Artist: John Trumbull.
On April 3, 2025, the Richardson Charter Review Commission continued their review of the Richardson Charter, covering Articles 11 (Budget and Financial Procedures), 15 (Collection of Taxes), and 16 (Issuance and Sale of Bonds).
Still no video by the City to link you to. To paraphrase City policy: "Move along. There's nothing to see here."
Like last week, reviewing these articles of the Charter would benefit from legal training and training in accounting. I have neither. I have a college degree in Mathematics, but accounting perplexes me. As the joke goes, Math is about solving for X. Accounting is about explaining where X went...and why it wasn't your fault.
Justin Neth, who deserves some kind of award for providing public witness
and input to this process, for the first time had no public input. Still, he
was reflexively called on...
Chair: "Do we have any speaker cards tonight?"
Staffer: "Yes. Yes we have..."
Chair: "Okay. Mr. Neth?"
Justin Neth: "No, I didn't submit..."
Chair: "Okay, so sorry."
Commissioner: "Sorry, thank you for coming anyway."
Budget and Financial Procedures
The Charter requires that a public hearing on the proposed charter "shall be published in a newspaper." That's requirment comes from state law. The commission agreed to City Attorney Pete Smith's recommendation to add "...or by such means as may be allowed by state law" in case the legislature ever changes state law. The Commission agreed.
One commissioner commented on the order of events the Charter prescribes. "After public hearing, the council shall analyze the budget, making any additions or deletions which they feel appropriate, and shall, by ordinance, adopt the budget by a majority vote." The commissioner thought that maybe there should be a second public hearing on the budget *after* the Council makes additions and deletions to it. That sounds good to me. But the City Attorney said, "If somebody in the audience was there and had a question, based on the proposed changes, hopefully the mayor would recognize that person allowed to speak." That word "hopefully" is doing a lot of work there. ("Congress shall make no law abridging freedom of speech...hopefully.") A charter should spell out what's required, not just what the people are "hopeful" will happen. Nevertheless, no one challenged the City Attorney on this point.
Collection of Taxes
The City Attorney said, "So many of those provisions are governed by the tax code. And I think we went through this in 2015 pretty extensively." Of course, there's no video for the commission to review for themselves just what the 2015 commission did or didn't do.
A commissioner was curious about the growing use of PFCs (Public Financing Corporation) and HFCs (Housing Finance Corporation), which are a way to transfer ownership of property to a tax-exempt entity and lease it back, thus avoiding property taxes. "There are a thousand ways to do this" the commissioner stated and asked if there are steps the City could take to protect itself. The City Attorney said that "it's not something we can control in the Charter." And so no amendments to the Charter were proposed or agreed to.
Issuance and Sale of Bonds
One commissioner asked, "what are the limits on how much we can borrow?" A City staffer answered how the City's debt capacity is calculated. The City Attorney added, "We have a financial advisor and a bond counsel, and the finance team constantly works with those two firms to determine what capacity we have." A commissioner asked whether "there is any governing law that forces you to do this" and was told there are "Securities Exchange Commission rules that come into play, there's municipal security rule making, there are a lot of rules that we have to follow." The commissioner concluded by saying "I think we're lucky that Richardson has a good staff that can do all of this stuff."
There followed a rather long discussion of the difference between general obligation bonds and certificates of obligation and what constraints there are on how much the City can borrow with each type of bond. The answer from staff suggested that formulas that can optimize our interest expense are relied on, not rules in the Charter that mandate how much of each type of bond the City can use.
My conclusion is that a random eleven person commission is not going to have the needed expertise to analyze the Charter about these financial matters.
A commissioner was uneasy about the language in Section 16.04, misapplication of public funds, that any officer who willfully and knowingly misuses bond funds "shall be deemed guilty" of a misapplication of public funds. He, a lawyer, wondered if that language ignores the presumption of innocence underlying our legal system. Good point. Attorney Smith will consider whether there's a better way to state this that remains bold but does not sound like the Charter is making a presumption of guilt.
And with that, the Commission adjourned.
Quotes have been lightly edited for clarity and brevity.
"Budget, taxes, and
Issuance of public bonds.
Hope is not a rule."
—h/t ChatGPT
1 comment:
The refusal to record these meetings for Richardson citizens to review is unconscionable. No wonder our city government struggles with trust and transparency issues.
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