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2004 10 26 WS Minutes - 530pmMINUTES OF THE WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN October 26, 2004 The City Council of the City of Baytown, Texas, met in work session on October 26, 2004, at 5:30 p.m. in the Council Chamber, Baytown City Hall, 2401 Market Street, Baytown, Texas, with the following in attendance: Ronnie Anderson Sammy Mahan Don Murray Mercedes Renteria III Calvin Mundinger Gary M. Jackson Bob Leiper Karen Horner Gary W. Smith Absent was: Scott Sheley, Council Member. Council Member Council Member Council Member Council Member Mayor City Manager Deputy City Manager First Assistant City Attorney City Clerk The meeting was opened with a quorum present after which the following business was conducted: Discuss the Senior Citizen tax cap. Gary Jackson, City Manager, reviewed the information on the topic included in the Council packet. Much of the information had been provided during a February 2004 work session. Rhonda Young, Treasurer, reviewed frequently asked questions concerning the Senior Citizen tax cap. She provided examples of how the tax cap can be transferred between residential properties within the City. The percentage of taxes that a person over the age of 65 or a disabled person pays will be transferred to a new residential homestead to be applied to the calculation of ad valorem taxes. During the period of tax years 2001 through 2003, the taxable value of residential homesteads of persons over age 65 or disabled increased by 13% and 16 %. The percentage increase is skewed by the application of the $50,000 exemption. (An increase on a smaller value is a higher percentage.) The impact of the tax cap is equivalent to the debt service on $1.9 million in bonds. The impact of the mandatory tax cap on Goose Creek Consolidated Independent School District's tax revenues has grown from $841,000 to $1,475,000. Of the over 65 or disabled homeowners in the City, 38% pay no taxes; 46% pay less than $50 in taxes; and 56% pay less than $100 in taxes. Twenty-one percent of the residential taxpayers in the City are over 65 years of age or are disabled. This is a rapidly growing population segment. It has increased 7% in the last 10 years. Page 2 of 3 Minutes of the Work Session — October 26, 2004 A recent opinion from the Texas Attorney General held that a tax cap approved in 2004 would impact taxes due and payable for tax year 2005 (at the end of 2005). Council Member Anderson asked if Lee College was considering the tax cap and wondered about their reasoning. Mayor Mundinger stated that the tax cap would be an action item on the next agenda (November 11, 2004). Council Member Murray stated that the schools are mandated to cap taxes and that Hams County will not consider approving the tax cap due to the generous exemption offered. Information on the results of the election in Baytown on Proposition 13 was requested. Council Member Anderson asked whether municipalities were adopting the tax cap by council action or by referendum. Mr. Jackson stated that it was mixed and in only one city had the election failed. Discuss the request for formation of an in -city Municipal Utility District (MUD) in the Needlepoint Road/Sjolander Road area. Mr. Jackson reported that previously the City had annexed approximately 70 acres on Needlepoint Road. The developer has petitioned for annexation of additional property and proposed the creation of an in -city MUD. Bob Leiper, Deputy City Manager, reviewed the plat of the proposed in -city MUD. Steve Robinson, representing Moody - Simmons the developer, explained that a MUD is a governmental body of limited jurisdiction. It has authority to construct water, sewer and storm sewer infrastructure and parks facilities in Harris County. To finance the infrastructure construction, a construction contract is entered which provides for the sale of future debt to reimburse the developer. The repayment of the debt is based on property tax levy. The infrastructure is constructed, inspected, and conveyed to the City as in all other subdivisions in the City. The City will operate the system. The MUD will assess and collect MUD taxes. The City will not be obligated on the MUD debt. The City gets all of its taxes on the entire developed value of the property within the MUD. There is no increment set aside for repayment of debt, as in a tax increment reinvestment zone. The City receives its water and sewer impact fees and water and sewer revenues. The larger residential developments in the Houston area have used special districts. It is necessary to use the special districts to be competitive in the market place. The MUD will provide a financing tool to provide parks and recreational facilities for the development. The MUD taxes are factored into the purchase price of a house. The cost of the infrastructure must be recovered either by inclusion in the cost of the lot or by ad valorem taxes, which lowers the purchase value of the lot and house. The MUD and taxes are disclosed to the purchaser. The MUD taxes are deductible on federal income tax returns. Page 3 of 3 Minutes of the Work Session — October 26, 2004 The creation of a MUD allows in -fill development to compete with the development in the extra territorial jurisdiction. In response to a question about negatives on an in -city MUD, Mr. Robinson stated that when an in -city MUD is used to supplant city services, conflicts can arise. The additional tax can be a problem, but the tax rate must be competitive. Before the Texas Commission on Environmental Quality will approve the creation of a MUD, a market study must be completed. In response to inquiry about the sufficiency of the roads and interchanges in the area, a representative of Moody - Simmons stated that they would probably contribute to the expansion of the road and the improvement of the access to I -10. Consider appointments. Construction Board of Adjustments and Appeals. No action was taken on this item. Community Development Advisory Board. Council Member Renteria stated that he would move the reappointment of Rebecca Greathouse, Eric Halverson, and Joe Frank Robins. Adjourn. Council Member Murray moved adjournment. Council Member Anderson seconded the motion. The vote follows: Ayes: Council Members Anderson, Mahan, Murray, and Renteria Mayor Mundinger Nays: None. The motion carried. There being no further business, the meeting adjourned at 6:23 p.m. gal reu ary W. Smith City Clerk MINUTES OF THE WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN October 26, 2004 The City Council of the City of Baytown, Texas, met in work session on October 26, 2004, at 12:10 p.m. in the Eddie V. Gray Wetlands Education and Recreation Center, 1724 Market Street, Baytown, Texas, with the following in attendance: Sammy Mahan Don Murray Mercedes Renteria III Calvin Mundinger Gary M. Jackson Gary W. Smith Council Member Council Member Council Member Mayor City Manager City Clerk Absent was: Ronnie Anderson, Council Member and Scott Sheley, Council Member. The meeting was opened with a quorum present after which the following business was conducted: Discuss the Outdoor event. Mayor Mundinger made welcoming remarks to those in attendance. Mr. Mike Beard, Baytown Outdoor, Inc., addressed the gathering and explained that the event is intended to recognize and celebrate the outdoor amenities in Baytown, to promote Baytown, and to enhance economic development. The non -profit corporation was formed to conduct the event. The board has formed subcommittees to deal with the various aspects of the event. Broad community support has been found. To assist in marketing and branding, a marketing firm will be selected. Funding assistance will be provided by the City of Baytown. The event will showcase the premier facilities and offer unique outdoor experiences. The board is soliciting educational events and commercial exhibitors. Discussions are underway for another event in 2006. Most of the activities will be free, a few will charge to cover overhead expenses. The venues will be Bayland Island and Marina, the Wetlands Center, and the Nature Center. The marketing firm will be charged to prepare a plan that will provide actions based on varying levels of available revenue. Page 2 of 2 Minutes of the Work Session — October 26, 2004 The event is scheduled for May 14 and 15, 2005. The board is looking at events over several years. Proceeds will provide scholarships and benefits to the Wetlands Center and the Nature Center. The board has joined the Texas Festivals and Events Association. The membership benefits the board by providing expertise and exposure in statewide and national publications and through the association's website. The board is seeking the involvement of the Hispanic community, the special needs community, and senior citizens. Tours of the Wetlands Center were provided. Adjourn. There being no further business, the meeting adjourned at 12:45 p.m. Gdry V. Smith City Clerk