37° F
10 By Rollingwood Mayor Bill Hamilton
Special to the Picayune
To coin a phrase, “two things are certain in August: (1) hot, dry weather, and, (2) city budget discussions.” Rollingwood is no exception.
First, it appears the good rains have subsided and we are still in Stage I of voluntary water restrictions. Homeowners residential watering should be scheduled for odd-numbered addresses on Wednesday and Saturday and for even-numbered addresses on Thursday and Sunday. Commercial addresses should be scheduled for Thursday and Sunday, also. With us getting back to our peak usage and with most vacations over and school returning, we will conduct our second residential water customer survey later in August. This will help us determine the benefits from the recent Edgegrove water improvement project and to begin identifying the next water project(s). Meanwhile, our Rollingwood Utility Commission will begin its process of reviewing the needs criteria to identify and prioritize future projects. Efficient water distribution, usage and conservation cannot be overemphasized, especially in these extreme weather conditions.
Second, the City Council has had several and will continue to have more budget workshops toward developing a city budget for the new fiscal year beginning Oct. 1, 2010. I expect to be able to complete an initial budget for public review and hearings no later than Aug. 27, with formal budget hearings scheduled in September. Our duty, as always, will be to draft a budget which provides city services at essential, efficient and cost-effective levels. Our property values in Rollingwood did decline this year, as they did across the region, and our building fees are down, consistent with the economy. We will need to give a closer look at all our revenues, including property and sales taxes, before we commit to spending priorities. In so doing, we should also work hard to keep our taxes and fees at reasonable levels.
With this background, our next regular monthly City Council meeting will be Wednesday at 7 p.m. We will have several highlights, including a discussion of a proposal to shift some of our wastewater charges to property taxes, reducing wastewater rates and increasing property taxes. We will also consider a proposition to call a special municipal election this November to clarify the authority of the Rollingwood Community Development Corporation to use Type B local sales and use taxes for water supply facilities and water conservation programs and make our authority consistent with recent state legislation. We will get an update on the interlocal agreement with Travis County for re-paving of Edgegrove Drive and a portion of Rollingwood Drive.
Finally, we will have another council workshop on the budget and will receive at least initial recommendations from the Park Commission on the 2011 operating budget for Rollingwood Municipal Park. This will be a timely discussion since our park is now almost “built-out” with some remaining items, and we will need to develop a reasonable level of support for the park, which maintains it to the standards we all expect.
All citizens are always invited to attend and participate in the governance of our fair city.
Shifting wastewater costs to property taxes is unfair: it will punish those properties with higher valuations. It will also cost almost all residential customers more than they are paying now. Wastewater fees (and all other utility fees) should be based on usage, NOT property value which can be highly arbitrary.
Sara Hutson has talked about this for years — wanting to go after newer or remodeled homes to pay more than older homes, regardless of how water is used in them. I think Ms. Hutson’s might be one of the few to benefit from this based on her homes lower value. This is big government “redistribution”. It makes me angry.
Wastewater costs to citizens would vary based on property value?? Punish nicer homes and give the crappy properties in Rollingwood a cheaper ride. Way to encourage property improvements, Sara. Very slick.
By my calculations, Ms. Hutson’s proposal will increase my wastewater base rate by 70%.
SARAH HUTSON’S SEWER RATE PROPOSAL WILL TRIPLE YOUR PROPERTY TAXES!
In an attempt to demonstrate a savings to individual residents from recouping sewer costs through the property tax, Sarah Hutson has prepared a seriously flawed spreadsheet that drastically understates the property tax increase necessary to achieve her sewer rate proposal.
Sarah calculates the property tax rate increase by dividing the $775,000 capital charge the City pays to LCRA by the total of Rollingwood’s 2009 property tax values, resulting in a property tax rate increase of $.172/$100 (raising the tax rate 150% from $.112/$100 to $.284/$100). She compares this property tax increase for individual residents to a sewer rate decrease that includes both the elimination of the $65/month capital charge and a 40% decrease in the winter average (volume) charge. But the revenue loss caused by elimination of the capital charge and a 40% decrease in the volume charge is much, much greater than the $775,000 she used to calculate the property tax increase. The City will have to come up with the revenues to pay for its sewer costs from somewhere – if not from sewer rates, then from property taxes.
While Sarah says that commercial customers would have to be given corresponding rate decreases, she claims to be unaware of the consequences of either the residential volume (winter average) rate decrease or the corresponding commercial volume charge decrease and elimination of the commercial capital charge. But the sewer revenue reduction from these proposals is easily calculated from the analysis presented by the City’s rate consultant in June, 2010. Elimination of the capital charge (residential and commercial) would reduce revenues by $693,311, and a 40% reduction in the volume (winter average) charge would reduce revenues by $229,223.20, for a total of $922,534.20. To replace these lost revenues with property tax revenues, the tax rate would have to be raised by $.209/$100 (not $.172/$100), almost tripling the property tax rate from the current $.112/$100 to $.321/$100.
