Page 81 – The Austin Bulldog

Celebration of Democracy Honors Achievements

February 6, 2014 5:48 PM

But notes the challenges ahead with a City Council composed of district representatives

An extended standing ovation, completes with whoops and hollers, erupted Wednesday night when the League of Women Voters Austin Area’s Francis McIntyre announced to a crowd of some 125 people at the Green Pastures restaurant, “I present to you the first Independent Citizens Redistricting Commission in the history of Austin.”

Each of the 14 members of the Independent Citizens Redistricting Commission (ICRC) was honored with an award as McIntyre called them one-by-one to step in front of the crowd. (See list of members below.)

The League’s State of the City 2014 dinner celebrated voter approval of Austin’s new form of city governance that will be launched following the first-ever election this coming November of council members from geographic districts that were drawn by the ICRC.

The Proposition 3 ballot measure to establish 10 council districts drew 146,496 votes in the November 6, 2012, election, besting by more than 24,000 votes the alternative plan put on the ballot by council members opposed to the 10-1 plan.

Featured speaker Steve Bickerstaff—the founder of the Bickerstaff Heath law firm and the attorney who drafted the initial plan that wound up as Proposition 3 on the ballot through the grass-roots petitioning of Austinites for Geographic Representation—called the victory “an extraordinary example of the ability of people to take control of government and an exercise in democracy.”

Bickerstaff praised Linda Curtis, the sparkplug campaign coordinator for Austinites for Geographic Representation; City Auditor Ken Mory, who was instrumental in implementing the application process for volunteers who wanted to serve on the ICRC; the CPAs who (during tax season) winnowed the 450 applications to form a pool of those best qualified to serve on the ICRC; and the ICRC members themselves for accomplishing the difficult task of holding together and drawing the boundaries of the 10 districts from which future council members will be elected.

“A lot of people thought it (the process) would crash and burn but the reality is, you did it,” Bickerstaff said. “The ICRC is extraordinary because the commissioners were willing to spend their own time and skills to make the process work.” He also noted that the ICRC’s mission was completed for less than $150,000.

While praising the ICRC’s accomplishments Bickerstaff also criticized the group for “failing to achieve transparency” in its final few weeks by not allowing oral comments and overusing closed executive sessions.

Bickerstaff noted the irony of his involvement in bringing about single-member districts, given his previous legal role in the 1980s to successfully defend in federal court the City of Austin’s at-large system of electing council members. He said he would have never endorsed the concept of single-member districts for Austin had the ballot measure not required that council districts be drawn by the ICRC—not the City Council.

“We have the distinct advantage of going to single-member districts through the elective process,” Bickerstaff said. “Most all cities move to single-member districts through the force of litigation or threatened litigation,” which creates resentment over being forced to change.

Challenges ahead in new system

But the future holds challenges for the new form of government under a 10-1 system in which only the mayor is elected by all citizens.

“A council member in a district can focus on the needs of the district,” he said, but a group of constituents may be able to elect a person of its choice and become so strong that the incumbent may not be responsive to the people of the district.

“A district could become a virtual fiefdom,” he warned.

An incumbent could also become more “accountable to the people who control the voter turnout” and that could “create extremism and lead to cronyism.” The result could be “gridlock and acrimony” Bickerstaff said.

“We can expect a tsunami of democracy and grass-roots efforts,” he said.

Bickerstaff said Austin’s system has the advantage of establishing term limits but the public should be wary of the possibility of an incumbent anointing a successor.

Another advantage that Austin has in going to single-member districts is that this city does not have the polarization that existed in other cities that went from at-large to district councils. “We have a reserve of good will and it’s important to keep that good will going forward.”

“This process will change what we expect from the mayor. It’s more important that the mayor has the ability to lead the council” and “create a consensus for decisions going forward.”

Groups that are looking to support mayoral candidates should keep these qualifications in mind, he said.

“There is no reason to underestimate the importance of what you have achieved,” Bickerstaff said. The chore of redrawing council districts again in 2021, after the next census, will be less difficult.

“The Austin model can and should be used all over the country,” he said, and Bickerstaff urged the League of Women Voters audience to make an effort to sell the idea of drawing council districts with an ICRC to other cities.

“We have the opportunity in Austin to move forward in a united way,” he said.

ICRC members honored

The ICRC members were: Magdalena Blanco, Catherine Cocco, TJ Costello, Mariano Diaz-Miranda, Rachel Farris, Stefan Haag, Harriet Harrow, William Hewitt, Henry W. Johnson, Carmen Llanes Pulido, Arthur Lopez, Ryan Rafols, Anna Saenz, and Maria Solis.

To see the final certified map of the 10 districts drawn by the ICRC, click here (warning: this document is extremely slow to load).

Related Bulldog coverage:This is The Austin Bulldog’s 51st article covering issues and activities pertaining to proposed and/or voter-approved changes to the Austin City Charter.

Austin Impact of Supreme Court Decision: Ruling on Section 5 of Voting Rights Act ends need for federal approval of council districts, June 26, 2013

What Can Austin Learn from California? Panel discussion focuses on how Golden State experiences inform city’s move to 10-1 council, May 6, 2013

Redistricting Veteran Shares His Wisdom: Member of California Redistricting Commission describes what to watch out for in Austin redistricting, May 2, 2013

Why Bother: Austin After 10-1: KLRU-TV taping draws more than 200 people for multifaceted discussion of what future holds, April 29 2013

Light Turnout for City Auditor’s Meetings: Five scheduled meetings drew fewer than ninety people, but keen interest shown among attendees, January 29, 2013

City Auditor Kicks Off Info Sessions: Drawing maps for 100 council districts attracts citizens who want to get involved, January 22, 2013

Bumpy Road to Implementing 10-1: Council refuses to pay for child care, mileage. Applications to serve taken Jan. 19 to Feb. 22, January 17, 2013

Massive Interest in Redistricting: City audtor’s forum draws standing-room crowd to brainstorm how to attract applicants, December 4, 2012

Proposed Districting Timeline Draws Flak: Redistricting expert says schedule does not allow enough time for federal approval process, December 4, 2012

Citizens Redistricting Forum December 4: City auditor invites public input for citizens redistricting panel and how best to identify applicant qualifications, November 27, 2012

Prop 3 Proponents to Monitor Implementation: Austinites for Geographic Representation form committee to help guide work on 10-1 system, November 25, 2012

City Hustles to Initiate Prop 3 Tasks: Auditor coordinating with proponents of the 10-1 plan to begin what will be a lengthy transition process, November 15, 2012

10- Plan to Rule Council Elections: Both propositions for geographic representation pass but grassroots group dominates election results, November 7, 2012

Mayor: My Commission Beats Your Commission: Mayor Lee Leffingwell lifts idea for citizens to draw council districts and undercut opposing proposition, November 2, 2012

Prop 3 Fundraising Outpaces Prop 4: Financial support for 10-1 far outstrip dollars donated for 8-2-1 hybrid, September 29, 2012

Proposition 3 Campaign Relies on Grass Roots: Austinites for Geographic Representation going door-to-door, running phone banks, and distributing info at polling places, October 21, 2012

Prop 3 Proponents Question Prop 4 Legality: Civil rights attorney and two minority groups say federal preclearance for 8-2-1 is unlikely, October 21, 2012

Poll Triggers Backlash from 10-1 Proponents: Proposition 3 advocates saying Prop 4 playing dirty with a misleading poll, Prop 4 denies the charge, October 17, 2012

Proposition 4 Campaign Reports Finances: Late report indicates $2685 raised in last three months but fails to provide details about campaign expenses, October 10, 2012

Proposition 3 Campaign Reports Finances: 10-1 campaign proponents raised more than $40,000, Proposition 4’s 8-2-1 advocates’ report not submitted, October 9, 2012

Proposition 3 Rally Draws 150-200 People: Crowd hears fiery speeches by proponents of the 10-1 system for electing council members, October 8, 2012

Attorney Bickerstaff Addresses Critics’ Concerns: His September 24 article drew numerous comments about the Proposition 3 Independent Citizens Redistricting Commission, October 5, 2012

Feisty Debate Over Electing Council Members: One panelist argues for no change to the at-large system of City Council elections, October 4, 2012

Proposition 3 and 4 Proponents Rev Their Campaigns: Raising money, organizing troops, and pushing plans for geographic representation on Austin City Council, September 28, 2012

Redistricting Need Not Be a Quintessentially Political Process: Independent redistricting commissions for U.S. states and cities, September 24, 2012

