A handful of taxing authorities have signed on to a resolution asking the Galveston Central Appraisal District to dump a local firm that appraises industrial properties for the county.
County Tax Assessor-Collector Cheryl Johnson and County Commissioner Ken Clark are leading the effort for the appraisal district to rescind its decision to award a $185,000 contract to Hugh L. Landrum and Associates. Johnson and Clark argue an $85 million mistake by the company on industrial values at a chemical plant and oil refinery in Texas City should cost Landrum and Associates its job.
But the company and its supporters argue the mistake was not in the appraisal of the BP Chemical plant and Marathon refinery but was caused by a delay in entering updated data. The data entry mistake meant higher property values from 2008 for those facilities were calculated into the certified tax rolls instead of the updated 2009 figures, which were significantly lower because of the souring economy and slumping oil prices.
Johnson acknowledged getting the 12 resolutions needed to rescind the contract was impossible but said the effort would send a strong message to the company and to the appraisal board that taxpayers were watching.
Budgets Revised
When the mistake was caught, some taxing authorities affected already had begun work on their 2009-10 budgets, based on the higher revenue estimates. The county, city of Texas City, the Texas City school district and the College of the Mainland were the only taxing authorities affected, Chief Appraiser Ken Wright said.
College of the Mainland in particular had to recalculate its budget. For a time, officials considered a tax rate increase to make up for the difference in lost values.
Two weeks ago, in a split vote, the central appraisal district board approved renewing the contract with Landrum and Associates. The vote followed a previous 2-2 vote by the board when one of the board members was absent from the meeting.
“The appraisals were right; they had not been updated in the system yet,” the company’s manager, Linson Landrum, said. “I didn’t communicate with our client real well.”
Board Concerned
A few days later, Landrum said his company caught the mistake during an internal audit. He said he sent a letter to Wright saying values would have to be adjusted and that’s when he discovered the tax rolls had been certified.
The mistake was caught before any of the taxing authorities affected had set their tax rates for the upcoming year. Still, each had to revamp budgets to account for less revenue, Wright said.
One of the board members who opposed Landrum regaining the contract cited the “very costly mistakes.”
“Just looking at some of the patterns of the mistakes, I was concerned,” board member Walter Syers, who joined board Chairman Gary Jones in opposing Landrum’s contract, said. “I was also concerned about some of the level of expertise.”
Syers said he wants the board to closely monitor the company’s work in the future.
Wright contended the mistakes, while embarrassing, were not costly, given that no budgets or tax rates had been set.
Counting resolutions
Board member David Moss, who along with Victor Pierson and Emery Williams voted to renew Landrum’s contract, said he was satisfied with the company’s explanation.
“I wouldn’t have voted for (the contract) if I wasn’t confident,” Moss said. “I would say there is no perfect appraiser out there.”
As of Monday, Johnson had secured resolutions opposing the decision to retain the company from the cities of Kemah, Bayou Vista and Tiki Island, as well as the Hitchcock school district. Santa Fe and La Marque city councils also were scheduled Monday to vote on their own resolutions.
It takes 12 such resolutions from voting taxing authorities that have appraisal district voting powers to force the board to reconsider the contract, and the resolutions would have to be approved by today. Even then, the board does not have to abide by the wishes of the taxing authorities, Wright said.
None of the taxing authorities that have considered or approved the resolution was affected by the mistake. The city of Texas City would not consider the resolution, Mayor Matt Doyle said. The Texas City school district, of which Moss is a school board member, also decided not to take up the issue. College of the Mainland is not a voting member of the appraisal district.
Clark didn’t propose that county commissioners consider the resolution.
