More EMS Spending Coming

It has been reported that the City needs two more ambulances for the city within the next 18 months.  Also, two new firehouses are required to be constructed over the next 18 months.  Most likely one will be built in conjunction with ESD 8 on Williams Drive near Four T Ranch Road and the other one will likely be built in the Southeast quadrant of Georgetown.  Details about specific locations will be provided as they become available.

So it appears the City Council is again ready to borrow more money to expand city services.  This is in addition to the 23% increase in the city budget for FY 2016. Since the city never funds capital projects out of current revenue, expect more bonds to be issued increasing the long term debt burden.

Remember, the city could have prioritized the dispatch process to send only the Williamson County ambulance on medical calls instead of creating the city's own ambulance service. That would have reduced the number of times two vehicles (a fire engine and an ambulance) were dispatched to a single call, thus increasing the number of vehicles available to respond to multiple emergencies.  This would allow for quick response to a fire incident that occurs within minutes of a 9-1-1 (medical) call.

The city council appears ready to spend more of your money!

Does Georgetown PD Require Written Consent for Property Search?

Police often ask to search a person's property to determine if there is any illegal activity being conducted.  It is every citizen's right under the US Constitution to deny permission unless there a properly executed search warrant signed by a judge.  There are instances where the police think they have received oral permission and the property owner thinks they did not give permission.  This can subsequently cause many problems for the property owner, the police, and a prosecutor if evidence of a crime is discovered.

A federal lawsuit has recently been filed in San Marcos alleging the police conducted an illegal search that was not authorized by the property owner. Link

There is a simple straight-forward solution that would prevent any misunderstanding about whether permission for a search was granted or not: Employ a written search consent form signed by the property owner in those instances where there is no official search warrant. The article in the Link provides a more extensive analysis.

This seems like a good idea and Georgetown's police chief should implement such a policy if he hasn't already.

Another $160.6 Million in Debt for Georgetown Taxpayers? Thanks Georgetown ISD

Has anyone noticed that the voters of Georgetown are being asked to approve another $160,600,000 in debt to build and refurbish schools in Georgetown ISD?

We will have some insightful financial analysis in the coming days. In the meantime notice that according to The Sun paper, $8650 has been raised by a political action committee to convince the voters to approve the bond package at the November 3, 2015 election. Voters should also be aware that $5,000 of the $8650 was contributed by contractors, architects and engineers and that 3 of the 4 contributors are from outside of Georgetown!  Follow the money folks if you want to know who benefits financially.  Frankly, $5,000 for a piece of the $160,600,000 pie seems really cheap (sarcasm).

Texas Has a Lot of Debt

Because the economy has been better than in most other states, it is easy to forget how much debt the state has accumulated. The Truth in Accounting organization has calculated the total debt and the debt per taxpayer for all fifty states.  There are eleven states whose assets exceed liabilities and Texas is NOT one of those states. Texas ranks 27th out of 50 with a tax burden of -$8300 per taxpayer. A more complete analysis of Texas debt is shown in the chart following:

 Keep in mind that these figures do not include county and city debt.  Georgetown has and continues to accumulate bond debt, pension and healthcare obligations.

Georgetown, Williamson County, the school districts and the state need to reign in the spending to no more than population growth plus inflation!  Tell your elected representatives of your concern and that you expect them to reduce the growth in spending and quit financing government with more debt!

Austin Sues Over Unequal Appraisal System

Across Texas, homeowners are feeling the pressure of high property taxes, and our state’s broken commercial property tax system bears part of the blame.  As noted in a previous post, Proposition 1, which is on the ballot in November gives some property tax relief, but, potentially much more relief could be provided to home-owners if commercial property was valued at market value.

The City of Austin recently contracted for an analysis comparing appraised values of commercial properties to actual sales prices over the years of 2012 through early 2015.  They found the average undervaluation in the year of sale was:

-  48% in 2012
-  44% in 2013
-  53% in 2014

The average undervaluation for these three years was 47%.

They segregated commercial property into two categories; unimproved and under-improved land versus developed property.  The greatest undervaluation was for the unimproved and under-improved land and the undervaluation for 2012 through 2014 was 92%.

The effect of this disparity in valuations of commercial property and residential property is to cause residential property to pay a larger share of the property taxes that are levied and collected by the taxing entities.  If more money was collected from commercial property owners, then the money collected from residential property owners could be reduced.

The primary cause of the undervaluation seems to be the unavailability of sales price data to the Assessor on commercial properties.  There is currently no Texas law requiring disclosure of sales prices.  Thus, the obvious solution would be for the legislature to pass a law requiring sales price disclosure.

Austin has filed a law suit stemming from a petition the city filed in June with the Travis Central Appraisal District.  It contends that the appraised values of billions of dollars in commercial and vacant land do not match market prices, a violation of the state Constitution's requirements that all property be taxed “in proportion to its value” and in an “equal and uniform” manner.  State Comptroller Glenn Hegar is also listed as a defendant.

Perhaps the City of Georgetown should conduct a study to determine if the under-appraisal of commercial property is an issue in Georgetown.  Let your city council person know you are concerned about this potential issue.

