TCAD pares back budget hike to 12.8 percent

TCAD plans multiyear spending increases to cope with growing workload.

The Travis Central Appraisal District plans to increase its budget by 12.8 percent next year but will dip into reserves and delay 13 new hires until 2023 in order to avoid an even larger increase.

TCAD leaders pitched a 24 percent increase at a board work session May 25th, but after pushback from the board, they returned Tuesday with a trimmed-down proposal.

“After our budget workshop we got direction from our board and took another look,” said Chief Appraiser Marya Crigler. “We have made it so that it is a multiyear plan, and we are also looking at utilizing some of our reserve funds to limit how much the overall increase would be.”

The new proposal calls for a budget increase of $2.6 million in 2022. It would use a net $1.6 million in reserves, including $1.5 million from a litigation reserve.

TCAD would add 15 new full-time positions in 2022 and would ask the board next year for funds for another 13 workers in 2023. That would break apart the hiring plan presented at the May 25th work session, which had asked for 28 new positions all at once.

The agency would also increase pay by 12 percent for clerical staff, 7 percent for appraisers, and 3 percent for management. That’s unchanged from the earlier proposal, and is necessary to attract qualified workers, according to Leana Mann, TCAD’s Director of Operations.

Even with the pay raise, clerical salaries at TCAD would still be lower than both private and public sector equivalents, Mann said. The current starting rate for a clerical worker at TCAD is $15.77 per hour, and that would go up to $17.66 per hour.

“TCAD has struggled to find applicants and has had applicants reject jobs because the starting pay was too low,” Mann added.

TCAD can little afford to have vacancies. In the past decade, the tax roll has surged in value by $158.7 billion, with the addition of 62,400 parcels. That means the agency must now complete nearly double the number of yearly field inspections, despite having the same number of staff as it had a decade ago. Additionally, protests, lawsuits, and arbitrations have all skyrocketed, adding to the district’s workload.

Board approves increase

TCAD’s board approved the budget proposal by a vote of 7-1. “We must give sufficient resources to our chief appraiser to be able to do her job, particularly in light of recent legislative changes and the increasing workload,” said Debbie Cartwright, a recent AISD appointee.

The vote gives TCAD staff a green light to present the budget proposal to the various taxing entities that fund TCAD, including the City of Austin, Travis County, 15 school districts, and dozens of other local governments. TCAD’s constituent taxing entities have the ability to override a budget adopted by TCAD’s board, though that hasn’t happened in recent memory.

TCAD will still have time to tweak the budget after getting input from the various taxing entities, then the board must hold a public hearing and formally adopt the budget by September 15th.

Anthony Nguyen, an appointee of East Travis County, was the only board member to vote against the new budget plan. He said, “I think this is going to be a potentially tough sell to at least some of my taxing units. A 12 percent increase is quite a bit more than they can raise.”

Nguyen was referring to a state law that limits most forms of local government to a yearly tax increase of either 3.5 percent or 2.5 percent, unless a disaster has been declared.

He said he would rather adopt a budget increase of 7 percent, reflecting a 3.5 percent change for this year and a 3.5 percent change to make up for last year, when the budget stayed flat.

“I think we need to do more in cost savings. Our legal expenses went way over-budget, our number of protests is very high, and we don’t seem to be doing anything to lower our workload by lowering the perception that we’re doing a good job. So we have all these protests. I’d like to see more efforts to reduce our workload and reduce our protests.”

Several other board members pushed back at those remarks. Cartwright said it was “apples and oranges” to compare the TCAD budget to those of the taxing entities. “In view of the fact that there was no increase last year, I think a 12 percent increase is completely appropriate.”

Theresa Bastian took issue with Nguyen’s suggestion that TCAD could be doing more to lower its workload: “We are in a rapidly appreciating real estate market and all of these protests being filed by these companies is a function of the market, and not a function of something that TCAD can control… For those reasons I do believe that the increase is warranted.”

Efficiency measures

Ahead of Tuesday’s budget vote, Leana Mann briefed board members on a variety of metrics of operational efficiency commonly used by appraisal districts.

The agency’s budget as a percentage of the total market value is the lowest in the state among major appraisal districts. The $20.2 million budget also equates to a per capita cost of $13.52, the fourth lowest among major CADs, and well below Harris CAD’s cost of $19.25 per person.

Measured as a percentage of total levy, TCAD’s budget is the second lowest among major appraisal districts. Travis County performed worse in terms of budget to parcel count, but Mann downplayed that, saying, “Only one major metro CAD uses the cost-per-parcel as an indicator in their annual report.”