The correct calculation to figure out the effect of Sarah’s proposal on you is as follows: (1) multiply your current property valuation by $.209, (2) then subtract $780 (=12x$65), and (3) then subtract your winter average gallons (in 1000’s) times $4 times 12. If your home valuation is more than $511,004 and your winter water usage is average, then you will be worse off under Sarah’s proposal. (Residents who conserve water in the winter will be penalized even more.) So who benefits from Sarah’s proposal? The answer is clear — commercial customers.
You will receive no federal income tax benefit at all unless you itemize deductions. If you itemize, because of deduction phase-outs and ceilings, the alternative minimum tax, and varying marginal tax rates, you will have to rerun you tax return with a larger property tax deduction to see if you will receive a tax benefit. Many residents who itemize deductions will receive no benefit at all.
The additional burden on residents will compound in the future as property values increase. If property values go up 10% next year, your already tripled property tax will rise 10% more with no corresponding reduction in your sewer bills.
Sarah can pander to the public by presenting bogus numbers to make people think that only rich people will be harmed by her proposal. But the cost of our sewer service will not disappear and must be paid for out of revenues from some source – property taxes or sewer rates. Ultimately, residents will be left holding the bag. Roxanne McKee’s effusive adulation of Sarah for finally bringing us numbers showing the effect on every resident of collecting sewer costs through the property tax is entirely misplaced. If it looks too good to be true, it probably is. Do the Math.
As I stated at the meeting, the City Council is in the early to middle stages of examining the math and I appreciate that Sara took the effort to list each home in Rollingwood in a spreadsheet, performed some calculations, and presented it to the public for input. It was made clear at the meeting that the spreadsheet presented was a Draft only, not a final product. Sara also invited anyone to contact her personally about this matter, which is something that I applaud.
In my opinion, it would be better to voice one’s concerns and suggestions at City Hall where Council members and the public can openly exchange ideas and weigh the pros and cons of proposals. To sit quietly at meetings when you clearly have different ideas and wait until you have the opportunity to blog anonymously and cast aspersions on Council members’ alleged motivations is unproductive and divisive. We need to move forward in an open, positive way and reject politics as usual.
Sarah has been unabashed in stating that her purpose is to charge owners of expensive houses more, stating that expensive houses could not have been built except for the sewer system. But under her proposal, owner of modest homes would pay more, too. That is what Sarah’s spreadsheet misrepresents. If Rollingwood residents want to pay more so that commercial sewer customers can pay less, they should make their views known to the City Council. But they should know the facts so that they can Do the Math.
Most Rollingwood residents cannot attend City Council meetings and have no source other that the Picayune to find out what members of the City Council are proposing. Kudos to the Picayune for providing a forum for the exchange of information about City government. If Ms. McKee wants the public to know about what Sara is proposing, perhaps she should instruct the City Staff to mail the Picayune article and Do the Math’s blog to everyone in Rollingwood.
But Roxanne, the facts speak for themselves.
Ms. McKee, the problem here is the presentation by a city council member of a bogus analysis put forth in support of an ill-conceived proposal. The analysis purports to state the effect on citizens’ taxes of adoption of the proposal and is offered to in support of the proposal. But the information presented by the council member is not factually correct but instead severely understates that effect. How does the presentation of a flawed analysis and wildly misleading arguments foster open exchange of ideas and productive weighing of the pros and cons of proposals? Citizens expect unbiased facts and factual analysis from city officials. They certainly would be startled by your idea that it is not city officials that are responsible for providing accurate facts and competent analysis to citizens about city operations but the reverse.
When council members urge actions having very serious consequences for all citizens such as those urged by Ms. Hutson, citizens expect that these proposals would be grounded in facts and an understanding of the consequences for all citizens. And citizens expect that proposals by council members be grounded in careful, competent, impartial analysis—not based on the self-interest, ideology, misconceptions, or idiosyncratic situations or desires of a few. Moreover, such proposals should be made only because they implement the will of the community as a whole—that is, on the basis of the consensus of the community.
Politics as usual in Rollingwood is attempts by the city administration to take actions which would not garner public support if true facts were known. Politics as usual in Rollingwood is the failure of those in government to respect the citizens. This requires fewer lectures from city council members to citizens like those in your blog. And you might refrain from rolling your eyes when citizens appear before the council to try to provide you with their input.
Roxanne,
Please comment directly on the numbers that Do the Math presented here. If you don’t like it please post numbers that refute what Do the Math has presented. As far as being divisive is concerned, you certainly weren’t being very neighborly toward your neighbor when he was nominated for council.