Here is a link to a report on the Austin law suit. http://www.texastribune.org/2015/08/24/austin-sues-texas-over-unequal-appraisal-system/

Public Hearing on Airport Fuel Farm

The Georgetown Transportation Advisory Board and Governing Body held a Public Hearing for a new fuel farm at the airport on Friday, October 9. Approximately sixty citizens were in attendance. There were twenty nine speakers of which twenty eight were adamantly opposed to increasing the airport capacity and they viewed the movement and sixty percent capacity increase in the fuel farm as the "camel's nose under the tent" for additional increases in take-off and landings and ground engine tests. One speaker was neutral on the fuel farm. He was concerned about the wait line for aviation gasoline and the starting and stopping of the aircraft engines as the line moved forward to the filling station. He viewed this as a hazardous operation which the proposed plan does not address. 93 percent of the speakers lived in neighborhoods around the airport.

The Board chairman told the audience at the beginning that the Board would not ask any questions, comment on any testimony, or engage the citizens in any manner. Par for the course!

Several people commented on the lack of adequate communication to the people living around the airport about the Public Hearing. They indicated that multiple methods of notification should be used including mailings to all the affected residences. Several people complained about the time of day for the Hearing as it precluded working people the opportunity to provide input. Again, not very considerate of the citizens who pay taxes and form the backbone of the community.

Many issues were raised including the concern that property values will be adversely affected by an airport with increased operations. There was growing concern expressed about safety and increased noise and its effect on children in the home and the nearby schools. It was also pointed out by several speakers that the location of the airport near the center of Georgetown is unsuited for a growing community and an expanding airport. It was pointed out by at least two speakers that increased airport operations would have a negative effect on wildlife in the designated wildlife habitat areas.

Finally, almost all speakers spoke against a Finding of No Significant Impact. They all wanted a full Environmental Impact Study for the fuel farm and the other planned capital improvement projects before any other actions are taken.

As a final insult to the participants, they were informed as they were leaving the Hearing that they would have to submit written copies of their testimony for the testimony to be included in the official records of the Public Hearing. Many participants spoke extemporaneously without the aid of notes or prepared testimony. This places an additional and unnecessary burden on those citizens as the Hearing was recorded and that recording could easily be incorporated into the official record.

Does the City Listen to Its Citizens?

Just returned from the Georgetown Transportation Advisory Board and the Governing Body which held a Public Hearing for a new fuel farm at the airport.  Is the City leadership out of touch with its citizens?  Whenever citizens attend City Council meetings or any of the City established advisory boards meetings, there is usually an opportunity for citizens to speak on any items that are on the agenda.  Unfortunately, there is never any real-time feedback to the citizens who have taken the time to attend the meeting and to constructively provide input to the Council or Board.  This lack of dialog leaves the citizens feeling extremely frustrated and suspicious that there are “hidden agendas” and non-public deals being negotiated and implemented to benefit specific individuals, companies or industries.  Only an open and transparent dialog between those who govern and the citizens can inspire trust between the citizens and their government.

The Council makes many excuses for not engaging in public dialog with Georgetown’s citizens ranging from, “it just a few of the same old people” to it is “the same old issues”.  There are “smart” people in the community with ideas on how the Council and Boards can constructively engage with the citizens in a public, on-the-record meeting.  Let us hear the ideas and give them to your City Council representatives.

SunEdison, Georgetown's Solar Electric Provider, Called Hedge Fund Hotel

The list of hedge funds long SunEdison Inc (NYSE:SUNE) reads off like the who’s who of the hedge fund industry. In first place is David Einhorn‘s Greenlight Capital, which owned 24.8 million shares of the solar company at the end of June. SunEdison is Einhorn’s second largest equity position after Apple. In second place is Dan Loeb’s Third Point, which held 12.4 million shares at the end of the second quarter, making the solar company Loeb’s sixth largest equity position. In third place is Larry Robbins’s Glenview Capital, which owned 11.4 million shares. Overall, 93 out of over 730 elite funds owned a stunning $5.68 billion worth of the company’s stock (representing 69.10% of the float) at the end of June, up from $4.44 billion a quarter earlier. 

 It is likely that Einhorn is quite unhappy with the value of his investment as the stock price has declined from $33.45 in July to about $9.00 per share today. That is a 73 percent decline in three months!  Many retail stock analysts are recommending that investors sell the stock due to the uncertainty about the future.

SunEdison spins off their solar generating plants to a seperate company called a "yieldco" by signing long-term contracts with users like Georgetown.  This "yieldco" is supposed to provide consistent dividends to shareholders.  SunEdison's "yieldco" is called TerraForm Power, Inc and it had to borrow the money to purchase the power plants from SunEdison.  Of course SunEdison had to backstop the loans since TerraForm initially had no assets or insufficient assets to back the loans.

A CreditSights report concludes it is possible SunEdison to be dragged down by TerraForm and the added burden of posting cash collateral for the margin loan that was backed by stock.  More reporting can be found here. SunEdison also plans on terminating 15 percent of their employees as they strive to survive as a going concern.

Here are more excerpts from the link about SunEdison:

"Amid a surge in debt and increasingly negative operating cash-flow, the plunge in stock (asset) price may have triggered a cross-collateral margin call of around $315 million. Furthermore,mass layoffs are on the cards as the CEO attempts to "optimize" the business".

 "the more we find the more negative we get on the sponsor company of TerraForm Power".

The citizens/rate-payers of Georgetown are entitled to know the risk to them through the City if SunEdison fails to perform up to the terms of the contract.  However, the City refuses to release the contract to its citizens and has been unwilling to identify the risks to the City as well as any mitigation strategies.