Loading...
HomeMy WebLinkAboutLEG 2026-07-21 Minutes CITY OF NORTH RICHLAND HILLS INTERGOVERNMENTAL & LEGISLATIVE AFFAIRS SUBCOMMITTEE AND LEGISLATIVE TASK FORCE MEETING MINUTES JULY 21, 3:30 PM COUNCIL WORKROOM NORTH RICHLAND HILLS CITY HALL The Intergovernmental& Legislative Affairs(IGLA)Council Subcommittee and Legislative Task Force met on Tuesday, July 21, 2026, at 9:00 am in the Council Workroom at the North Richland Hills City Hall complex. The following members were present: Mayor Jack McCarty, Council Member Danny Roberts, Council Member Billy Parks, Kyle Morris, Kyle Pekurney, Tito Rodriguez, Charlie Ruiz, Mark Vaughn, Greg Vick The following member(s)were absent: Linda Burt, Greg Stamps, Randy Tolleson Staff present at the meeting were: Paulette Hartman, City Manager, Caroline Waggoner, Assistant City Manager, Trudy Lewis, Assistant City Manager, Cori Reaume, Planning Director, Mary Peters, Communications Director, Jennipher Castellanos, Manager of Strategic Initiatives A. CALL TO ORDER The meeting was called to order by Mayor Jack McCarty at 3:30 p.m. B. APPROVE MINUTES FROM JUNE 25, 2026, MEETING. A motion was made by Committee Member Tito Rodriguez, seconded by Committee Member Danny Roberts to approve the minutes of the June 25, 2026, Council Subcommittee and Legislative Task Force Meeting. The motion passed unanimously. Cl. BUDGET OVERIVEW. Assistant City Manager Trudy Lewis provided the committee with a budget overview detailing the impact of state legislation on municipal finances. Ms. Lewis opened with an overview of municipal services, comparing the city's operational scope with private industry, and outlined the ratio of city employees per population. She explained that the city's annual budget, which runs from October 1 through September 30, serves to plan activities, prioritize community needs, authorize expenditures, establish accountability, and satisfy state law requirements. Ms. Lewis noted that annual budget development is guided by principles incorporating citizen input, City Council direction, and operational environment shifts such as regulatory changes, inflation, and labor market dynamics. Ms. Lewis explained the structure of city funds, beginning with the capital budget, which encompasses 16 funds supporting nine project categories across a 10-year planning scope. She presented a summary of the adopted FY 2026 Capital Budget and outlined the fund types utilized for capital expenditures. Ms. Lewis then reviewed the operating budget, detailing the FY 2026 Operating Funds by percentage, followed by a discussion on the Debt Service Fund's funding sources and associated expenditures. She noted that all city funds are invested collectively and interest is allocated back to its respective fund. Ms. Lewis continued with an overview of the Utility Fund, including its revenue sources and expense breakdown, before detailing the General Fund. She explained that General Fund revenues carry fewer restrictions, and demonstrated that equal revenues and expenditures constitute a balanced budget. Ms. Lewis identified the specific departments funded through the General Fund, noting that some are split funded across multiple funds. She detailed General Fund major revenues, using municipal citation revenue as an example; she explained that for a $219 fine, the State of Texas receives approximately 47 percent. She noted that between FY21 and FY25 the city remitted roughly$4.3 million to the state from the city's Municipal Court. Addressing sales tax distributions, Ms. Lewis explained that of the local sales tax allocation, 1 cent goes to the General Fund, 0.5 cents to the Parks Fund, and 0.5 cents to the Crime Control District Fund. She reported that last year the General Fund received $14.8 million, while the Parks Fund and Crime Control District received $7.4 million each, whereas the State of Texas collected $92 million from the state's 6.25 cent rate, illustrating that the city is not the primary benefactor of sales tax collections. Ms. Lewis presented an overview of property tax revenues, noting the total adopted property tax rate for FY 2026 is $0.497841 per$100 valuation. She outlined the roles and responsibilities of key entities, stating that the State Legislature establishes governing laws, defines entity roles, and guarantees property owner rights. She defined statutory terms including the No-New-Revenue (NNR) rate explaining that it assumes same property in year one and same revenue raised, the Voter-Approval Rate (VAR) which limits tax rate increases to 3.5 percent over the NNR without an election, the Maintenance and Operations (M&O) rate pays for annual operating expenses in the General Fund, and the Interest and Sinking (I&S)fund rate funds debt payments associated with the tax rate. Ms. Lewis detailed the role of the Tarrant Appraisal District (TAD) in assessing countywide property values, applying exemptions, certifying rolls, maintaining ownership records, and managing property value protests. She distinguished between Market Value, Appraised Value, and Taxable Value, noting that residential properties comprise approximately 66 percent of property value in the city, commercial properties comprise 33 percent, and industrial properties make up 1 percent. Ms. Lewis stated that property owners are responsible for confirming property values, filing exemptions, and remitting payment to the Tax Assessor-Collector. She outlined the Tax Assessor-Collector's duty to issue tax bills, assess penalties, and calculate refunds, clarifying that the city receives no interest earnings on funds held during processing. Following a question from a committee member regarding the legal requirement to utilize the Tarrant County Assessor, Ms. Lewis identified the taxing jurisdictions, including school districts, cities, counties, hospital districts, and community colleges. Ms. Lewis demonstrated the property tax bill formula, multiplying taxable value by the tax rate to derive total taxes due, and presented the tax distribution showing a blended rate across Birdville ISD and Keller ISD alongside allocations to the school districts, county, and the city. She provided the average residential tax bill cost and reviewed historical property tax rates, noting that North Richland Hills adopted the VAR in FY 2023, the NNR rate in FY 2024, and rates below the NNR in FY 2025 and FY 2026. City Manager Paulette Hartman clarified that the city calculates its tax rates strictly using the state-provided four- page Truth-in-Taxation