The URL can be used to link to this page

Home My WebLink AboutLEG 2026-08-25 Minutes CITY OF NORTH RICHLAND HILLS INTERGOVERNMENTAL & LEGISLATIVE AFFAIRS SUBCOMMITTEE AND LEGISLATIVE TASK FORCE MEETING MINUTES AUGUST 25, 4:00 PM PUBLIC LIBRARY, 9015 GRAND AVENUE NORTH RICHLAND HILLS, TX 76180 The Intergovernmental&Legislative Affairs(IGLA) Council Subcommittee and Legislative Task Force met on Tuesday, August 25, 2026, at 4:00 p.m. in the Board Room at the North Richland Hills (NRH) Public Library. The following members were present: Mayor Jack McCarty, Council Member Danny Roberts, Council Member Billy Parks, Linda Burt, Kyle Morris, Kyle Pekurney, Tito Rodriguez, Charlie Ruiz, Greg Stamps, Randy Tolleson, Mark Vaughn, Greg Vick The following member (s) were absent: None 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, Stephen Barnes, Director of Finance A. CALL TO ORDER The meeting was called to order by Mayor Jack McCarty at 4:00 p.m. B. APPROVE MINUTES FROM JULY 21, 2026, MEETING. A motion was made by Committee Member Kyle Pekurney, seconded by Committee Member Tito Rodriuez to approve the minutes of the July 21, 2026, Council Subcommittee and Legislative Task Force Meeting. The motion passed unanimously. Cl. REVIEW AND DISCUSS PROPOSED BUDGET HIGHLIGHTS AND FORECAST. Budget Highlights City Manager Paulette Hartman presented an overview of the FY27 budget highlights. Ms. Hartman outlined the primary structural fiscal challenges facing the municipality, beginning with flattening revenues. Ms. Hartman noted that new construction taxable value dropped by approximately 50%. Ms. Hartman highlighted recent state legislative enactments that reduce municipal property tax revenues, including exemptions. Additionally, Ms. Hartman discussed changes in the appraisal methodology implemented by the Tarrant Appraisal District (TAD), including adjustments to reappraisal frequencies and a record number of approved property protests, which resulted in a decline in overall property values for the first time in many years. Ms. Hartman also noted proposed state legislation aimed at reducing property tax burdens on homeowners, including legislative proposals to lower the senior tax freeze eligibility age to over 55, which would further impact municipal revenue streams. Ms. Hartman detailed the second primary structural fiscal challenge, which involves increasing costs across various operations, including infrastructure maintenance, inflationary pressures, external cost factors, employment market, and overall service demands. To address these challenges, Ms. Hartman explained the operational paradigms adopted by the city, which focus on driving efficiency across all departments, implementing cost recovery measures, generating new revenue, prioritizing core services, establishing "stop-doing" lists through program reviews, and utilizing multi-year budgeting and long- range planning. Ms. Hartman presented a comparison between appraised home values and the corresponding NRH tax bills, outlining relief measures implemented over the last several years by the City Council and overlapping taxing entities as home values increased. Ms. Hartman reviewed the proposed tax rate and noted that the City Council held the first public hearing on August 24 and is scheduled to adopt the Fiscal Year 2027 proposed budget on September 14. Ms. Hartman added that state mandated public notices must explicitly state "This is a tax increase" and include the calculated tax rate impact. Ms. Hartman discussed the future budget forecast stating that the City Council called the bond election. Ms. Hartman reported that bond rating agencies inquired about reserve levels during recent meetings due to potential state legislative actions impacting Maintenance and Operations (M&O) rates. Ms. Hartman confirmed that the FY27 budget does not draw from General Fund reserves and staff is developing a fiscal roadmap to identify future efficiencies and review existing fees. Ms. Hartman emphasized that while property taxes fund public safety operations, they do not cover those expenses entirely, and concluded with an overview of the return on investment residents receive from their property tax dollars. Long Range Financial Forecast Assistant City Manager Trudy Lewis presented an overview of the city's property tax rate history, a forecast of General Fund non-property tax revenues and explained the Unused Increment Rate calculation under Truth in Taxation Form 50-856. Ms. Lewis demonstrated the property tax rate formula, including the Base Rate of $0.545920 per $100 valuation with the