New hospital district board gets briefing on taxes

The following is part of the transcript from the May 28 special meeting of the Somervell County Hospital District board held at the Somervell County Citizens Center. Wes Rollen, chief appraiser of the Somervell Central Appraisal District, briefed the board on the process of determining the property tax rate for the hospital district before the county’s new fiscal year begins on Oct. 1.

He also discussed the potential effect of the Chapter 11 bankruptcy filing by Energy Future Holdings, parent company of the Comanche Peak Nuclear Power Plant, the county’s largest single taxpayer.

Chief Appraiser Wes Rollen briefs the hospital district board. Screen shot from Glen Rose Medical Center posted video.

Chief Appraiser Wes Rollen briefs the hospital district board. Screen shot from Glen Rose Medical Center posted video.

(Board members in attendance were Chip Harrison, president; John Parker, vice president; Paul Harper, secretary; Eugene Brode, Dr. Karen Burroughs and Brett Nabors. Ronald Hankins was not present. Also present at the board table was Ray Reynolds, chief executive officer of Glen Rose Medical Center.)

CHIP HARRISON: Item No. 8. Wes down at the CAD is going to give us a brief description of basically how the tax structure works, how the tax rate is determined, et cetera, et cetera. Wes and I did have a discussion earlier today and because of our pending litigation with the nuclear power plant filing bankruptcy, that’s kind of a hands-off topic. I can’t tell you…I ain’t going to ask him, so please, y’all don’t either. And so I appreciate Wes and the lawyer coming to share this with us and we’re all ears.

WES ROLLEN: Thank you very much. What I handed you there is a copy of your collections summary. And I wanted to start with that. It just kind of gives you an idea of how much money your tax rate produced for you last year. The collections summary shows that your balance collected on was $2,952,476.67 and right now we’re 99 percent collected on that balance. So your tax rate of 10-and-a-half cents last year, that’s how much money you garnered from that. And then I want to flip over to page two. This is kind of a breakdown of the hospital district, how your taxable value last year was $2,851,469,723, and that you’ve got a proposed tax rate of 10-and-a-half cents. Once again, it produced your $2.9 million.

AUDIENCE MEMBER: Move closer to the mike, please.

ROLLEN: Yes.

HARRISON: Wes, please start back at the top of the page for the people who couldn’t hear.

ROLLEN: Okay, at the top of the page, the tax year 2013, you’ve got a taxable value of $2,851,469,723, proposed rate of 10-and-a-half cents and it produced $2.9 million in tax dollars. There was no effective rate or rollback rate since it was the first year of the hospital district, so you will be going through that process that we’ll talk about in just a second. Just included on that sheet also that you have in front of you is that the average homestead value in the county last year was $121,862, and the average homeowner, after his homestead exemption, paid $102.36 in hospital district tax. The average homestead value for those folks over the age of 65 was also $121,862 and those folks paid $49.86 for their hospital district tax.

Sheet number three talks about what is an effective tax rate and this is going to be what you’re interested in coming forward. This is basically what it’s going to take once we establish a certified value for this upcoming year to achieve the same amount of money that you did in last year’s budget. At this point, we have given you some preliminary numbers — I gave to Mr. Reynolds earlier this year — and those numbers…it’s pretty hard to say how well they’re going to reflect your upcoming values at this time. With (unintelligible) and litigation, we’re just making estimates on what we think that number may end up, but it could be significantly different either direction. So at this point, it’s really early for me to give you a good idea. The estimate we gave you is a working idea of what we think your upcoming value is going to be, but that’s strictly an estimate at this point. And that number was roughly $2.55 billion, so down effectively $300 million from last year.

HARRISON: Was that primarily devaluation of the nuclear plant or was that some other contributing factors in there?

ROLLEN: At this point, we’re estimating it’s the devaluation of the nuclear plant. But again, we’re not far enough into that process yet to know whether or not that’s going to be an accurate number or not.

HARRISON: And have we seen any noticeable increase in new construction or added properties or new subdivisions, that kind of stuff?

ROLLEN: None. You guys want to take a minute and look over that sheet, if you have any questions about it. The last sheet is just a number of dates there that you have to be aware of going forward on setting your tax rate. On or before July 25, that’s an important date because that’s when I’m going to give you your certified tax roll. So that’s going to be the first time that you’re going to actually have a number that you can start building your tax rate on. We anticipate that we should be on time getting that information to you, but the bankruptcy will have an effect on that. So at this point we’re still anticipating that we’re going to have you your numbers on time this year.

August 7, you notice on there it says taxing units calculate, that certain taxing units publish notices. That’s basically when you start the effective rate process, which means you take your budget that you work off of for the upcoming year and you start figuring out whether or not the tax rate is going, what it’s going to take based on your certified value to receive the number that you need, at least from what you had last year.

And then August through September there, you have to get your tax rate adopted sometime in that time period so bills can go out on October 1.

PAUL HARPER: So if we wanted to set or let’s say, eliminate, the tax, we would have to do it before the end of September.

ROLLEN: Yes.

HARPER: Okay.

JOHN PARKER: We would have to find that much income for that much less expense in time by then.

HARRISON: Any other questions?

PARKER: Your best guess here on this next-to-last page was that to keep about the same rate of income, it would be 10-and-three-quarters rather than 10-and-a-half cents, roughly?

ROLLEN: That’s what I’m guessing, yes.

PARKER: I realize it’s all a guess.

ROLLEN: Right. If we hold to where we were last year on our numbers, that would be a real…

PARKER: You’re the best guesser in the room.

ROLLEN: …a very, very conservative estimate right now. It could be significantly less…

PARKER: I understand.

ROLLEN: … or it could be significantly more.

HARRISON: All right, if we have no more questions for Wes, I’d like to thank you all for coming. I appreciate this. I appreciate the time you’ve given me so far.

ROLLEN: Thank you.

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