Barrientos Lampoons Prop 4 With a Fable: Other proponents of alternative plans for geographic representation push their points, September 14, 2012

Proposition 3 Advocates Falsely Accuse RECA: Group alleges ‘rumor’ of $100,000 pledge by Real Estate Council to defeat Proposition 3, but RECA says not so, September 12, 2012

No-Change Option Surfaces in Ballot Debate: Former Council Member Bob Binder opposes both options on the ballot for geographic representation, September 11, 2012

The Election Wars Have Begun: Interest in how council members elected running high, as face-off debates abound, September 9, 2012

Your Guide to Proposed City Charter Amendments: What’s on the ballot, what it will cost taxpayers, and details provided in the ordinances for each proposition, August 30, 2012

Loud Rally Follows Final Council Vote for 8-2-1: AGR’s Cries Foul Over Work Session Vote for Hybrid; Mayor Leffingwell Said Votes Driven by Ballot Deadline, August 7, 2012

Council Backers of 8-2-1 Plan Accused of Self-Interest: But Facts Don’t Seem to Substantiate Such a Claim, as Related Actions May Bar Most Incumbents From Reelection, August 6, 2012

8-2-1 Near Certain to Go on Ballot: City Council Votes on Second Reading to Put Competition Election Plan on Ballot, July 31, 2012

10-1 Plan Qualifies for November Ballot: Consultant Estimates That 22,435 Signatures Are Valid; Austinites for Geographic Representation Readies for Battle, July 26, 2012

Petition Completed for 10-1 Council Districts: Austinites for Geographic Representation Claims 33,000 Signatures, of Which About 22,800 Are Considered Valid, July 16, 2012

Council Puts 10-1 Election Plan on November Ballot: Votes 5-2 on Three Readings to Adopt Petition Language, Votes 4-2 on First Reading to Also Put 8-2-1 on Ballot, June 29, 2012

Citizens Group to Make Final Petition Push: Austinites for Geographic Representation Claims to Have 17,000 Signatures, and Shoots for 13,000 More, June 4, 2012

City Council Tackles Charter Amendments: Redistricting Expert, Charter Revision Committee Members, and Grass-roots Group Critical of Task Force Plan, April 26, 2012

Council District Backers Want Quick Ballot Decision: Big Press Conference, Big Pressure Promised, to Get Council Decision Before Council Elections, March 8, 2012

Hard Fought, Heartfelt Charter Decision: Charter Revision Committee Votes 8-7 to Back 10-1 Plan for Council Elections, February 3, 2012

New Restrictions Proposed for Lobbyist Fundraising: Lobbyists Can Only Give Candidates $25 But Can Collect Unlimited Contributions For Them, January 22, 2012

Committee Debates How to Elect Council: Charter Revision Committee Divided Over Pure Districts vs. Hybrid System, January 9, 2012

Thirteen Charter Changes and Counting: Charter Revision Committee’s Next Job: Tackle Plan for Geographic Representation, December 14, 2011

Council Confirms November 2012 Election Date for Charter Amendments: Resolution Ensures Citizens Initiative Won’t Force May 2012 Charter Election, November 3, 2011

Coalition Launching Petition Drive to Get on the Ballot for May 2012 Election, October 18, 2011

Broad Community Interest Focusing on How Mayor and Council Members Elected, October 4, 2011

Coalition Nearing Petition Launch for Grass-roots Council District Plan, August 24, 2011

Maps Prove Select Few Govern Austin: Forty Years of Election History Expose Extent of Disparity, August 4, 2011

City Council to Consider Proposal to Create Geographic Representation: Election Dates, Term Lengths, Redistricting and Other Charter Changes in Council Resolution, April 27, 2011

Petition Launch Imminent to Force Election for Geographic Representation in City Elections, March 7, 2011

Homestead Exemptions Rife With Abuse

Editor Ken Martin

December 20, 2013 5:48 PM

Honor system applications and inadequate scrutiny for hundreds of homeowners not billed for full taxes

Part 1 of a series
Data Research by Brandon Roberts

Pablo Ornelas Jr. is being hit this month with a sudden increase in property taxes totaling more than $18,000 that he must pay by January 31 or face stiff penalties and steep interest charges.

Still, it’s hard to complain when he enjoyed an improper tax break for 15 years on one of the homes he owns.

For Ornelas, it’s actually good news that the law restricts the collection of back taxes to just five of those 15 years (2008-2012).

While that adds up to a lot of money, he will not have to repay the additional $21,000 in taxes he was under-billed for in tax years 1998 through 2007, according to calculations provided by Renea Deckard, associate deputy for collections in the Travis County Tax Office.

The bottom line is that a single oversight by the Appraisal District has so far cost taxing entities some $39,000 in revenue that was due on a single house. As stated above, Ornelas is being billed for only $18,000 (46 percent) of that amount.

If not for this investigation—which triggered the Appraisal District’s action to initiate collection of back taxes from Ornelas, and upped the taxes for 2013 as well—this hemorrhage would have continued for the foreseeable future.

Not an isolated case

Ornelas is just one of more than 200 homeowners identified in this investigation who appear to have been under-billed for their full share of property taxes because they were granted more than the single residence homestead exemption authorized by state Property Tax Code Section 11.13(h) for their primary residence.

On Monday December 16, The Austin Bulldog provided a database to the Appraisal District with details about 165 Travis County homeowners who appear to have more than one residence homestead exemption—one of which may need to be cancelled. (Another database of 50 homeowners with a residence exemption in Travis County and a second residence exemption in another county will be provided to the Appraisal District later.)

The database provided not only indicates homeowners’ names and addresses for properties with exemptions but also identifies which owners are married, the addresses where owners are registered to vote, and, when the residence is connected to City of Austin utilities, who pays for water and wastewater service. The database also identifies in scores of cases the non-owners who are registered to vote and/or pay for utility service at these addresses.

Further, the database indicates the exemptions on each property, when they were applied for, the year in which the exemptions took effect, how many years the exemptions have been maintained, and the owners’ 2013 property tax savings enjoyed because of the exemptions.

The total estimated 2013 taxes under-billed on these homes for which exemptions are questionable is more than $125,000. Many of these homeowners have been under-billed for years—and in some cases for decades. Collection of back taxes will recover only a fraction of the total losses. And were it not for this investigation these losses would likely have continued indefinitely.

The Austin Bulldog asked Appraisal District officials to review the data and provide comments about the validity of these findings for this article.

“Because of the short turnaround we have not had an opportunity to review all of the data in your spreadsheet,” Chief Appraiser Marya Crigler wrote in an e-mail late Wednesday, adding, “We are committed to proper application of homestead exemptions and will continue to review the data provided and take appropriate action as needed.”

How could this happen?

By obtaining a homestead exemption for a primary residence, a homeowner pays property taxes on a taxable value that is substantially less than the appraised market value. This results in a smaller annual property tax bill.

Obtaining an additional over age 65 or older exemption is especially helpful because it freezes the amount of school taxes. School taxes generally account for more than half of a Travis County homeowner’s property tax bill. While property values generally rise over the years and tax rates tend to increase as well, the school-tax freeze staves off a good share of what otherwise would be ever increasing taxes for aged homeowners, many of whom are retirees living on fixed incomes.

In 1997, Pablo Ornelas Jr. applied to the Travis Central Appraisal District for an age 65 or older homestead exemption for a home at 2410 Glen Springs Way in Austin that he had owned since 1967, records indicate.

In 1998, Ornelas applied for a residence homestead exemption for a home at 1209 Lost Creek Blvd. in Austin that he and wife Ofilia Ornelas bought in January of that year, records indicate.

Because the state Property Tax Code permits a homeowner (defined as a single adult or a married couple) to receive an exemption on only one residence homestead in the same year, Ornelas’ Lost Creek application was flagged by Appraisal District personnel to indicate the exemption for the Glen Springs Way home was to be deleted when granting the new exemption.

This was not done.

Ornelas never notified the Appraisal District of the oversight.

Section 11.43(g) of the state Property Tax Code states, “a person who received an exemption that is not required to be claimed annually shall notify the appraisal office in writing before May 1 after this entitlement to the exemption ends.”

“I did not write them a letter that I had vacated the (Glen Springs Way) house,” Ornelas told The Austin Bulldog in a December 11 phone interview. “I was thinking the exemption was good for life or until I sold my property. That was my assumption.”

As a result, for 15 years Ornelas was allowed to maintain homestead and age 65 or older exemptions on both of his homes.

The Appraisal District did not notice this oversight until it responded to The Austin Bulldog’s multiple public information requests for copies of more than 550 applications for homestead exemptions filed by homeowners.

