from the neighborhoods around Mueller, they would certainly see even more concern out of Montopolis, which is where the next tower is scheduled.

County staff mediates traffic dispute

Calming devices proposed for street between Seven Oaks and The Bluffs

Travis County’s Transportation and Natural Resources Department (TNR), hoping to mediate the fight between the Seven Oaks subdivision and neighbors in The Bluffs, is proposing a complicated plan of traffic calming concessions.

A gate now blocks residents of The Bluffs from using Marly Way to get in and out of their subdivision. The developer of neighboring Seven Oaks, who is still completing the street, would prefer to see the access to Marly Way, via Olympus Drive, continue to be blocked.

Earlier this week, Joe Gieselman, TNR executive director, provided a complicated list of progressive steps to address traffic speed and volume in the neighborhood, while still giving The Bluffs access to Seven Oaks’ major arterials. The plan would start with the removal of the barricade and the striping of Marly Way for pedestrian access, followed by a progressive series of traffic calming measures, starting with a choke point and then the use of circles or speed cushions on Marly Way.

Then, once traffic on Olympus reaches an average of more than 400 trips per day or 60 trips per hour, traffic could be disallowed in each direction during peak rush hours, Gieselman said. That would specifically address concerns about traffic volumes.

The county, unlike the city, uses traffic calming measures only as a last resort in many situations. And, as attorney Ann Price noted, the county has never applied traffic calming in neighborhoods that don’t want it, and The Bluffs definitely didn’t, or at least didn’t want it until the traffic calming measures were justified by traffic counts.

Price said no evidence offered by Seven Oaks would indicate that traffic from The Bluffs would be a serious hardship on Marly Way. Marly Way was built with the understanding that it would serve both subdivisions, and the volume levels suggested by the existing homes hardly justified the use of traffic calming, much less a choke point, which would narrow the lane so that only one car, in one direction, could pass at any given time.

Tom Rogers, arguing on behalf of Seven Oaks, said traffic volumes on and around Bee Caves Road had escalated since Marly Way was platted. He, too, did not favor the choke point but noted that it was a county proposal and not one from the residents of Seven Oaks. Seven Oaks residents, hoping to preserve low traffic and safety for children on bicycles, would have preferred to keep the road private. Residents compromised only to try to find some middle ground with the neighbors, which Rogers noted usually means that everyone should be sufficiently unhappy with the solution.

County Judge Sam Biscoe made a motion on the issue, with friendly amendments from other commissioners. It would be the county’s intention to make all roads in Seven Oaks public roads, directing the developer to complete his punch list as quickly as possible so that the roads could be handed over to the county for maintenance. Biscoe requested a status report on the developer’s progress in 30 days.

The gate on Olympus, which blocks access to Marly Way, would be replaced with one that complies with fire code standards and then removed after the Parade of Homes. That would put the opening of the road in the range of July 15.

Traffic calming devices will be installed but only where needed. Commissioner Gerald Daugherty stated his strong opposition to the choke point proposal, which appeared to win applause and support from both subdivisions. He also expressed the hope for a six-month study of traffic counts before any action was taken and also setting a reasonable speed limit, possibly in the range of 30 miles per hour.

©2006 In Fact News, Inc. All rights reserved.

Council agenda . . . A moderately busy day looms at City Council today. The Council will hear the second in a series of staff briefings on the 2006 Bond Election. This briefing will be on Facility Renovations. Council members will also hear a presentation on the new Federal Emergency Management Agency (FEMA) Floodplain Mapping Project from the Watershed Protection and Development Review staff. The proposed new map system will have a major impact on zoning in the city. It will be unveiled in the near future and local residents will have 90 days to comment on the accuracy or to propose changes. The final version of the map will be out in about a year. . . . Expect another long executive session this week. Council members will be hearing from the legal staff on matters involving zoning on the Champion sisters tract at Loop 360 and RM 2222, the Save Our Springs Alliance lawsuit over grandfathering rights and AMD's plans to build a new headquarters, and a review of the judicial ruling forcing the council to rewrite the ballot language on Charter Amendment Proposals 1 and 2 on the May 13 ballot. . . . Council members will also consider approving a resolution urging the Legislature to give cities the ability to limit the annual increase in property tax appraisals. (See above) . . . Council will look at a couple of controversial zoning ordinances. One is at 2100 Parker Lane in South Austin, where an abandoned mansion and surrounding property will be turned into a condominium complex. There was significant neighborhood opposition to the project, and it was sent to the Council without a recommendation by the Planning Commission. Staff was asked bring back conditional overlays for today's second reading. There is also a request to change the zoning on property at 515 W. 15th St. from general office to central business district to allow a 60-foot tall, mixed use complex on the property. Area neighbors oppose the change and are expected to show up at Council today. . . . Campaign fundraiser . . . The Texas Young Professionals are planning a fundraiser at 5:30pm today for Place 2 Candidate Mike Martinez. The event will be held at Mother Egan's on West Sixth Street. Martinez campaign will also be walking this weekend, starting at 11am at his campaign headquarters at 2800 Gonzales St. . . . Clean Sweep . . Keep Austin Beautiful's annual Clean Sweep begins at 9am this Saturday, with a party to follow. Clean Sweep is a citywide cleanup taking place all over Austin, followed by a "Thank You Party" at Fiesta Gardens on Town Lake with live music by The Damnations, event T-shirts, free lunch, a rock climbing wall, kid's activities, door prizes, environmental exhibits, green art and much more. Volunteers are invited to join at existing "cleanup spots" at Town Lake and other creeks throughout Austin or hold a cleanup of your own at your school, favorite park, on your street or other public space. Contact Alanna at 391-0622 to join a KAB "cleanup spot."

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