Appraisal challenge is rare
Single family properties targeted in opening round
BY PHIL REYNOLDS SOUTH JETTY REPORTER

A move taken by city council members to challenge Port Aransas tax appraisals may not be unique, but it's so unusual that the State Comptroller's Office doesn't know when the latest one was.

The council voted unanimously on Thursday, June 14, to file what's called a "classification challenge" with the Nueces County Appraisal Review Board (ARB). The challenge affects only single family homes in the city; other properties such as businesses, condominiums and mobile homes are not affected.

The challenge triggers a process that will lead to a hearing before the ARB, a board appointed by Nueces County Appraisal District directors to hear taxpayer protests.

However, unlike individual protests, the classification challenge includes every property in the city classed as a "single family dwelling." Classification challenges can only be filed by taxing entities such as the City of Port Aransas, Port Aransas ISD or Nueces County Water Control and Improvement District 4.

The unusual move was triggered by a citywide rise in property values from 2006 to 2007. Assistant City Manager and Finance Officer Judy Lyle said last year's net taxable value for Port Aransas was $1,024,277,558; this year, that went up to $1.190 billion, an increase of 16.18 percent.

Council members contend that property sales here over the past year have been slow, and those sales don't provide enough data for the appraisal district to justify the increase in property values.

Thursday, the council also voted to hire the Austin tax law firm of Popp, Gray and Hutcheson to represent the city. That will cost between $10,000 and $15,000, said City Manager Michael Kovacs, but "it's an effort to save taxpayers much more than that."

Councilman Keith McMullin said he was part of the conference call earlier Thursday between Kovacs and the law firm, and he commended the city staff for taking the initiative.

"It's apparent we have the A-Team on our side in this matter," McMullin said, referring both to staff efforts and the law firm's record in working for tax protesters.

The Appraisal Review Board manual says, "A taxing unit may challenge the appraisal records when it believes the appraisal district has treated a group of properties unequally. The group must be either in a property category- such as properties with similar characteristics or uses- or in a particular territory within the district- such as a neighborhood or definable area."

City Attorney Mike Morris said if the ARB finds in the city's favor, one of the things it can do is direct the appraisal district to re-appraise properties here. While in theory that could also result in even higher property values, Morris called such a move "a clear message to the district."

He said, "I don't think (the ARB) has ever had (a classification challenge)," and Kovacs added, "Around the state, this may be the only one that's been done recently."

Council members were vocal in urging individual residents to also protest their tax bills, saying the council action doesn't take the place of a property owner's protest.

"We're just the city council; you're the people," Councilman Charles Bujan said.

Speakers at the council meeting begged the council not to ignore residents of condominiums and manufactured housing, which don't fall under the "single family" classification.

"We focused from the outset primarily on single family dwellings because that's where we see most of the (increase in) appraisals, and because that's where most of our residents are," Kovacs explained.

"That's not to say there's not a problem (with condominium appraisals), because there is," McMullin added, "but to have included that would have - for lack of a better expression - muddied the waters and put at risk our primary objective of winning in the one classification."

City Engineer Jim Urban commended the council for "stepping up for the citizens," but also pointed out that as a business owner, his property values had gone up 120 percent last year and 100 percent this year.

"A business is different from a home," Urban said. "You've got to live in a home, but for a business, at some point it just doesn't make (economic) sense."

"At this point we were just trying to get our foot in the door and make a little forward progress," Mayor Claude Brown said. "Next year, it might be a little easier."

The tax code doesn't make it clear how long the Appraisal Review Board has to schedule a hearing. However, the ARB must notify the city in writing at least 10 days before the date of the hearing.

Appraisal Review Board hearings are open to the public.

The council fired a shot across the appraisal district's bow on Monday, June 4, when Brown called a special council meeting during the district's budget and public hearing in downtown Corpus Christi.

Brown and four council members complained to the board at the time that Port Aransas is being singled out for property value increases, with Brown calling the property hikes "nothing more than organized crime."