Denise Pierce, customer service director for the Appraisal District, and Chief Appraiser Crigler readily conceded in a December 16 interview that these public information requests triggered collection efforts for Ornelas and “quite a few” others.

After filling these public information requests, Pierce said, “We went over the property owners where (the exemptions) shouldn’t have been there.”

The Appraisal District sent Ornelas a certified letter November 13, 2013, notifying him the exemptions for the Glen Springs Way home had been cancelled. The letter advised he had the right to appeal within 30 days by filing written notice with Appraisal Review Board.

“After I got that letter I called them immediately,” Ornelas told The Austin Bulldog. “I apologized for not notifying them. … They are going back and recomputing the tax I owed and I will pay.”

On December 4, the Appraisal District notified the Tax Collector’s office to initiate collection of Ornelas’ back taxes and issue a revised tax bill for 2013, Associate Deputy Collector Deckard told The Austin Bulldog.

The Additional Tax Bill for 2410 Glen Springs Way boosted Ornelas’ taxes from the previously issued Travis County Tax Bills for the Ornelas Homes of $1,008.89 to $3,689.51 for 2013 and tacked on back taxes for 2008 through 2012 as well. The new tax statement for that home totals $18,081.27.

Ornelas one of many

Although the Appraisal District has begun to review many questionable exemptions as a result of The Austin Bulldog’s public information requests, it missed more than 170 cases identified in the database provided to the district Monday.

As a result, the homeowners listed in that database have not yet been notified by the Appraisal District that they may lose their exemptions and be billed for back taxes.

It’s not immediately clear how much each of these homeowners will be billed for increased 2013 taxes and back taxes for 2008 through 2012 if their exemptions are removed.

One of the cases pending notification by the Appraisal District involves homeowners Richard Fred Gautier and Jeanette Burkett Gautier.

Jeanette Joseph Burkett applied for an age 65 or older exemption for 8108 Hillrise Drive in Austin in 1995, records indicate.

Public records indicate that Richard Gautier married Burkett in February 1999.

Today, according to voter registration records, Jeanette Burkett Gautier and Richard Gautier live in the Hillrise home. This home is currently valued at $400,000 by the Appraisal District. The homestead and age 65 or older exemptions on this home saved the couple more than $5,200 in 2013 property taxes

In June 1999 Richard Gautier—a licensed Certified Public Accountant since 1964—applied for exemptions for 2500 Deerfoot Trail, based on being the surviving spouse of a person with an age 65 or older exemption.

Now, nearly 15 years later, both of these properties maintain homestead and age 65 or older exemptions.

The occupants of the Deerfoot Trail home are Brent R. Drake, Edward Turner Noland, and Joseph J. Ayala, according to voter registration records, and Drake is billed for Austin water and wastewater service.

None of these men have an ownership interest in this home, which, like the Hillrise home, is also valued at $400,000.

The Austin Bulldog notified Richard Gautier of these findings in a December 13 telephone interview. (Like Ornelas, he would not agree to be interviewed in person.) After hearing the facts, he said, “I agree. You’re correct.”

Later that same day Gautier left a voice message for The Austin Bulldog in which he said, “I want to thank you for informing me about my erroneous homestead exemption. I have called the Travis County Appraisal Office and (asked) what I need to do. I hope they will send me the information. Again, I want to thank you very much.”

The homestead and age 65 and older exemptions would have saved the Gautiers more than $5,300 in 2013 property taxes on the Deerfoot Trail home—if not for discovery in this investigation.

The Appraisal District has not yet notified the Tax Office that the exemption has been cancelled on the Deerfoot home, Deputy Collector Deckard said, so she cannot provide an estimate of increased taxes for 2013 and back taxes for 2008 through 2012.

But with the same methodology used by the tax office to compute Ornelas’ increased taxes, The Austin Bulldog calculates the Gautiers will see their 2013 tax bill for the Deerfoot Trail home jump by more than $4,500.

In addition, collection of back taxes for this home for five years will total nearly $23,000.

The Gautiers will be required to pay the total increase of about $27,500 in taxes due by January 31.

Travis County Tax Collector Bruce Elfant said that homeowners may work out payment plans for property taxes.

“We have to offer up to 12 months to pay,” he said in a November 27 interview (but) for anything delinquent beyond 21 days penalties and interest kick in.”

There are benefits to being in a payment plan, Elfant said.

“Once in a payment plan you’re locked in. We can never come and foreclose on the property. That gives the taxpayer protection. We encourage paying off as soon as possible so it does not add exorbitant amounts for penalties and interest.”

Problem is widespread

The Ornelas and Gautier cases are but two examples of the phenomenon exposed by this investigation.

Most of the owners named in these findings may have been under-billed for smaller amounts than these two examples, but the longer improper exemptions exist, the larger the cumulative under-billing.

The properties for which exemptions are questioned in this investigation have been in effect an average of 14 years.

Fifteen of these questionable exemptions have been in effect for 20 to 29 years.

Cancelling inappropriate exemptions would assist the Appraisal District in accomplishing its mission (as stated on its website) which is in part to “ensure that each taxpayer pays only their fair share of the property tax burden.”

By the same token, no taxpayer should pay less than their fair share. When a homeowner enjoys an undeserved exemption, it comes at the expense of those homeowners who pay taxes required by law.

About this project

The results of this investigation are based on careful analysis of data collected from a wide variety of public sources. (For details see How The Austin Bulldog Investigated Residence Homestead Exemptions.)

This data is anything but static. In the course of daily events properties are being bought and sold.

Residence homestead exemptions are being added and cancelled.

Property owners are getting married, or getting divorced and dividing their property.

Property owners die and exemptions must be cancelled and reapplied for, if appropriate, by surviving spouses or heirs.

All of these actions, and more, will affect the accuracy of these findings. By the time you read this article some of the records involved may have changed.

In publishing the results of this investigation and a database of questionable homestead tax exemptions, The Austin Bulldog is not alleging that anyone committed a crime.

Nevertheless this investigation points to problems that need to be addressed by the appropriate officials

How exemptions are obtained

A “residence homestead” is defined by the state Property Tax Code Section 11.13(j)(1), as a structure, together with the land (not to exceed 20 acres) and improvements used in the residential occupancy of the structure that is owned by one or more individuals, is designed or adapted for human residence, is used as a residence, and is occupied as the principal residence by an owner.

Residential property owners seeking exemptions in Travis County submit to the Appraisal District an Application for Residence Homestead Exemption, Property Tax Form 50-114. There is no charge to apply for a residence homestead exemption.

The form contains a warning in the space immediately above where the application is signed, which states:

“By signing this application, you state that the facts in this application are true and correct, that you do not claim a residence homestead exemption on another residence homestead in Texas, and that you do not claim a residence homestead exemption on a residence homestead outside of Texas.”

Property Tax Form 50-114 also states, “You have a duty to notify the chief appraiser when your entitlement to any exemption ends.”

The same form is used to apply for a variety of property tax exemptions, including: general residence homestead exemption, disabled person exemption, age 65 or older exemption, 100 percent disabled veterans exemption, and surviving spouse exemption.

Per state Property Tax Code Section 11.43(f), the application must be accompanied by information necessary to determine the validity of the exemption claim, to include the applicant’s name and driver’s license number, state-issued personal identification certificate number, or social security account number.

The need for an applicant to have identification that matches the residential address for which the exemption is sought did not exist until the law to require it was enacted in 2011.

How much are exemptions worth?

The value of homestead residence exemptions are expressed in either specific dollar amounts or as a percentage of the taxable property value determined by the Appraisal District. The total value of exemptions on a residence reduces its value and thus its property taxes.

Some exemptions are mandated by state law while others, called local-option exemptions, are allowed if granted by school districts, cities, counties, and other governmental entities entitled to levy taxes.

Exemptions for which all homeowners are eligible in their primary residence

State—$15,000 of the appraised value of an adult’s residence homestead is exempt from taxation by a school district per Property Tax Code, Section 11.13(b).
Austin Community College—One percent of the appraised value of an adult’s residence homestead is exempt from taxation with a minimum of $5,000.
Austin Independent School District—None.
Central Health (formerly known as the Travis County Healthcare District)—20 percent of the appraised value, with a minimum of $5,000.
City of Austin—None
Travis County—20 percent of the appraised value, with a minimum of $5,000

Additional exemptions for the primary residence of disabled or age 65 and older homeowners

State—$10,000 of the appraised value of the home owned by a person who is disabled, or is 65 or older, is exempt from taxation by a school district per Property Tax Code Section 11.13(c).
Austin Community College—$115,000.
Austin Independent School District—$25,000
Central Health—$70,000
City of Austin—$51,000
Travis County—$70,000

Back taxes not the only hazard

In addition to being charged for back taxes if an exemption is cancelled, Property Tax Code Section 22.29 provides that a 50 percent penalty may be imposed by a court if fraud or intent to evade a tax is proven.