form rather than proprietary calculations. Ms. Lewis presented data showing cities operating at or below the NNR rate over the past three fiscal years, highlighting that only two other cities maintained an NNR rate or lower over that timeframe, with North Richland Hills having the largest population among them. She compared the General Fund budgets of these three cities, citing Keller at approximately $47 million, Grapevine at nearly $87 million, and North Richland Hills at $67 million, which equates to per capita figures of$990 for Keller, $1,667 for Grapevine, and $891 for North Richland Hills. Concluding her financial presentation, Ms. Lewis noted that the average single-family home taxable value in North Richland Hills is mid-range at approximately $285,000. She presented a comparative summary of residential tax bills across neighboring cities to illustrate how identical fiscal policies produce varied local impacts, noting that municipalities such as Richland Hills and Bedford do not offer local homestead exemptions. C2. REVIEW AND DISCUSS THE IMPACT OF TAX RELIEF PLANS PROPOSED BY THE GOVERNOR AND LIEUTENANT GOVERNOR. Ms. Lewis presented an analysis of Governor Abbott's proposed tax relief plan, which seeks to limit local government spending increases to the lesser of population growth plus inflation or 3.5 percent. Using a Consumer Price Index calculation and historical 12-month charts, she demonstrated the erosion of purchasing power. She discussed recent state unfunded mandates that impose financial burdens on the city, including requirements to separate adult and youth library materials, prohibitions on certain service fees, enhanced workers' compensation coverage for fire personnel, mandatory state-compliant cybersecurity and artificial intelligence training, required body-worn cameras and associated data storage costs for law enforcement, and new audit regulations for impact fees. Ms. Lewis reviewed the Governor's proposal to adjust property appraisals to a five-year cycle, referencing the Fort Worth-Arlington-Grapevine home price index and commercial value changes. She explained that reducing the residential homestead appraisal cap from 10 percent to 3 percent creates an inverse relationship where tax rates must increase if taxable values fall to maintain prior revenue levels. Furthermore, expanding appraisal caps to commercial properties would reduce business tax liabilities while shifting a higher proportional tax burden onto homeowners. Ms. Lewis reviewed Lieutenant Governor Patrick's interim charges regarding senior tax relief initiatives, specifically Operation Double Nickel. She demonstrated that expanding senior exemption eligibility under this plan at the adopted tax rate would result in a $676,924 reduction in property tax revenue for the city. To offset this revenue loss, the city tax rate would need to increase, resulting in an estimated $30.49 tax increase for local non-frozen homestead properties. C3. REVIEW IMPACT OF PREVIOUSLY PASSED LEGISLATION AND UNFUNDED MANDATES. Ms. Lewis discussed proposals aimed at limiting local government fees and prioritizing utility revenues for infrastructure maintenance, noting these actions would restrict General Fund revenue used to cover operational support provided to the city's utility system. City Manager Paulette Hartman reported that the city received its preliminary property tax roll, which indicated total property appraised values decreased to $8.8 billion from $9.2 billion the previous year. Ms. Hartman provided an overview of the fiscal impact of this value reduction alongside mandatory budget increases the city must absorb. She observed that local taxpayers have experienced property tax bill reductions over the past five years. She advised the committee regarding the compounding financial effects of adopting tax rates below the NNR, the cost of debt service, and potential impacts on municipal service delivery levels. Ms. Hartman noted that certified values remain down year-over-year and announced that staff would present a formal discussion on property tax values at the upcoming City Council meeting on Monday July 27, 2026. C4. REVIEW AND DISCUSS CITY RELATED INTERIM COMMITTEE CHARGES. Planning Director Cori Reaume reported on legislative interim committee charges assigned across 33 House committees, 17 Senate committees, and various select committees. She distributed a schedule of upcoming legislative committee hearings and highlighted topics relevant to municipal operations. Ms. Reaume summarized specific interim charges assigned to House committees, including Elections, Land and Resource Management, Natural Resources, State Affairs, Ways and Means, and Governmental Oversight. She then reviewed Senate committee charges, focusing on Business and Commerce, Economic Development, Finance, Local Government, and Water, Rural, and Agriculture. Following a committee member's request to clarify the structure of a Certificate of Obligation (CO), City Manager Paulette Hartman explained that General Obligation Bonds require voter approval through a public election, whereas Certificates of Obligation require public notice but do not require an election. In response to a follow-up inquiry regarding practical applications for when a CO is issued, Ms. Hartman stated that the city is currently issuing approximately $3 million in Certificates of Obligation to fund the replacement of a fire engine and ambulance. Ms. Reaume directed members to the hearing schedule and affirmed that staff will provide monthly updates on legislative developments. Dl. OPPORTUNITY FOR QUESTIONS ON PREVIOUS MEETING TOPICS OR MATERIALS PROVIDED. No questions were raised by committee members related to previous meeting topics or materials provided. D2. REVIEW AND DISCUSS UPCOMING MEETING SCHEDULE AND FUTURE AGENDA ITEMS. City Manager Paulette Hartman reviewed the upcoming meeting schedule and requested that members notify staff of any planned absences or date conflicts. Councilmember Danny Roberts requested that future agendas include an item to assign specific legislative committee hearings to task force members for monitoring and reporting. F. PUBLIC COMMENTS Mayor Jack McCarty opened the public comment section, noting that procedures require speakers to submit a Public Meeting Appearance Card prior to the start of the meeting. No requests to speak were received from the public. G. ADJOURNMENT The meeting adjourned at 5:11 p.m. APPROVED: Jack McCarty, Mayor -a Jennipher Castellanos, Secretary