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1981 04 14 CC Minutes, Special10414 -1 MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BAYTOWN April 14, 1981 The City Council of the City of Baytown, Texas, met in special session on Tuesday, April 14, 1981, at 6:00 p.m. in the Council Chamber of the Baytown City Hall with the following attendance: Fred T. Philips Jimmy Johnson Perry M. Simmons Mary E. Wilbanks Roy L. Fuller Allen Cannon Emmett 0. Hutto Fritz Lanham Dan Savage Randy Strong Eileen P. Hall Councilman Councilman Councilman Councilwoman Councilman Councilman Mayor City Manager Assistant City Manager City Attorney City Clerk The meeting was called to order with a quorum present and the following business was transacted: Consider Proposed Resolution No. 767, Adopting Industrial District Policy Just prior to the special meeting Council had a work session to discuss various alternatives with regard to es- tablishment of an Industrial District Policy. Randy Strong, City Attorney, explained that adoption of Proposed Resolution No. 767 would repeal Resolution No. 514, which was adopted on July 10, 1975. The only difference in the two resolutions is the formula. The present industrial district formula follows: TOTAL PAYMENT TO CITY = TAX PAYMENT + INDUSTRIAL DISTRICT PAYMENT Tax Payment = Tax Rate x Assessment Ratio x (20 %) of fair market value of entire industrial facility. Industrial District Payment = Tax Rate x (80 %) of fair market value of total industrial facility x (6`jo) . and the proposed formula: TOTAL PAYMENT TO CITY = TAX PAYMENT + INDUSTRIAL DISTRICT PAYMENT Tax Payment = Tax Rate x fair market value of industrial facility in annexed area. Industrial District Payment = (Tax Rate x fair market value of total industrial facility as determined by the City of Baytown x ) minus tax payment. 10414 -2 Minutes of the Special Meeting - April 14, 1981 The reason for the change in the formula is because of the unknown effect of the implementation of the Harris County Central Appraisal District. Since at this time, the city has no way of determining when that district will come into effect or exactly how the district will manage appraisals. The city's past practice of taxing twenty (20 %) percent annexation and receiving eighty (80 %) percent as industrial district payment may be completely skewed out of line if the district appraises the twenty (20 %) at some value completely off of what has been used in the past. Therefore, in effect what the formula does is calculate that the industries will pay to the City of Baytown a percentage of what they would pay if totally annexed. That total payment will then be broken into industrial district pay- ment and tax payment. In effect what the city will be doing is taking the value received from the district for the twenty (20 %) percent, apply the city's tax rate to that and that will be the tax income from the industry. Whatever else is needed to make up the total payment will be the industrial district payment. Therefore, the important change in the resolution is the percentage. Councilman Simmons moved for Proposed Resolution No. 767, adopting Industrial District Policy, including thirty -five (35 %) percent in the blank for industrial district payment. Councilman Fuller seconded the motion. Councilman Cannon stated at the last work session meeting, the committee discussed utilizing thirty -seven (377o) percent or thirty -eight (38 %) percent. Councilman Cannon stated that he was in favor of the thirty -eight (38 %) percent figure and that he had not been given any information to cause him to change his mind. As he had pointed out to Council in the work session, if city services were normalized, taxes to the home- owner would be considerably higher than surrounding areas which would be grossly unfair if Council approves thirty -five (35 %) percent. Councilman Cannon moved to replace that motion with a substitute motion to include thirty -eight (38 %) percent as the figure for the resolution. He explained that this is the city's only window for a seven -year period. If the thirty -eight (38 %) percent should come in high or if some of the projections are good, the tax rate can always be lowered and everyone will benefit. Another thing that this could be indicating is that the industrial district percentage has been unfair for the last seven years and Council is being grossly unfair to the citizens of Baytown if thirty -five (35 %) percent is approved. The motion died for lack of second. The vote on the original motion follows: Ayes: Council members Philips, Johnson, Simmons and Fuller Mayor Hutto Nays: Council members Wilbanks and Cannon RESOLUTION NO. 767 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, REPEALING RESOLUTION NO. 514 DULY ADOPTED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN ON JULY 10, 1975, AND DECLARING SAID RESOLUTION TO HAVE NO FORCE AND EFFECT, FINDINGS, DECLARING AND ESTABLISHING THAT MANUFACTURING INDUSTRIES NEAR THE CORPORATE LIMITS OF THE CITY OF BAYTOWN RARELY USE BAYTOWN'S MUNICIPAL SERVICES TO THE SAME EXTENT AS DO PRIVATE CITIZENS AND, CONSEQUENTLY, SUCH MANUFACTURING INDUSTRIES AS A WHOLE SHOULD COMPENSATE THE CITY OF BAYTOWN PROPORTIONATELY AS TO THEIR USE AND ENJOYMENT OF SUCH MUNI- CIPAL SERVICES. 10414 -3 Minutes of the Special Meeting - April 14, 1981 Consider Proposed Ordinance, Creating Industrial District Review Board The Administration has given Council a copy of a draft of an ordinance that would establish an Industrial District Review Board. This Board will be necessary at the time Harris County Central Appraisal District assumes the ap- praisal function. The Administration can put this on a later agenda. Appointments to the Baytown Housing Authority Board Mayor Hutto reappointed 0. J. Howell and Vernon Shields to the Baytown Housing Authority Board. Adjourn There being no further business to be transacted, the meeting was adjourned. Eileen P. Hall, City Clerk