Richardson Charter Review Commission Meeting April 3rd, 2025
OPENING
Ten of the eleven commissioners are present. Commissioner Pratt is absent. City Secretary Aimee Nemer, Dep. City Secretary Crystal Brown, Asst. City Manager Dannette Garcia, Asst. Finance Director Todd Gastorf, Budget Officer Bob Clymire, COO Kent Pfeil, and City Attorney Pete Smith are also present. Tonight’s meeting covers Articles 11 (Budget), 15 (Taxation), and 16 (Bonds).
Chair Bright acknowledges two written comments submitted by Mark Steger and Mark Baustian. He does not state the subject of the comments. No speakers are present for the visitors forum of this meeting. I was present but didn’t have any comments to make for tonight’s sections. Mark Baustian had submitted a card but only intended to submit his comments for the record. Humorously, but innocently, Sec. Nemer mistook Mr. Baustian’s speaker card for the one I would usually submit. She calls my name to speak since I have done so at every meeting thus far. I appreciate the opportunity to speak but politely inform the commission that I did not intend on making remarks tonight. The room shares a moment of laughter as Chair Bright asks in jest if Sec. Nemer did this intentionally. She answers that it must just be out of habit. I will certainly plan to make remarks and submit a speaker card for the April 17th meeting.
Minutes of the March 27th meeting are approved unanimously.
Atty Smith notes that his memorandum for tonight’s meeting includes a recommended text amendment for Sec. 19.03 that was discussed at the last meeting. This amendment clarifies that charter amendments, regardless of the method, must go before the qualified voters of the city for approval at an election. However, since this did not make it onto tonight’s agenda, this amendment will be taken up at the next meeting.
ARTICLE 11 – BUDGET AND FINANCIAL PROCEDURES
The commission now considers the first of the three Articles covered tonight, beginning with Article 11, titled Budget and Financial Procedure. Atty Smith’s memo for this section references the pertinent state laws regarding taxation and budgets. Atty Smith also introduces the finance and budget staff present to answer any questions from the commission. Sec. 11.01 is titled Fiscal year. Sec. 11.02 is titled Preparation and submission of budget. Sec. 11.03 is titled Proposed budget a public record. The commission concludes no changes are needed for these sections.
Sec. 11.04 is titled Public hearing. Chair Bright reads comments submitted by Commissioner Pratt. He states that requiring publishing in a newspaper as the only means of public notice seems outdated. He suggests exploring other methods. Atty Smith states that state law apparently has not yet been updated to allow posting on a website or other means as public notice. Atty Smith includes a suggested text amendment in his memo that adds the following language: “…or by such other means as may be allowed by state law…” He explains that this would allow them to publicly post another way if the state legislature passes a law allowing other methods.
Commissioner Thomason asks for confirmation of which newspaper the city uses for public notices now. Atty Smith answers that it is the Dallas Morning News. He adds that this is very expensive. Commissioner Thomason states that municipalities must be keeping the Dallas Morning News in business. The commission unanimously approves the recommended amendment from Atty Smith’s memo.
Sec. 11.05 is titled Proceeding on adoption. Commissioner Strecker asks why no further public hearing is held in the case of amendments made to the budget after the initial public hearing. Atty Smith states that, if a visitor had a question based on any proposed amendments at such a meeting, the mayor should recognize that citizen and allow them to ask their question, even if the public hearing has already been closed. Atty Smith states that this should also be the protocol at public hearings on zoning files.
The commission deems no changes necessary to Sec. 11.06, titled Budget appropriation; tax levy. Sec. 11.07 is titled Transfer of appropriations. Commissioner Strecker asks what a nontax-supported public utility is. COO Pfeil answers that the water and sewer and solid waste funds fall under this category since they are fee-based. The commission also deems no changes necessary for Sec. 11.08, titled Unallocated fund balance.
Sec. 11.09 is titled Amending the budget. Commissioner Strecker asks how many times the budget has been amended. Budget Officer Clymire explains that this is done annually as part of the budget review and adoption process. COO Pfeil adds that mid-year adjustments are possible when unexpected trends occur, such as with sales tax. In such a case, staff will adjust both the revenue and expenditure side of the budget. Commissioner Dunn asks how other sources of income are calculated. COO Pfeil answers that they analyze trends and current economic conditions to estimate revenues. Property tax, sales tax, and franchise income collectively make up roughly 80% of the budget. The state sets sales tax rates. Commissioner Thomason notes that the city sets the property tax rate, but the appraisal district sets valuations. He asks how years-long lawsuits between property owners and appraisal districts affect budget planning. COO Pfeil answers that if refunds have to be issued after that fiscal year has passed, that is a factor that they consider in budget planning. If necessary, staff can recommend mid-year adjustments. Budget Officer Clymire adds that prior years’ outstanding lawsuits are tracked in the budget estimates.
Commissioner Thomason also asks how homestead and 65+/Disabled exemptions affect budget planning. COO Pfeil answers that the city has a policy that aims to keep the 65+/Disabled exemption equal to 30% of the value of the average qualifying person’s home. Council may implement a homestead exemption. Commissioner Thomason asks if any of this needs to be included in the charter. Atty Smith answers that he doesn’t see any need to include these in the charter since a lot of this is dictated by the state.
Sec. 11.10 is titled Adopted budget made available. Vice-Chair Quirk asks if any language should be clarified here regarding ‘sufficient copies’. Atty Smith answers that the state requires hard copies.
Sec. 11.11 is titled Independent audit. Commissioner Strecker asks why no competitive bids are required when designating a firm to conduct the annual audit. Atty Smith answers that state law dictates that accounting services cannot be chosen based on price. The city does receive information from multiple firms showing their history. Commissioner Dunn asks how this year’s audit went. COO Pfeil answers that this year’s audit had no comments.