Board members had requested that Mann provide these statistics to justify the spending increase. They were meant to show that TCAD is relatively underfunded and relatively efficient compared to some of the other large appraisal districts in the state.

Looking ahead, however, the county faces a variety of pressures that could hamper operational efficiency. Property owners in Travis County are the most litigious of any major county in the state. “We have the highest number of lawsuits by count and by value under lawsuit,” said Mann. Travis County also had $148 billion of property under protest last year and 85.6 percent of protests were agent-represented, higher than any other CAD.

Certification status

TCAD faces a July 20th deadline to certify the tax rolls. That’s important to local governments in Travis County because they must adopt a budget and tax rate in either August or September, and they can’t do so without the certification. But TCAD can’t legally certify the tax rolls if more than 10 percent of total appraised value remains under protest, as is the case at present.

It’s up to the Appraisal Review Board (ARB), an independent body that’s supported clerically and financially by TCAD, to resolve protests through a process of informal and formal hearings. ARB Chair Thomas King is overseeing the protest hearings, in which property owners or their agents present their case to three-member citizen panels.

The task of the board is daunting, with 135,500 protests filed this year, according to the chief appraiser. At Tuesday’s meeting, Crigler was non-committal about whether TCAD and the ARB would meet the July 20th deadline.

“From what I’ve seen in the scheduling requests at this point, there are some concerns,” she said. “A lot depends on the efficiency of the ARB and if they are able to complete what has been scheduled each day. Or do we wind up having a lot of unfinished dockets?”

To-date the ARB has conducted 40,000 informal meetings and resolved about $25 billion in protests. TCAD must certify $290 billion to reach the 90 percent threshold. To get there, the review board is planning to hold dozens of formal hearings daily, starting mid-June, Monday through Saturday, with priority given to hearings on the most valuable properties under protest.

Sniping at the dissenter

At the end of TCAD’s board meeting several members called for a training for board members about the board’s media policies. The suggestion followed a June 4th YouTube webcast appearance by Anthony Nguyen, the one dissenter on the budget vote Tuesday.

Debbie Cartwright proposed that board members needed a “refresher” on the “fiduciary responsibilities and the statutory requirements for boards of directors.” She suggested that the board’s attorney could carry out a 30-60 minute training in the fall.

Although Cartwright didn’t name Nguyen, she was asked by fellow board member Bruce Grube whether the training would cover “rules that would pertain to board members regarding public speaking on behalf of the board.”

“Yes, sir, that is exactly what I’m discussing,” she replied, “because we have a very unique statutory responsibility and from time to time I think we need to be reminded of it, and the limitations that we have also” (emphasis added).

“It’s really much needed, Mr. Chairman,” agreed Blanca Zamora-Garcia.

Crigler said she would work with some attorneys to put together a training program on the topic.

For his part, Nguyen told The Austin Bulldog that he thought the training proposal was a direct response to his appearance on the YouTube broadcast. He noted that he had separately also received an email from Board Chair James Valadez about his media appearance.

In the June 4th email Valadez wrote, “This morning I became aware that you are scheduled to appear on a local podcast, Real Estate Lab, with several local realtors… As a reminder, as a board member you are neither an employee nor authorized representative of the Travis Central Appraisal District.”

Valadez went on to cite a board policy that says, “Individual board members shall have the authority to speak on or act on behalf of the Board only as consistent with a resolution or other specific authority granted to an individual Board member by a majority of the Board members present at a meeting held in compliance with the Open Meetings Act.”

But then Valadez went a step further. He wrote that “only authorized representatives are tasked with speaking” about “TCAD’s work and the agency’s role in the property tax system.”

He then asked that Nguyen not speak publicly without first clearing it with a TCAD staff member: “It is concerning that this is not the first time that we have had to remind you of this policy. In order to avoid future problems, I strongly encourage you to refer any requests to appear in public forums and speak on TCAD-related issues to the TCAD Communications Officer, Cynthia Martinez.”

Nguyen says he felt the board was trying to silence him: “I understand my role and I understand I don’t speak for the board. But they give me the impression that they don’t think a board member has the right to communicate with the public or talk in any way.”

Nonetheless, Nguyen made clear during the YouTube discussion that he did not represent the whole board. He introduced himself as a “Pflugerville resident,” adding, “I sit on the Travis Central Appraisal District board of directors but today I am here representing myself. Anything I say is not reflective of my board’s positions, it’s strictly my opinion… I’m only speaking for myself.”