Further, criminal charges could be pursued against homeowners who have filed an application for homestead exemption containing a false statement. Application forms for residence homestead exemptions require the owner to sign a statement acknowledging that fact:

NOTICE REGARDING PENALTIES FOR MAKING OR FILING AN APPLICATION CONTAINING A FALSE STATEMENT: If you make a false statement on this form, you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code.

Your signature on this application constitutes a sworn statement that you have read and understand the Notice Regarding Penalties for Making or Filing an Application Containing a False Statement.

Although the criminal penalty exists, the Texas Comptroller of Public Accounts—which prescribes the application forms and requires it to include a notice of possible criminal penalties—was not aware of any cases in which a homeowner has been charged and/or convicted under this statute, Press Secretary Kevin Lyons stated in a November 26 e-mail, in response to The Austin Bulldog’s query.

Further, in a Wednesday e-mail responding to The Austin Bulldog’s question, Crigler stated, “I have checked with legal counsel and the district has not reported anyone to the Travis County Attorney nor are we aware of anyone charged or convicted of filing a false statement on a homestead application.”

In effect the toothless enforcement of criminal penalties for making false statements in applications for residence homestead exemptions constitute an open invitation to abuse the system.

In actual practice anyone caught with an inappropriate exemption will at most be billed for up to five years of back taxes and goes scot-free for avoiding payment of their full share of property taxes in earlier years.

There’s neither a penalty nor a penny of extra interest for those who—once an improper exemption is discovered and cancelled—pay the back taxes on time.

What’s next—Part 2 in this series will focus in greater detail on the Appraisal District’s methods of reviewing applications for residence homestead exemptions and outline significant obstacles that stand in the way of weeding out improper homestead tax exemptions.

The records

The following links allow readers to access source documents that support the findings outlined in this part of the investigation.

Travis County Homeowners Who May Have An Improper Homestead Exemption, an Excel spreadsheet reflecting data for 336 residential properties.

Pablo Ornelas Jr. and Ofelia Ornelas

Appraisal District Records for the Ornelas Homes, indicating the ownership; exemptions granted; valuations; taxing jurisdictions; estimated taxes due with and without the current exemptions; and deed history.

Exemption Applications for the Ornelas Homes processed by the Appraisal District.

Travis County Tax Bills for the Ornelas Homes originally issued for these two homes, which reflected the exemptions and amounts owed for 2013.

Travis Central Appraisal District Letter to Pablo Ornelas Jr. to Ornelas cancelling exemptions for 2008-2013 for the Glen Springs Way home.

Additional Tax Bill for 2410 Glen Springs Way totaling $18,081.27 for back taxes for 2008-2012 and the additional tax for 2013.

Voter Registration Records for occupants of these two homes.

Marriage Record for Thomas Ross Henry and Patricia Ornelas.

Richard Gautier and Jeanette Burkett Gautier

Appraisal District Records for the Gautier Homes, indicating the ownership; exemptions granted; valuations; taxing jurisdictions; estimated taxes due with and without the current exemptions; and deed history.

Exemption Applications for the Gautier Homes processed by the Appraisal District.

Travis County Tax Bills for the Gautier Homes, which reflect the exemptions and amounts owed for 2013 before the taxes are increased due to the anticipated cancellation of exemptions on the 2500 Deerfoot Trail home.

Voter Registration Records for occupants of these two homes.

Marriage Record for Richard Fred Gautier and Jeanette Joseph Burkett.

Richard Fred Gautier CPA License Record

Austin Impact of Supreme Court Decision

Editor Ken Martin

June 25, 2013 5:50 PM

Ruling on Section 5 of Voting Rights Act ends need for federal approval of council districts

by Steve Bickerstaff

President Lyndon Johnson signs the Voting Rights Act of 1965

Today, the United States Supreme Court by a vote of 5-4 effectively struck down Section 5 of the Voting Rights Act of 1965. For Austin, that means that federal approval of the 10 council districts being drawn by the Independent Citizens Redistricting Commission will not be needed.

Technically, the Court left Section 5 in place, but unusable. The Court directly struck down the formula in Section 4(b) of the Act that determined which states and local jurisdictions nationwide were covered by the requirement of Section 5 that changes in election procedures and practices by those covered jurisdictions had to be submitted for preclearance. Section 5 was effectively left dangling inapplicable to any jurisdiction.

Contrary to some preconceptions, the Voting Rights Act of 1965 never actually named certain states or jurisdictions to which Section 5 applied. Instead, the Act established a coverage formula [Section 4(b) of the Act] based on the presence in the jurisdiction in 1964 of a test or device (e.g. literacy tests) limiting voting and a low total voter registration or turnout in the 1964 presidential election. Only certain jurisdictions nationwide were covered by this formula. Other jurisdictions (including Texas) were added in 1970 and 1975 by amendments supplementing the coverage formula, but also tying coverage to circumstances existing when the amendments were adopted.

Today’s opinion for the Supreme Court (written by Chief Justice John Roberts) found that the coverage formula was unconstitutionally outdated. In his opinion, Chief Justice Roberts explained, “Congress could have updated the coverage formula …, but did not do so. Its failure to act leaves us today with no choice but to declare Section 4(b) unconstitutional.”

It is unclear whether the Department of Justice may be more aggressive in the future in trying to utilize other parts of the Act not tied to this coverage formula.

Impact on Austin’s 2014 election

In terms of the City of Austin process for drawing 10 new election districts, which will be achieved through the work of the recently established Independent Citizens Redistricting Commission, there are three identifiable results of today’s ruling:

First, Section 2 of the Voting Rights Act remains in effect nationwide and bans racial discrimination in voting procedures and practices, including redistricting. Thus, the city’s Independent Citizens Redistricting Commission remains subject to a firm federal legal requirement that it must not discriminate against minority voters (Black or Hispanic) during redistricting.

Second, any final redistricting plan adopted by the Commission will take effect immediately on adoption without preclearance under the Voting Rights Act. As a result, the Commission can plan its schedule without allowing time for obtaining preclearance.

Third, although the ban on discrimination remains applicable, the burden of showing discrimination in a legal proceeding has changed. Under the preclearance requirement of Section 5, the covered jurisdiction had the burden of showing that the redistricting did not discriminate against minority voters. If the covered jurisdiction failed to carry this burden, the election change (e.g. redistricting) was rejected and could not take effect. Now, with the Supreme Court ruling, an election change takes effect when enacted and the burden is on the minority plaintiff (under Section 2) to demonstrate that the redistricting is illegally discriminatory.

For many observers (including myself) the outcome of the Supreme Court decision is regrettable. At the state level in Texas, the absence of the preclearance requirement clearly shifts power to the legislative majority and places a greater burden on minority plaintiffs in court. Challenges to the state legislative redistricting are likely to continue, but now under Section 2 of the Act.

In Austin, however, I expect the independent redistricting commission to draw our 10 districts without discriminating against minority voters. If my expectation is accurate, the lack of preclearance should not be a factor in the final shape of the city’s districts.

Attorney Steve Bickerstaff has represented more than 100 jurisdictions on redistricting matters, including during the redistricting process, or before the U.S. Department of Justice, or in state or federal courts. Bickerstaff drafted the initial plan for using an Independent Citizens Redistricting Commission (ICRC) to draw Austin’s council districts. He based the ICRC plan on a model used by the State of California. Austinites for Geographic Representation used Bickerstaff’s draft, as tweaked by attorney Fred Lewis, to meet local concerns, and made it part of the 10-1 plan that was adopted by voters in November 2012 election as an amendment to the Austin City Charter. You may contact Steve at [email protected].

Bulldog Open Records Lawsuit Continues

Editor Ken Martin

June 7, 2013 11:25 AM

Key issue is whether it is permissible to redact officials’ private e-mail addresses

How could you find out if Austin City Council members participated in an illegal quorum discussion about city business using their private e-mail accounts—a violation of the Texas Open Meetings Act?

The short answer is: you can’t.

Under the Texas Public Information Act (TPIA) you may request copies of e-mails exchanged by public officials about public business and you would be entitled to get them—including e-mails sent or received on private accounts (although in the past, the private-accounts issue has been a matter of legal contention).