The commission deems no changes necessary for Sec. 11.12, titled Defect shall not invalidate tax levy.
ARTICLE 15 – COLLECTION OF TAXES
The commission now moves on to Article 15, titled Collection of Taxes. Atty Smith reminds the commission that he has included references to pertinent state laws regulating taxation. Commissioner Thomason asks how the utilization of Public Facility Corporations (PFCs) and Housing Finance Corporations (HFCs) affect cities. These are entities that can receive public funds to provide housing at a certain price in exchange for tax benefits or tax exemption. He says that some cities have been taken advantage of by these entities since they do not seem to be properly regulated. He doesn’t want any of this happening in our home-rule city without the public having a say.
Atty Smith answers that both the previous legislature and this current one are trying to address this situation. Lawsuits are also pending regarding these situations. He acknowledges that loopholes exist that give developers too much leeway as far as tax exemptions and local control are concerned. This is all under the purview of the state legislature, not the city. Chair Bright asks if this can happen without the city being aware. Atty Smith confirms that currently, it can. That is the issue. Asst. City Manager Garcia adds that several bills in this current state legislature seek to close loopholes for these “traveling HFCS/PFCS”. One of those is HB 1585.
Sec. 15.01 is titled Property taxes. Sec. 15.02 is titled Power to levy and collect taxes. The commission deems no changes necessary for these sections. Sec. 15.03 is titled Tax payments. Commissioner Strecker asks what the penalty is for delinquent taxes. Atty Smith answers that state law dictates this. COO Pfeil answers that the penalty becomes 6% in February of that year with a 1% compounding interest rate. Additional penalties spelled out in state law and reflected in local ordinance may also be assessed in certain situations. The commission deems no changes necessary for Sec. 15.04, titled Tax lien.
ARTICLE 16 – ISSUANCE AND SALE OF BONDS
The commission now moves on to the final Article of the evening, Article 16, titled Issuance and Sale of Bonds. Atty Smith states that they have no recommended amendments to Article 16. He acknowledges a comment regarding separating different bond proposals on an election ballot. He explains that bond propositions are required to be separated by state law, so including these regulations in the charter isn’t necessary.
Sec. 16.01 is titled Authority to borrow. Commissioner Strecker asks if there is a limit to the city’s borrowing capacity. Atty Smith and COO Pfeil answer that the debt capacity is determined by year-over-year growth analysis. The city also has a policy of paying off debt faster. Commissioner Thomason asks if there is a policy for when to refinance debt. COO Pfeil answers that longer-term rates can be higher, so the city retains the ability to call the debt after ten years to refinance for the remainder of the original term. They have models in place and work with financial advisors to make these determinations. Commissioner Dunn compliments staff’s work to maintain the city’s bond rating.
I submitted an email asking a question about this section. I asked for examples of economic development programs that could be funded with borrowed money. COO Pfeil answered that this section allows the city to hold an election to fund these programs with debt. This could be used to provide incentives, assemble land, or used for other economic development projects. Garland apparently has such an item on their May 3rd Election ballot. They are using the funds for land assembly, development incentives, revitalization, and neighborhood vitality. Richardson has thus far never held an election to fund economic development projects with debt.
Sec. 16.02 is titled Bond election. Commissioner Strecker asks why only General Obligation (GO) Bonds require voter approval. COO Pfeil answers that GO Bonds are required by state law to be voted on in an election. Others are not. Commissioner Thomason asks for more clarification on Certificates of Obligation (COs). He specifically asks if there should be an established proportion between COs and GOs. Atty Smith answers that COs are restricted in their use by the state. Public notice is also required to provide citizens the opportunity to petition for a Referendum on the issuance. COO Pfeil adds that Richardson typically uses COs for fire apparatuses and ambulances. He is not aware of any practice or policy for a ratio of COs to GOs. State law restricts the use of these bonds to utilize them for core functions. The city also utilizes the most sensible type of issuance based on what the rate would be. Putting up the tax base against the debt issuance can result in lower rates. Atty Smith adds that the state sets the petition thresholds for Referendum on debt issuance. This is not set by the charter.
Sec. 16.03 is titled Authorized bonds. The commission has no comments on this section. Sec. 16.04 is titled Misapplication of public funds. Commissioner Gaziani asks about the language in this section that deems a public officer guilty of misapplication of funds if they misuse any funds arising from debt issuance. He asks if inserting a presumption of guilt in the charter should be reconsidered. He wants to be careful about pre-empting the criminal justice system. Atty Smith answers that an officer in such a case would still receive a fair trial through the court system. He clarifies that this charter language doesn’t pre-empt the court system. This just establishes a determination under the city’s local control. Atty Smith sees no legal issue with this language.
Commissioner Dunn asks if this enables the city to take our own action in addition to the officer being subject to prosecution. Chair Bright notes that this may enable the city to terminate or take another appropriate action for such an officer. Atty Smith agrees to come back with recommended language improving clarity on this section. Commissioner Thomason agrees with the need to improve clarity in this section while maintaining the boldness of the language.
With that, the commission concludes its business, and the meeting adjourns after an hour and 12 minutes. The next meeting will cover some of the most important sections of the charter, Articles 3 and 4. These cover the City Council and the Nomination and Election of City Council Members. This meeting will occur on Thursday, April 17th at 6 pm. I beg you, please, do not let me be the only speaker at this meeting. This commission needs to hear from you on these sections. Do you want longer or staggered terms? Do you want term limits to be reset when a councilmember becomes mayor? Do you want to explore ranked choice voting or single-member districts? All of these and more will be covered on April 17th. I hope, for the sake of our home-rule city, that I see you on the 17th.