expiring 2023 unused tax increment rate of$0.009224, resulting in the proposed rate of$0.555144. Ms. Lewis reviewed the multi-year financial forecast stating that staff recommended capturing the increment to put the municipality in a better financial position moving forward. Ms. Lewis presented the certified appraisal roll and outlined the primary drivers of value compression. Ms. Lewis detailed new property tax exemptions resulting from House Bill 21 (HB21). Ms. Lewis noted three major commercial properties that filed applications prior to when the bill went into effect and subsequently became fully exempt under HB21, removing their entire appraised value from the property tax roll. This resulted in a $93.4 million loss in taxable value for the city. Ms. Lewis discussed Texas Proposition 9 which established a $125,000 tax exemption for tangible property used for income production (also known as business personal property). Ms. Lewis explained that this exemption resulted in a $68.7 million loss in taxable value for the city for 2026, which shifts the tax burden by increasing the average residential tax bill by $15.30 to make up the difference. Ms. Lewis provided an update on the TAD protest season, reporting that countywide protests grew to 307,908, and resulted in an average loss of value of 17% for protested property. Property Tax Rate Ms. Lewis presented a graphic outlining the breakdown of Fiscal Year 2027 revenue sources across all municipal funds. Ms. Lewis explained the inverse relationship between property values and the No-New-Revenue (NNR) tax rate, clarifying that the NNR rate does not produce a flat tax bill because it does not account for the variables required to adjust values from year to year. Ms. Lewis explained that total property taxes paid by average homeowners decreased since 2020 as a result of tax relief measures enacted across taxing entities. Ms. Lewis displayed the property tax rate options presented to City Council. Ms. Lewis explained the proposed tax rate of $0.555144 per $100 valuation captures the expiring unused tax increment and represents an estimated annual tax bill increase of approximately $143.09 for an average single-family home in NRH. Ms. Lewis mentioned homeowners can use the Tarrant County tax rate website to review individual property impacts. Ms. Lewis concluded by presenting the functional areas supported by the tax rate, noting that 51% of the rate supports Public Safety and 24% supports Streets, for combined total of 75% of the operational budget. Senior Homestead Exemptions Ms. Lewis provided an overview of senior homestead exemptions and current tax ceilings, reporting that approximately 6,937 properties, representing 32% of NRH residential property owners, receive the senior homestead exemption. The total taxable value frozen under these tax ceilings equals $1,670,125,067, which translates to a revenue loss of $3,364,893 from residential tax ceilings in Fiscal Year 2026. Ms. Lewis presented an overview of "Operation Double Nickel," a proposal by Lieutenant Governor Dan Patrick to lower the senior exemption eligibility age to 55 which would result in an estimated annual revenue reduction of $754,840 for the city and place more of the tax burden on younger families. C2. REVIEW AND DISCUSS RECENT INTERIM COMMITTEE MEETINGS. Director of Planning Cori Reaume provided an overview of recent interim committee meetings and distributed a schedule of upcoming legislative hearings. Ms. Reaume highlighted that many recent interim discussions have centered specifically on data centers and reviewed upcoming committee hearing dates that are of interest to the city. Dl. DISCUSS QUESTIONS RELATED TO PREVIOUSLY PROVIDED INFORMATION. City Manager Paulette Hartman informed the committee members that they may email city staff with any questions. D2. DISCUSS IDEAS FOR COMMUNITY ENGAGEMENT. Ms. Hartman mentioned the planned discussion regarding ideas for community engagement would be postponed to the September meeting. D3. CONFIRM UPCOMING MEETING SCHEDULE. Ms. Hartman reminded the committee that the next meeting will take place on September 16 in the Library Board Room. D4. CONFIRM KEY DATES. Ms. Hartman informed the committee regarding upcoming key dates for Tarrant County Legislative Days, noting that the event is scheduled for March 10 and March 11, 2027. E. FUTURE AGENDA ITEMS. No future agenda items were requested. F. PUBLIC COMMENTS No requests to speak were received from the public. G. ADJOURNMENT The meeting adjourned at 5:29 p.m. APPROVED: Jack M arty, Mayor Jennipher Castellanos, Secretary