But the e-mails you get from the public officials’ private e-mail accounts would not include their private e-mail addresses. Those addresses would be blacked out, redacted—to the point you would not be able to determine who sent or received a given e-mail, or whether a quorum of the governing board had illegally participated.

That was what The Austin Bulldog encountered in 2011, in response to a public information request for the e-mails about government business exchanged by the mayor and council members.

The Austin Bulldog eventually obtained copies of e-mails about government business exchanged by these elected officials using their private e-mail accounts—but only after filing a lawsuit to get them.

In response to the lawsuit the elected officials eventually released 288 pages of e-mails exchanged in 2010 and January 2011 on personal e-mail accounts. (Another 276 pages of personal e-mails about city business exchanged in 2009 were furnished in response to a later public information request filed by The Austin Bulldog.)

All copies of private e-mails about city business ultimately released to The Austin Bulldog had the mayor and council members’ private e-mail addresses redacted, based on Attorney General Opinion OR2011-05507, which was issued at the city’s request.

That opinion cited Section 552.137 of the Texas Public Information Act as authority to withhold these private e-mail addresses—even though these private e-mail addresses were used to facilitate a discussion in the shadows about government business that by law should be conducted in public.

“The AG has consistently ruled that governments can redact personal e-mail addresses used by government officials when corresponding about public business,” said attorney Bill Aleshire of Riggs, Aleshire & Ray PC, who represents The Austin Bulldog in this lawsuit.

“I believe the TPIA Section 552.137 exception for email addresses of ‘members of the public’ does not apply to public officials internally communicating with each other,” Aleshire said. “No Texas court has ruled on the issue.”

Whether the City of Austin will be permitted to continue redacting the private e-mail addresses of public officials in the future will be decided by a district court hearing on The Austin Bulldog’s Motion for Summary Judgment. A hearing on that motion will be scheduled for late August.

If the Motion for Summary Judgment is granted, Aleshire said, the court would issue an order for the city manager to release unredacted copies of the e-mails exchanged by the mayor and council members.

As it now stands, such redaction is permitted. Only a prosecutor with subpoena powers would be able to obtain unredacted copies to determine if a quorum of an agency’s governing board had participated in illegal quorum discussions of government business.

County Attorney David Escamilla obtained unredacted copies of e-mails exchanged by Austin City Council members on private accounts during his 21-month investigation of the council’s violations of the Texas Open Meetings Act.

These records were an important part of the evidence assembled to show there was probable cause that the Texas Open Meetings Act was violated. Some of the private e-mail records were cited in the deferred prosecution agreements signed by the mayor and council members (except Kathie Tovo, who was not on the council when the violations occurred).

Why was the lawsuit needed?

The lawsuit against the mayor, council members, and City of Austin, The Austin Bulldog v. Lee Leffingwell, mayor, et al (Cause No. D-1-GN-11-000639) was triggered by the city’s failure to promptly and fully respond to public information requests filed January 19, 2011, and January 27, 2011.

The Austin Bulldog sought to obtain copies of e-mails, letters, memoranda, notes, or other forms of written communication exchanged by the mayor and each council member from January 1, 2010, through January 27, 2011.

The lawsuit asserted there is evidence that one or more Austin elected officials deliberately used their private e-mail accounts to try to keep substantive communications about city business from being available through the city’s computer servers in response to public information requests

In one case, a council member asked a constituent to switch over to the council member’s personal e-mail address to continue discussing the controversial topic of tax subsidies for The Domain shopping center, which amounted to anywhere from $25 million to more than $60 million, depending on whose figures you believe.

The city’s initial response to those requests included hundreds of e-mails that were captured because they went through city servers.

However, the city took the position that e-mails created or received on personal computers or cell phones were not collected, assembled or maintained by the city. Further, the city claimed it did not have legal access to these records, which were therefore not public information.

But elected officials—from whom these records were requested by The Austin Bulldog—are by law the official custodians of records in their offices. Section 201.003(2) of the Local Government Records Act defines “custodian” as the appointed or elected public officer who … is in charge of the office that creates or receives local government records.”

The City Council members’ offices are defined by City Code Section 2-11-1(B)(1) as department directors and, as such, is responsible under City Code Section 2-11-6 for maintaining the department’s records.

The city did not explain why these elected officials who are custodians of their records would not have legal access to their own private e-mail accounts.

Further, opinions previously issued by the Attorney General indicate that e-mails created using a council member’s personal e-mail account in connection with the transaction of official business constitute “public information” and must be released to the requestor.

For example, Attorney General Opinion OR2010-10687 dated July 19, 2010 (see page 2) delivered that finding in connection with an open records request filed by The Austin Bulldog to obtain e-mails created or received by then Georgetown Council Member Pat Berryman.

Other Attorney General Opinions that hold personal e-mails about public business are public information include: Attorney General Open Records Letter OR2003-0951, Attorney General Open Records Letter OR2003-1890, Attorney General Open Records Letter OR2005-01126, and Attorney General Open Records Letter OR2005-06753.

Lawsuit triggered reforms

The city’s response to the lawsuit may have been hastened by the fact that it was filed just five weeks after County Attorney David Escamilla on January 25, 2011, launched an investigation into the City Council’s violations of the Texas Open Meetings Act—exposed by The Austin Bulldog’s investigative report published that day.

The lawsuit resulted in significant actions by city officials:

E-mails released—The mayor and council members released varying numbers of e-mails about city business created or received on private accounts, albeit with personal e-mail addresses redacted.

However, those who made statements when releasing those e-mails said the law was not settled on the question of whether those messages constituted public information and they were releasing the e-mails voluntarily.

Policies reformed—The City Council on April 7, 2011, passed a resolution to reform its own electronic communication practices and those of the five employees directly supervised by the council.

The resolution also ordered the city manager and city clerk, respectively, to reform electronic communication procedures for city employees and members of city boards and commissions.

To that end, on August 4, 2011, City Manager Marc Ott issued Administrative Bulletin 08-06, to establish a policy for city employees.

It wasn’t until August 23, 2012, that a policy was established for board and commission members. That’s when the City Council approved Ordinance 20120823-004, which added City Code Section 2-1-49 (Communications Using Electronic Devices) and amended Section 2-1-23 (Training).

Lawsuit amended

In The Austin Bulldog’s Third Amended petition, filed May 22, 2013, the mayor and council members have been deleted as defendants in the lawsuit and the city manager has been added as a defendant.

The reason is that under the Texas Public Information Act only the governmental body can be sued for withholding records. The relief provided by the Act is for a writ of mandamus to be issued by the court to order that records be released.

Such writs could be enforced through contempt of court proceedings. However, a court has ruled that a writ of mandamus cannot be issued against a governmental body. “It has to be an individual,” Aleshire said. “The logical person is the officer for public information.”

Section 552.201(a) of the Act states that, “The chief administrative officer of a governmental body is the officer for public information.”

Including the city manager in this lawsuit would make the manager the party to be issued a writ of mandamus—and the person to be held accountable for noncompliance.

Without this distinction, “There are profound implications that you could sue a governmental body and win and not get relief,” attorney Aleshire said.

The city hired attorney Jim Cousar of Thompson & Knight and others in that firm to assist in defending this lawsuit, so far authorizing expenditures of $95,000. Through February 20, 2013, the firm has billed the city for more than $81,000. (See spreadsheet, The Austin Bulldog v. Leffingwell et al Legal Fees to Represent City of Austin.)

Legislation clears the air

Any legal ambiguity about whether e-mails about government business exchanged on private e-mail accounts are, in fact, public information and may be obtained through a public information request was erased by the Texas Legislature last month.

Senate Bill 1368, signed in both the House and Senate May 27 and sent to Governor Rick Perry May 28, would add to the Texas Public Information Act’s definition of public information “any electronic communication created, transmitted, received, or maintained on any device if the communication is in connection with the transaction of official business.”

SB 1368 also adds to the list of media containing public information “e-mail, Internet posting, text message, instant message, (and) other electronic communication.”

The bill is currently on Perry’s desk for consideration, said Lucy Nashed in the governor’s press office. Because the Legislature was not in session at the time the bill was sent, Perry has 20 days—until June 16—to either sign the bill into law, let it become law without signing it, or veto it, she said.

