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Sam
Sam, Attorney at Law
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Texas Municipal Law: Our city government is set to pass a

Customer Question

Texas Municipal Law: Our city government is set to pass a budget next week. They have held public hearings, but at no time have they put the proposed budget on the website or in the paper for citizens to read. Is that legal ? Also, in June they passed
a $10.1 Million bond or Certificate of Obligation, with no stipulations as to how to spend it. They have had several meetings deciding how to spend the $10.1 on capital improvement. Now they have a full list of appropriations. They want to pass that next week
also. The citizens have never seen the list of appropriations. Is this legal? The city budget is only $7 Million. Interest on the $10.1 Million is 3.987%, which will be over $400,000.00 per year, which will mean tax increases and budget cuts in the future.
They think it is free money !! What can a taxpayer do if these things are not legal? Thanks,
Submitted: 1 year ago.
Category: Legal
Expert:  Sam replied 1 year ago.

Hello

This is Samuel and I will discuss this and provide you information in this regard

Here is the Link for you to review the Texas law on this issue As you can see there is no law mandating the budget, etc be posted or mailed or delivered to anyone and no more than one hearing is required. However, I suggest that the budget should be available for the asking by anyone wanting to review it before the hearing.

Sec. 102.006. PUBLIC HEARING ON PROPOSED BUDGET. (a) The governing body of a municipality shall hold a public hearing on the proposed budget. Any person may attend and may participate in the hearing.

(b) The governing body shall set the hearing for a date occurring after the 15th day after the date the proposed budget is filed with the municipal clerk but before the date the governing body makes its tax levy.

(c) The governing body shall provide for public notice of the date, time, and location of the hearing. The notice must include, in type of a size at least equal to the type used for other items in the notice, any statement required to be included in the proposed budget under Section 102.005(b).

Sec.(###) ###-#### ***** NOTICE BY PUBLICATION FOR BUDGET HEARING. (a) The governing body of a municipality shall publish notice before a public hearing relating to a budget in at least one newspaper of general circulation in the county in which the municipality is located.

(b) Notice published under this section is in addition to notice required by other law, except that if another law requires the governing body to give notice, by publication, of a hearing on a budget this section does not apply.

(c) Notice under this section shall be published not earlier than the 30th or later than the 10th day before the date of the hearing.

(d) Notice under this section must include, in type of a size at least equal to the type used for other items in the notice, any statement required to be included in the proposed budget under Section 102.005(b).

Expert:  Sam replied 1 year ago.

Please note that I can only provide information for what you ask. In that regard, if you have other questions or need clarification, please post them here. Otherwise, I appreciate your Positive Rating as that is how I get credit for my time and information.

Customer: replied 1 year ago.
Thank you, Sam. "Any statement required to be included in the proposed budget under Sec.102.005b" What statement would be required? Would that include the entire proposed budget? (Probably not, it's about 100 pages).On the bond: They passed the $10.1 Million bond without any stipulations because "interest rates were low". Then they apparently asked the departments to request funding so they came up with $9.5 Million in appropriations so far. The public has never seen these. They have stated that they will reveal them to the public on Sept.8 when they pass the budget. (When it will be too late for the public to respond.)
So, my question is, are the appropriations from the bond money ($9.5 Million) considered to be part of the budget?
They have not had separate Public Hearings on the bond money. How can they have held a public hearing when the public has never seen the bond appropriations?
It just doesn't seem right.
The $7 Million budget is OK, But the $10.1 Million bond will mean big tax increases and cuts to services in the future.
The bond appropriations do not appear in the proposed budget. They are in a separate list.
Obviously I'm confused. I want to ask them to space the bond out over 10 years, $1 Million per year. The city can handle that.
But the city can't handle $10.1 more debt...Interest is 3.987%, which would be $400,000.00 per year. Debt service is already $1.2 Million per year. Would it not be true to say that adding $10.1 Million more debt will mean more debt service, and that will take money away from other parts of the budget, such as services, and mean more tax increases.
I guess I'm asking if they can be required to hold separate public hearings on the $10.1 Million bond, since the public hearings already held were on the budget, and they do not include the bond money in the budget the way it is written.
Thanks,
Expert:  Sam replied 1 year ago.

