Business owners complain to Council about higher taxes, confusing policies

City Council's Town Hall Meeting

By Shelly Wilkison
Liberty Hill City Council members heard from business owners this week who complained about higher taxes and confusing city policies they believe are hurting existing businesses.
In an attempt to improve communication with city residents and local businesses, the Council held the first in a series of Town Hall meetings Monday that attracted about 50 people. Council members provided information on the topics of water and wastewater utilities, the city’s sign ordinance and the rationale behind a 20 percent increase in the tax rate, which was adopted by a unanimous vote of the Council in September.
“This is the most treacherous, most upsetting time in my life. You’re (the City Council) supposed to work with us,” said Christy Coulston-Adkins, owner of Red Brick Java.
She said the Council claimed to be supporting business growth, but “you haven’t shown me anything.” The audience applauded as she returned to her seat.
“I’m not here to make excuses or to say we’ve done wrong,” said Councilman Jack Harkrider, who began the meeting by sharing information about city finances. “I’m here to give you information to help you understand.”
After public hearings where no one spoke on the tax increase, the City Council unanimously adopted a tax rate of $0.44 per $100 property valuation — an increase over last year’s rate of $0.35. City officials said the rate increase was needed to help pay for improvements to infrastructure.
“Seventy-five percent of the property taxes this year will go to debt service,” said Harkrider. He referred to pie charts that showed a break down of revenues and expenditures from the previous year and the budget for the current fiscal year.
“As you know, we are in for explosive growth. We can’t do nothing and let it (growth) consume us. We are working to manage it. We’re doing things now to keep your taxes low now and in the future,” he said.
Harkrider said the Council agreed it was important to “take on the debt” because “whoever controls the utilities, controls the city. Businesses coming in here want city services – water, wastewater, police. If we can’t provide them, they will go elsewhere. We are moving from being a small town to a city,” he explained.
“It bothers me to hear that we’re being thought of as anti-business when that’s not the image we are trying to project,” Harkrider said.
According to statistics provided at the meeting, the City of Liberty Hill has the third lowest tax rate of cities in Williamson County with the lowest being Weir. Georgetown has the second lowest rate. The highest tax rates were in Granger, Taylor and Florence.
“There is so much that needs to be done. Part of the startup costs we have to go in debt to do these things,” he said.
“I paid $13,000 in taxes and a big chunk of that was to the City,” said Frank Spinosa. “For me, the increase was over $1,000 this year of extra money when things are tough. We need to improve the tax base in town by bringing in new business. The only thing we’ve seen come in here in the last three years is the Sonic. We need to do better than that.”
In response to a question submitted in writing from the audience as to why business owners who do not live in the city limits appear to have so much influence in city decisions, Harkrider explained that revenues generated by the sales tax and business property taxes are substantial.
“Providing services to residents is more expensive than the tax revenue we generate from them,” he said. “The backbone is city sales tax and business property taxes.”
Some business owners became increasingly frustrated as the focus moved to the topics of the City’s sign ordinance and the water and sewer systems. While some city residents were present, questions and comments from business owners dominated the discussion.
Last week, the Council agreed to a format for the evening. The procedure for addressing audience questions and hearing comments was announced at the beginning of the meeting. However, as tempers of business owners flared, it became increasingly difficult to adhere to the plan. Several times, the Mayor interrupted speakers in an effort to maintain order.
“Isn’t this a forum where we can ask questions?” asked Rick Kennedy of STR Constructors.
“We set up the meeting rules,” said Mayor Murphy. “This section is public comment and we (Council) are not required to answer any questions.”
“Until we hear what you say, how do we know what quesitions to ask?” he responded. “I don’t know what my questions are going to be, and what you’re saying may generate more questions.”
The Mayor responded that she was trying to “keep order and follow protocol.”
When Councilmember Byron Tippie interjected that he wanted to hear Kennedy’s questions and comments, the Mayor asked him to come to the podium.
He asked about what appeared to be a discrepancy on a pie chart showing revenue vs expenses on wastewater operations in fiscal 2010. Harkrider had explained earlier in the evening that the Council projected there would be more sewer hookups last fiscal year, but those didn’t materialize. Mandatory hookups were not required or enforced, Harkrider said.
Mayor Pro Tem Mike Crane explained that the City’s pending acquisition of a wastewater treatment plant from the Lower Colorado River Authority will bring in revenue for the city.
“This will be a costly project, as well as replacing some infrastructure,” he said. “By acquiring the LCRA plant, we will not have to lease that space any longer. The MUDs (municipal utility districts) will contract to pay us for their space. This is huge for the city, and can bring some more housing and subdivisions on line.”
“We anticipate positive cash flow within two years,” the Mayor said. “We increased the tax rate up to the rollback rate to pay for infrastructure (to provide) safe water and replace failing sewer systems. These are best practices.”
Questions about whose responsibility it is to pay for repairs to out-of-warranty repairs to grinder pumps revealed that wastewater customers have a different understanding than city officials.
“There was a miscommunication when we were collecting those construction (installation) fees,” said Mayor Murphy. “It’s different than what you were told and that’s right.”
“It was supposed to be paid for by the fees,” said Clyde Davis.
“We can’t fix every mistake that’s been made, but the law of the state says we can’t spend money that accrues to the individual,” the Mayor said. “Grinder pump belongs to the individual, and it’s your responsibility to replace it when it goes out.”
In recent months there has been some confusion among business owners about the city’s sign ordinance. Councilmember Tippie said despite the confusion, “all our sign ordinances are on track. I think there are some problems with the fees.
“Planning & Zoning (Commission) is working on that now and will come up with better ideas,” he said. “Everyone I put there I trust will be best for the job. They have skin in the game and have a reason to make it better. I trust our P&Z. It was the one time that we (Council) worked as a team on that.”
Tippie said there are a lot of permit fees that are “outrageous.”
Although he voted for the tax increase, Tippie said Monday that “I don’t agree with it. I blew it and I ask you to forgive me on that one.”
He said the City is in the process of cataloging all of the signs. Compliance with the sign ordinance are being handled on an individual basis by the City Manager.
Maria Winkley, co-owner of Winkley’s General Store, asked the Council to be more friendly to existing businesses. She said Winkley’s leases space on their sign to other businesses — something she believes should be permitted.
“We have no problem with fees or requirements. Businesses advertising in our signs are from here. They aren’t breaking any laws. They are good businesses,” she said.
The sign ordinance, which is part of the City’s Unified Development Code, prohibits off-premise signs, Mayor Murphy said.
“We aren’t charging for existing signs, just cataloging signs. If they are new, they pay. If illegal, they are being notified,” she said.
Crane said the Council will consider postponing enforcement of the sign ordinance until a new one can be adopted.
Mayor Murphy reminded the audience that Planning & Zoning and all other city committees are advisory in nature and have no authority to make decisions on city policy.
“A lot of us own businesses in the area that are helpful,” said Brian Butler, who was recently appointed to the Economic Development Corp. Board of Directors. “I ask you to consider these ‘strong advisory’ commites.”
“We haven’t made money in the last two years,” said Kennedy. When times are tough, “we have to manage our business properly. Looks like no one is doing that in this (the City’s) case.”
“We had to raise the tax rate to cover our debt service,” said Mayor Murphy. “This is to pay for these improvements in our town. I’m not making promises here, but if we get the growth, within two years we will see the positive cash flow (from the acquisition of the wastewater and water systems).”
The Mayor and Council members agreed they appreciated the input from businesses and residents Monday. Councilman Charles Canady was not present.
“Even when you’re angry, you’re giving us something to think about,” said Mayor Murphy.