Lawsuit records Cause No. D-1-GN-11-000639

The Austin Bulldog v. Lee Leffingwell, mayor, et al, Plaintiff’s Original petition, March 1, 2011

Plaintiff’s First Amended Petition, The Austin Bulldog v. Lee Leffingwell, et al, March 8, 2011

Defendant City of Austin’s Plea to the Jurisdiction and General Denial, April 11, 2011

Plaintiff’s First Supplemental Petition The Austin Bulldog v. Leffingwell et al, September 1, 2011

Plaintiff’s Second Amended Petitition, The Austin Bulldog v. Lee Leffingwell, et al, April 23, 2012

Plaintiff’s Request for Admissions to Defendant City of Austin, August 27, 2012

Defendant City of Austin’s Objections and Responses to Plaintiff’s Request for Admissions, September 26, 2012

Defendant City of Austin’s First Amended Plea to the Jurisdiction and General Denial, September 26, 2012

Plaintiff’s Third Amended Petition, May 22, 2013

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit to provide investigative reporting in the public interest. You can help to sustain The Austin Bulldog’s reporting by making a tax-deductible contribution.

Related Bulldog coverage: This is the 42nd story covering the City of Austin’s problems and progress in deadline with open government issues.

Litigation Challenges Open Government Laws: Attorneys criticize criminal penalties and public access to elected officials private e-mail accounts, April 24, 2013

Social Media’s Impact on Open Government: Few government organizations have dealt with how Facebook, Twitter use affects compliance, April 23, 2013

City Hosts Open Government Symposium: Lawyers attending for education credits abound, much of the day had little to do with city practices, April 22, 2013

City Spent $157,636 to Defend Council Violations: Payments for private lawyers for mayor, council members in criminal investigation, April 8, 2013

City Hosting Open Government Symposium: Follows county attorney’s investigation of City Council open meetings violations, March 19, 2013

Deferred Prosecution Ends Open Meetings Investigation: Mayor and five current council members sign agreements waiving the statute of limitations and requiring major reforms, October 24, 2012

Austin Board and Commissions Get E-mail Policy: Fifteen months after City Council ordered changes, board and commission members to be assigned city e-mail accounts, August 23, 2012

Open Meetings Investigation a Year Old Today: County attorney says investigation of whether City Council violated Open Meetings Act is still ongoing, January 25, 2012

City of Austin Moving, Slowly, Toward Greater Transparency in Electronic Communication: New system for board and commission members targeted for first quarter 2012, October 27, 2011

Employee E-Communication Policy Drafts Show Each Revision Weakened Rules: Policy that was near fully compliant on first draft crippled by changes, September 13, 2011

The Austin Bulldog Files Second Lawsuit Against City of Austin for Withholding Records: City not responsive to open records request concerning water treatment plant construction, September 1, 2011

City Manager Establishes Policy for Employees’ Electronic Communications: Open government legal experts say policy is seriously flawed, but it’s an important start, August 10, 2011

City of Austin Dragging Its Feet on Implementing Lawful E-mail Practices: City employees, board and commission members still not covered by city policies, July 13, 2011

E-mails Exchanged by Council Members Expose Private Deliberations and Political Maneuvering: More than 2,400 pages of e-mails published here in searchable format, July 6, 2011

Taxpayers Footing Big Bills to Correct City of Austin’s Open Government Issues: $200,000 spent on attorneys so far and no end in sight, June 24, 2011

Treasure Trove of Public Documents Made Available in Searchable Format: E-mails, text messages, meeting notes obtained through open records, lawsuit, May 12, 2011

County Attorney’s Office ‘Cannot Determine’ City of Office Committed Alleged Violations: Bulldog’s complaint was the first presented for violation of the Texas Public Information Act, April 22, 2011

Council Staff Training Lapsed from 2007 Until Lawsuit Filed: Only one current staff member had taken training, city records show, April 20, 2011

Austin City Council Adopts Policy to Improve Compliance with Texas Public Information Act: Policy does not cover all city employees or all city board and commission members, April 15, 2011

City of Austin and Council Members File Answer to The Austin Bulldog’s Lawsuit: Answer challenges standing and claims requests for open records fulfilled, mostly, April 11, 2011

Call for Public Help in Analyzing City Council Members Private E-mails, Text Messages: Volunteers needed to review correspondence and provide feedback on any irregularities, April 9, 2011

City of Austin’s Records Retention Undermined by Lack of Controls Over Deletion of E-mails: Missing records likely more important than gossipy tidbits, April 6, 2011

Council Member Laura Morrison Releases E-mail on City Business from Gmail Account: Morrison second council member to turn over more e-mails responsive to The Austin Bulldog’s requests, March 30, 2011

Private E-mails About City Business May Be Pulled Into City of Austin Records Retention: City Council votes to consider policy draft at council meeting of April 7, March 29, 2011

The Austin Bulldog Files Civil Complaint Against City of Austin and Council Members: Travis County Attorney David Escamilla has legal authority to force compliance, March 23, 2011

Expired: The Austin Bulldog’s Offer to Settle Its Lawsuit with City, Mayor and Council Members: Does this mean these elected officials want to continue to violate state laws?, March 18, 2011

Council Member Spelman’s City E-mails on UT Account Will Not Be Provided: University of Texas will seek opinion from Texas attorney general to withhold, March 18, 2011

The Austin Bulldog Files Lawsuit to Compel Compliance with the Law: Mayor and city council members not in compliance with statutes for public information, records retention, March 2, 2011

Smoking Gun E-mail Shows Council Aide Advocated Evasion of Open Meetings Act: Provided detailed guide to allow chats with council members on dais but leave no trace, March 1, 2011

Council Member Bill Spelman Goes On the Record About Private Meetings, Fifth in a series of recorded question and answer interviews, February 20, 2011

Council Work Sessions Stir Concern Over Tying Up Staff for Two Meetings: City manager presents summary of options for council consideration, February 15, 2011

Mayor Claims Lawyers Okayed Private Meetings But City Won’t Release Proof: City pledges cooperation with county attorney’s inquiry but is withholding these key documents, February 13, 2011

County Attorney Asks City of Austin for Records Related to Open Meetings Complaint: Former Mayor Wynn and Former Council Member McCracken included, February 9, 2011

Council Member Randi Shade Goes On the Record About Private Meetings: Fourth in a Series of recorded question-and-answer interviews, February 9, 2011

City of Austin Commits $159,000 for Advice in County Attorney’s Open Meetings Act Inquiry: Three attorneys hired for $53,000 each, February 7, 2011

Council Member Chris Riley Goes On the Record About Private Meetings: Third in a Series of recorded question-and-answer interviews, February 6, 2011

Council Member Sheryl Cole Goes On the Record About Private Meetings: Second in a Series of recorded question-and-answer interviews, February 3, 2011

Mayor Pro Tem Mike Martinez Goes On the Record About Private Meetings: First in a series of recorded question-and-answer interviews, February 2, 2011

Will I Said Come On Over Baby, Whole Lot of Meetin’ Goin’ On: Council Member Chris Riley tops the chart with 256 private meetings, January 30, 2011

County Attorney Reviewing Complaint, Brian Rodgers Will Not Run for Council, January 25, 2011

Open Meetings, Closed Minds: Private meetings to discuss public business shows Austin City Council may be violating Open Meetings Act, January 25, 2011

Austin Governed by the Well-to-Do

Editor Ken Martin

May 17, 2013 1:46 PM

November 2014 elections may deliver economic diversity in next city council

Mayor Lee Leffingwell has investments in stocks and mutual funds with an estimated value of anywhere from $159,000 to $643,000 (since shares are reported in ranges a more specific estimate is not possible).

He enjoys an annual income of $150,000 from all sources, roughly half of which comes from his mayoral salary of $77,688.

Mayor Pro Tem Sheryl Cole and husband Kevin Cole have a real estate portfolio valued on the tax rolls at $1.3 million and combined salaries of more than $100,000.

Council Member Mike Martinez and wife Lara Wendler have combined salaries of $186,000.

They own a couple of houses that are on the tax rolls for a total of more than $1.1 million; have 38 stocks that have a bare minimum value of $170,000 (and likely far more); and their other investments are conservatively estimated at more than $250,000.

Council Member Laura Morrison with her husband Philip Morrison reported owning 27 stocks, six bonds and shares in 31 mutual funds.

They live in a West Austin home valued at $1.9 million. The Morrisons drew dividends of more than $35,000 and rental income of more than $35,000, and their combined salaries are $173,803.

Council Member Chris Riley owns a downtown home with domestic partner Denise Brady. The home, valued at $807,077, also serves as a four-plex and produces rental income of more than $20,000.

Council Member Bill Spelman reported owning stock in 26 companies and shares in 29 mutual funds.

With wife Niyanta Spelman he owns a Hyde Park home and two other rental properties in Austin, as well as an interest in undeveloped West Texas rangeland.