Hello

Thank you. Here is the provision under 102.005 at this link which states

b) A proposed budget that will require raising more revenue from property taxes than in the previous year must contain a cover page with the following statement in 18-point or larger type: "This budget will raise more total property taxes than last year's budget by (insert total dollar amount of increase and percentage increase), and of that amount (insert amount computed by multiplying the proposed tax rate by the value of new property added to the roll) is tax revenue to be raised from new property added to the tax roll this year."

I cannot address your budget concerns - I can only provide the law as I have done. If you ask for a copy of the budget you can get it, review it and then the hearing is where these issues are raised as to bonds, and where the money will be generated to cover any increase in the budget. The issue on bond hearings should be in the charter of your municipality. And you can ask for a copy of that, too.

Expert:  Sam replied 1 year ago.

And so you asked if it was legal, and according to the law yes it is as I provided. You asked what the public can do and I suggest you contact your elected municipal council persons and tell them that you are not happy with the spending, and that you hope they will not pass such a budget and then you appear at the hearing and express it openly and publicly while the press is there and then at the next election you vote the bums out.

Customer: replied 1 year ago.
Sam: Thank you...
1) I read the city charter, and there is nothing in the charter about bonds. Is there some Texas state law that allows the city to issue bonds?
2) Are they required to hold separate public hearings on the $10.1 Million bond, since the public hearings already held were on the budget, and they do not include the bond money in the budget the way it is written ?I have a gut feeling that what they are doing is illegal, but I can't express it in legal terms.
Maybe they are violating Texas Open Meetings Act by issuing bonds without a public hearing...Thank you, ***** ***** me...This is important...Elzie
Expert:  Sam replied 1 year ago.

Elzie

I can provide you some links and you can review to see if this is what you are needing

But they would only be violating the Open Meetings laws if they are having meetings in private

Please use the links below

This is the Main Link for the Texas Statutes pertaining to Municipal law

In that link under Title 4 Finances You will find

TITLE 4. FINANCES

SUBTITLE A. MUNICIPAL FINANCES

CHAPTER 101. GENERAL FINANCIAL PROVISIONS AFFECTING MUNICIPALITIES

CHAPTER 102. MUNICIPAL BUDGET

CHAPTER 103. AUDIT OF MUNICIPAL FINANCES

CHAPTER 104. MUNICIPAL INVESTMENT OF TRUST FUNDS AND SPECIAL DEPOSITS

CHAPTER 105. DEPOSITORIES FOR MUNICIPAL FUNDS

CHAPTER 106. MUNICIPAL CHILD SAFETY TRUST FUND

CHAPTER 107. OBLIGATIONS FOR CERTAIN LIABILITIES TO PUBLIC PENSION FUNDS OF A MUNICIPALITY

CHAPTER 108. MUNICIPAL BONDS FOR CERTAIN DEFINED AREAS

SUBCHAPTER A. GENERAL PROVISIONS

Expert:  Sam replied 1 year ago.

I suggest if you are concerned they are breaking laws that you will want to consider at least consulting with a local attorney - it does not have to be in the Municipality - to go over all the process with you. The Statutes as you can see are detailed

If I am understanding you correctly you are concerned the Bonds were not discussed before the budget and generally the bond hearings are a separate and apart matter. Bond hearings can be held before or after a budget is adopted.

Expert:  Sam replied 1 year ago.

Hopefully that is helpful to you. I am not sure I can provide you any further information.

Customer: replied 1 year ago.
Sam: I do not believe they have had bond hearings...Are they required?
Also, I read the statutes you cited...But I am not an attorney and do not understand them.
I am a college graduate and I can understand if you explain them to me.
Thanks,
Expert:  Sam replied 1 year ago.

Ok. Well, the statutes state there needs to be bond hearings. But they do not need to be before or after a budget hearing. Although they are generally held before the the upcoming fiscal year which is June 1 of any given year. Bond hearings are generally advertised in the local paper

Expert:  Sam replied 1 year ago.

If you talk to a local news reporter who covers municipal bonds for your local newspaper, they may be able to point out all the laws to you and show how they are being applied and if they are in violation. The county - not municipal - attorney's office should be able to do the same. I really can only point out the statutes to you. It is very difficult for me to do anything else via this medium but provide you the statutes and the guidance as to how you can sit down with someone local to teach you the process.

Expert:  Sam replied 1 year ago.

Anytime taxpayer money is being spent or bonds are being bought or sold, there must be advertisement in the local papers and hearings held and the hearing dates advertised, generally in the legal notices and also the local newspapers right about them.

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