Council Member Kathie Tovo and husband Tom Hurt own or have interest in more than a dozen businesses; possess an extensive investment portfolio; and own approximately 26,000 acres of ranch land spread over four Texas counties that produced income of more than $500,000 last year from oil, gas, and land sales.

As it stands now, all seven of the city’s elected officials are comfortably well off. Just how wealthy they are is an open question. The sworn financial statements provide clues but the lack of required specificity prevents accurately quantifying the value of reported assets.

The good news is that these affluent and concerned citizens enjoy a level of financial security that allows them to use their intelligence and skills in service to the community. If they are rich it’s not because they capitalized on their elected positions.

Will geographic diversity spawn economic diversity?

In reviewing the sworn financial statements filed by the mayor and City Council members, one can’t help but think how a new kind of diversity has a chance to manifest itself in the November 2014 City Council elections.

That election will not only mark the first-ever election of council members from geographic districts, but may actually result in someone of lesser financial means being elected. That’s mere speculation at this point, of course.

Since term limits bar all but Council Member Kathie Tovo and Council Member Chris Riley from running for reelection to a council seat, the wealth enjoyed by the other council members will come into play only if they choose to run for mayor. (Had he served for more than two years in filling Leffingwell’s unexpired second term—vacated when Leffingwell ran for mayor in 2009—Riley would be term-limited. According to Public Information Specialist Kyle Carvell, Riley served from June 22, 2009, to June 15, 2011, one year 11 months and 24 days—a week short of exceeding two years.)

The bottom line is that at least eight seats on the 10-member council will be up for grabs in the November 2014 election. Some of these seats could conceivably be won through a shoe-leather campaign that relies more on reputation, past service to the community, and a cadre of volunteers than on how much of one’s own cash can be mustered for hiring consultants, mailing fliers and buying media exposure.

Ongoing coverage of council finances

These financial statements are not published on the city’s website and were obtained through public information requests.

State-mandated reports are released only after the requestor completes a form that indicates who is gaining access. That’s a requirement imposed by state law. It seems the legislators want to be able to track who may be snooping into their personal business.

In fact, on June 5, 2012, the Austin American-Statesman reported that the Sunset Advisory Commission—made up of 10 legislators and two citizens—voted unanimously to defeat a proposal that would have required online postings of the annual financial disclosures for all public officeholders in Texas. The reason: “It might pose a security risk.”

“More than 40 other states post similar disclosure statements online, some with personal information redacted,” the story stated.

But in the big state of Texas, anyone who wants to inspect the financial disclosures of state officials can get them by e-mailing a request to the Texas Ethics Commission, Disclosure Filings Division at [email protected], said General Counsel Tim Sorrells. Or send a letter to that division at P.O. Box 12070, Austin TX 78711-2070. Requestors must include their name and address and what organization they represent (if any).

The disclosures filed by local government officials require a trip to city hall or the courthouse in the county seat.

The good news—so far as public access to these reports is concerned—is that nothing prevents media organizations from getting copies and posting them online.

This is the third straight year that The Austin Bulldog has obtained and published current financial statements filed by the mayor and council members.

In addition, The Austin Bulldog also collected and published older financial statements filed by these elected officials, going back as far as 2004 in the case of Mayor Lee Leffingwell; 2005 for Mayor Pro Tem Sheryl Cole and Council Member Mike Martinez; 2007 for Council Member Laura Morrison; 2008 for Council Members Chris Riley and Bill Spelman; and 2010 for Council Member Kathie Tovo.

The Austin Bulldog publishes these statements to provide greater transparency and allow increased scrutiny of elected officials by permitting citizens to monitor their actions for possible conflicts of interest.

And people do access these disclosures. The Austin Bulldog’s website counts each time a file is downloaded, and most of these reports have been downloaded hundreds of times, some more than 700 times.

The financial statements

Our initial analysis indicated that only the mayor’s reports appeared to be error-free. The six council members were notified via e-mail of the suspected discrepancies and asked to respond.

Council Member Spelman quickly replied to explain that his reports appear to comply with the statutes involved.

Mayor Pro Tem Cole and Council Member Riley quickly filed corrected reports.

Council Members Morrison and Tovo replied with some information and indicated they were checking on other aspects of the reports.

Council Member Martinez did not reply.

Links to individual financial statements for 2012 and previous years are listed below.

Mayor Lee Leffingwell—Leffingwell reported Julie Byers, who is a retired registered nurse, as his spouse in both reports covering 2012. His only occupational income is from serving as mayor.

Leffingwell draws retirement income from the Delta Pilots Retirement Trust, U.S. Navy, and social security. He also drew an IRA distribution of more than $25,000.

The couple owns their residence in Northwest Austin, valued at $530,249 according to Travis Central Appraisal District. They sold a vacation house in Loup City, Nebraska.

Leffingwell and Byers hold shares in 22 stocks including AT&T, Applied Materials, Cisco Systems, Delta Airlines, General Electric, Intel, Microsoft, and others. The estimated mid-range value of these stocks is more than $258,000, based on The Austin Bulldog’s research of stock values.

They also own shares in 10 mutual funds, with an estimated mid-range value of more than $59,000.

Leffingwell serves on the boards of Capital Area Metropolitan Planning Organization (CAMPO), Pecan Street Inc., the Mayor’s Fitness Council, and Clean Air Force of Central Texas. Byers serves on the board of the Martha C. Gooding Foundation for Compassionate Nursing, which provides financial assistance to students pursuing a degree in nursing.

City Code Statements for 2008 through 2010 (29 pages)

City Code Statement Mid-Year 2011 (4 pages)

City Code Statement for 2011 (6 pages)

Lee Leffingwell 2012 Statement of Financial Information (City Code) (7 pages)

Local Government Code Statements 2004-2010 (238 pages)

Local Government Code Statement for 2011 (30 pages)

Lee Leffingwell 2012 Financial Statement (Chapter 145) (20 pages)

Mayor Pro Tem Sheryl Cole—Cole reported her City Council pay as her only source of occupational income. She reported that her husband, Kevin Cole, is an attorney at The Cole Law Firm.

In addition to their homestead in Northeast Austin valued at $893,116, the Coles own four rental properties in Austin with a combined value of $450,332, according to the Travis County appraisal district. The Coles also own her father’s home, a $53,739 property in Wichita Falls, Texas, and two vacant lots in Austin worth a total of $32,500. Cole reported owning shares in 10 mutual funds.

City Code Statements 2008-2010 (45 pages)

City Code Statement Mid-Year 2011 (4 pages)

City Code Statement for 2011 (5 pages)

Sheryl Cole 2012 Statement of Financial Information (City Code) (5 pages)

Sheryl Cole 2012 Corrected Statement of Financial Information (City Code) (5 pages)

Local Government Code Statements for 2005 through 2010 (189 pages)

Local Government Code Statement for 2011 (36 pages)

Sheryl Cole 2012 Financial Statement (Chapter 145) (28 pages)

Sheryl Cole 2012 Corrected Financial Statement (Chapter 145) (31 pages)

Council Member Mike Martinez—Martinez reported Lara Wendler as his spouse and noted in his latest report that she made at least $100,000 last year as chief of staff for a Texas senator. (The city’s financial form requires rounding salaries of $100,000 or more to the nearest $100,000.) The Texas Tribune lists Wendler’s salary at $120,000.

Martinez’ council salary is $65,957.

Martinez reported that he and Wendler own two East Austin properties: his homestead is on the tax roll for $974,836, and a second house is valued at $148,821.

He reported in his City Code that he and Wendler own a combined 38 stocks and 11 bonds, the value of which has not been calculated.

City Code Statements 2008-2010 (35 pages)

City Code Statement Mid-Year 2011 (7 pages)

City Code Statement for 2011 (8 pages)

Mike Martinez 2012 Statement of Financial Information (City Code) (6 pages)

Local Government Code Statements for 2005, 2006, and 2008 through 2010 (120 pages)

Local Government Code Statement for 2011 (9 pages)

Mike Martinez 2012 Financial Statement (Chapter 145) (10 pages)

Council Member Laura Morrison—In her latest statements covering 2012, Morrison reported that her husband, Philip Morrison, makes at least $100,000 a year as a physics professor at University of Texas at Austin. The city’s financial form requires rounding salaries of $100,000 or more to the nearest $100,000.) The Texas Tribune states his salary is $107,846.

Morrison’s only listed source of occupational income is $65,957 from her position as council member.

The Morrisons reported owning 27 stocks, six bonds and shares in 31 mutual funds. They own stock in American Electric Power, Anadarko Petroleum, Cisco Systems, Dell, AT&T, FedEx, General Electric, IBM, and other business entities.

They drew dividends of more than $35,000 and income of more than $35,000 from rental properties.

The Morrisons live in a West Austin home, which the Travis County Appraisal District valued at $1.9 million, part of which they also rent out.

They also own houses at 3906 Bailey St. in Austin and 4410 NE 10th St. in Portland, Oregon.

Morrison reported that she does not serve on any boards of directors aside from those within city government.

City Code Statements for 2008 through 2010 (33 pages)

City Code Corrected Mid-Year Statements for 2009 and 2010

City Code Statement for 2011 (5 pages)

Laura Morrison 2012 Statement of Financial Information (City Code) (5 pages)

Local Government Code Statements for 2007 though 2010 (111 pages)

Local Government Code Statement for 2011 (28 pages)

Laura Morrison 2012 Financial Statement (Chapter 145) (28 pages)

Council Member Chris Riley—Riley lists his City Council position as the only source of occupational income, $65,957. He reported one gift from domestic partner Denise Brady, worth between $1 and $10,000, in his most recent city report.

Brady earns a salary of $61,254 as an attorney in the state Department of Family and Protective Services.

Riley reported owning shares in a eight mutual funds.

He owns a historic downtown home that serves as a four-plex valued at $807,077, according to Travis Central Appraisal District. He earns combined rental income of more than $25,000 from the two upstairs units.

Riley reported that he serves on the boards of Capital Metro, CAMPO, Central Texas Clean Air Coalition, the University of Texas’ Environmental Science Institute and the Technology Partnership of the Austin Chamber of Commerce.

City Code Statements for 2008 through 2010 (34 pages)

City Code Corrected Mid-Year Statements for 2009 and 2010

City Code Statement for 2011 (5 pages)

Chris Riley 2012 Statement of Financial Information (City Code) (5 pages)

Chris Riley 2012 Corrected Statement of Financial Information (City Code) (City Code) (4 pages, because he submitted only corrected pages and not a complete report)

Local Government Code Statements for 2009 and 2010 (50 pages)

Local Government Code Statement for 2011 (25 pages)

Chris Riley 2012 Financial Statement (Chapter 145)

Chris Riley 2012 Corrected Financial Statement (Chapter 145) (14 pages)

Council Member Bill Spelman—Spelman reported that the University of Texas at Austin, where he works as a public policy professor, is his sole source of occupational income. The Texas Tribune lists his salary at $96,311.

As a UT professor—and therefore a state employee—Spelman is barred from receiving compensation for his elected position. Article 16, Section 40(b) of the Texas Constitution prohibits (with some exceptions) a state employee from drawing a salary for serving as a member of a governing body.

Spelman, who is currently in his third term on the City Council (the last two beginning in 2009, the first 1997-2000) has served the city for seven years without financial compensation.

Spelman reported no occupational income for his wife, Niyanta Spelman. She is the unpaid executive director of the nonprofit Rainforest Partnership.

Spelman reported ownership of stock in 26 companies—including Sherwin Williams, Cummins Engine Co., Oracle, Pohang Iron & Steel, Dow Chemical, Valero Energy, Procter & Gamble, Boston Scientific, General Electric, Express Scripts, Qualcomm and Las Vegas Sands. Nineteen of the stocks are worth $5,000 or more. He also owns shares in 29 mutual funds.

The Spelmans live in a Hyde Park home valued at $417,165, in which they also rent out a garage apartment. In addition they receive rental income from two other Austin properties worth a total of $396,294.

Spelman also owns a partial interest in four sections of undeveloped West Texas ranchland in Irion County.

Niyanta Spelman is a board member of the Asian & Pacific islander American Health Forum, while the council member is on the boards of the Texas Municipal League, National League of Cities Transportation Infrastructure & Services Steering Committee, and Lone Star Rail District.

City Code Statements for 2008 and 2009 (46 pages)

City Code Statement for 2011 (5 pages)

Bill Spelman 2012 Statement of Financial Information (City Code) (6 pages)

Local Government Code Statements for 2009 and 2010 (74 pages)

Local Government Code Statement for 2011 (34 pages)

Bill Spelman 2012 Financial Statement (Chapter 145) (40 pages)

Council Member Kathie Tovo—Tovo reported sources of occupational income for husband Tom Hurt at Hurt Partners Architects, Hurt Asset Management, and West Fourteenth LLC, totaling between $40,000 and $110,000.

Her own salary as a council member is $65,957 and she reported no other sources of occupational income.

Tovo listed eight architecture and six energy clients between she and her husband, including Reliance Energy, Windsor Permian, XTO Energy, Holly Frontier, and Diamondback E&P.

Tovo and Hurt own stock or equity ownership in 10 companies. Through one of the companies, Ratliff Riker LP, the couple garnered income of $500,000 or more through sales of oil, gas, and land.

The couple’s homestead in north central Austin has a market value of $552,226, according to the Travis Central Appraisal District. Hurt owns a lot valued at $75,000. They also own a residential rental property in the Bouldin Creek area worth $437,028, according to Zillow.

Tovo and Hurt have “undivided interest” in ranch and mineral development land in Ector, Winkler, Atascosa, and Loving counties.

City Code Statement for 2010 (7 pages)

City Code Report for 2011 (8 pages)

Kathie Tovo 2012 Statement of Financial Information (City Code) (8 pages)

Local Government Code Statement for 2010 (42 pages)

Local Government Code Statement for 2011 (49 pages)

Kathie Tovo 2010 Financial Statement (Chapter 145) (34 pages)

Reports require only ballpark figures

The two kinds of financial statements that the mayor and council members must file (one required by state law, the other by City Code) are specific in few respects.

For example, real estate holdings must be reported by actual address. This allows public oversight of the decisions made by the council and how those decisions may affect the value of the elected officials’ holdings. The appraised value of this real estate may be ascertained by searching appraisal district records.

Other investments must also be reported, but determining their specific value is not possible.

If a council member has invested in a specific company, or stocks, or bonds, or mutual funds, that fact will be reported as to number of shares, expressed within broad ranges (less than 100, 100-499, 500-999, 1,000-4,999, 5,000-9,999, or 10,000 or more). However, the specific number of shares and their value is not reported, unless the instruments have been sold, in which case the amount of profit or loss derived from the sale is reported, but in ranges.

Income from interest, dividends, royalties, rents and trusts is also reported in ranges.

So while a review of these financial statements won’t pinpoint the wealth of these individuals, the sheer volume of holdings indicates our mayor and council members certainly didn’t need to seek elected office for the money.

That said, personal wealth often plays an important part in getting elected. In 2009 Lee Leffingwell loaned his first mayoral campaign $100,000. He loaned his 2012 reelection campaign $30,000. And 2012 mayoral candidate Brigid Shea backed her 2012 bid to unseat Leffingwell with $65,000 in loans.

City and state requirements

The mayor and council members—as well as candidates for these offices—are required to file two different kinds of annual personal financial statements: one in accordance with City Code Section 2-7-72, the other in accordance with state law: Local Government Code Chapter 145.

The city and state codes differ in the specific information officials are required to provide.

For example, state law does not require elected officials to report a spouse’s financial activity over which they exercise no control, but City Code does.

City Code also includes “domestic partners”—unmarried couples of the same or opposite genders that share resources and live together—in its definition of a spouse. State law does not recognize domestic partners.

State law asks officials to include information on dependent children, while City Code does not.

Both reports require officials to list all board and executive positions they hold, but City Code specifies they don’t have to include positions on entities owned by the city or created by the City Council.

The mayor and council members must file annual City Code statements covering the preceding year by the last Friday in April, and note any changes to the statements in mid-year updates due the last Friday in July.

They are also required to file a separate, state-mandated annual financial report no later than April 30.

Related Bulldog Coverage: This is The Austin Bulldog’s fifth story focusing on the financial disclosures filed by the mayor and city council members.

Some Council Members’ Finances Change Significantly: Mayor carries campaign debt, Riley adds domestic partner, Martinez adds investments, Cole reports spouse separately, and Tovo pays off $528,000 in real estate loans, August 22, 2012

How Rich Are Austin’s Mayor and Council Members? Most Are Pretty Well Off By Local Standards, With Extensive Holdings in Real Estate and Investments, June 27, 2012

Council Member Mike Martinez Reports Big Gains in Financial Assets, August 17, 2011

Council Members Riley and Shade May Have Violated Austin City Code, June 2, 2011

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