COMMISSION WHEELS AND DEALS WITH FUTURE COUNTY TAXES

By Juan Montoya
Few people noticed what happened last Tuesday during the Cameron County Commissioners Court meeting when they approved an action item to "approve the creation of a countywide transportation reinvestment zone."
Cameron County Regional Mobility Authority financial officer Ardian Rincones presented the idea and it was obvious that the majority of the commissioners understood the enormity of the concept.
Under prodding from Pct. 2 commissioner Alex Dominguez, Rincones admitted that the CCRMA would be the recipient of a percentage of incremental property taxes countywide (between 10 to 25 percent) using the 2015 ad valorm tax reciepts as a benchmark.
In other words, Dominguez prodded Rincones, the CCRMA would get that percentage for the next 30 to 50 years after 2015.
"That's right, commissioner," Rincones replied.
Although it was obvious that neither Pct. 3 or Pct. 4 commissioners David Garza or Dan Sanchez fully understood the concept, both were vocal proponents of the establishment of the TRZ. They argued that the additional money to the TRZ would be used to "leverage" state and federal funds.
"I understand your concerns commissioner," Garza soothed Dominguez, "but this will provide funds for the future growth of the county."
County Judge Pete Sepulveda, who is not running for reelection after he finishes the term at the end of 2016, pushed for the establishment of the countywide zone saying that during his tenure as county administrator, CCRMA CEO and county judge, the county has "leveraged" its funds and garnered half a billion dollars in state and federal funds.
He said that the CCRMA could not issue bonds based on the incremental property taxes collected five existing limited TRZs . Extending the TRZ to cover the entire county would allow them to issue the bonds necessary to address transportation projects, he siad.
Even though Sepulveda – as direct beneficiary of the TRZ – abstained from voting on the motion to move along the process, he was not shy about promoting its adoption.

The county's residents already pay the CCRMA. The CCRMA is funded by tagging on an additional $10 fee from every car registration paid to Cameron County.
For Fiscal Year 2014 the county paid $2,921,980 out to CCRMA on vehicle registration fees. For Fiscal Year 2015 year to date Oct. 2014 thru July 2015, the county has paid CCRMA $2,466,770.

The CCRMA projects that it will raise $1,652,954,462 from five Transportation Reinvestment Zones in Cameron County (That's $1 billion.) The CCRMA is allowed to take a percentage of any incremental property values from land along their transportation improvement projects such as the toll road to the Port of Brownsville.

Now, with the entire county tax base at their command, this figure will probably be dwarfed in that time.
The Governor and the Commissioners Courts of county governments in any of the eight RMAs appoint directors for the agency. Directors of RMAs serve two-year terms and answer only to the politicians who appoint them.
The powers granted to the CCRMA under state law are extensive. Compared with TxDOT, RMAs have a virtual carte blanche on a number of important powers relating to transportation projects and facilities. In fact, the CCRMA is even able to build, own, and operate utilities. With tolling authority, bonding authority, building authority, and practically no voter accountability, the CCRMA is an ideal vehicle for a taxpayer funded, special interest feeding frenzy.

Although legal counsel has told us in the past that his $230,000 salary is paid by the CCRMA and not from the county, the salary schedule for the county judge's office shows that Sepulveda receives $64,062 which includes a supplement of 5,400 from another county fund.:Sepulveda, according to the county's legal counsel, has chosen not to accept the additional $64,062.
As incongruous as this set up might seem to the casual observer, the consequences of the setting up of the reinvestment zone are even more dubious.
According to the Texas Dept, of Transportation, "The local governing body designates a zone in which it will promote a transportation project. Once the zone is created, a base year is established and the incremental increase in property tax revenue collected inside the zone is used to finance a project in the zone."

If 2015 is set as the base year, then that percentage of any any additional taxes in the appraisal values of properties or any new industries coming to the county (read multi-billion LNG terminals) would revert to the CCRMA coffers.
The next step for the commissioners to adopt the TRZ will be public hearings. where supporters or opponents of the concept can air their views. The CCRMA is moving fast and they want to hold the hearing sometime before the end of November, that is, within the next two weekd.

Under the Transportation Code, "Not later than the 30th day before the date the commissioners court proposes to designate an area as a transportation reinvestment zone under this section, the commissioners court must hold a public hearing on the creation of the zone, its benefits to the county and to property in the proposed zone, and the possible abatement of ad valorem taxes or the grant of other relief from ad valorem taxes imposed by the county on real property located in the zone.
"At the hearing an interested person may speak for or against the designation of the zone, its boundaries, or the possible abatement of or the relief from county taxes on real property in the zone. Not later than the seventh day before the date of the hearing, notice of the hearing and the intent to create a zone must be published in a newspaper having general circulation in the county.
"My problem with it is delegating, say 15 to 20 percent of what would normally be the county's general revenue to a non-voting entity," Dominguez said.
Pct. 4 commissioner Dan Sanchez had no problem with that because he said that the commissioners appointed the CCRMA board members. At least two, Horacio Barrera and Ruben Gallegos Jr. are from the Brownsville area.
Barrera is an attorney and law firm partner with Brownsville Mayor Tony Martinez. He is the one who negotiated the purchase of the $2.3 million Casa del Nylon by the city from Abraham Galonsky in downtown Brownsville.
Gallegos is the son of Ruben Gallegos Sr., the founder of International Educational Services. IES is an outfit that provides boarding and educational assistance to unaccompanied illegal minors before they are sent north to the homes of relatives in other parts of the United States. In Judge Andrew Hanen's assessment, the government's payment to achieve this makes them no different than the coyotes who got them across the river in the first place.
These are the people that Sanchez says he trusts to take care of the hen house.
Garza and Sanchez were vociferous in their support of the idea.
Throughout the hearing, Pct. 1 commissioner Sofia Benavides did not offer an opinion on the issue. However, she and Dominguez were in for a nasty surprise in the very next agenda item placed by County Administrator David Garcia.
Garcia's agenda item, totaling $800,000, asked for the court to approve monies from the General Fund and the county;s lateral fund to use on San Jose Road from Sam Houston Road to Oscar Williams Road and from there to FM 509, in Garza's precinct 3.
When Dominguez and Benavides expressed surprise at the existence of the $800,000 in the lateral road fund, Garcia feigned surprise nand said he didn't know about it either until recently.
"I just found out about it last week," he said.
This didn't sit well with Dominguez or Beanvides, although they voted to transfer the funds for Garza's precinct 3 road project.
Is that why Garza was so vocal about backing the proposal to help out Sepulveda's TRZ?
But not to worry. Garcia knows show to sugar coat bad surprises.
The special meeting agenda to be held 9 a..m. this Thursday originally had one discussion and action item concerning the canvassing of the Nov. 3 state proposition election results. It was posted Nov. 6.
The addendum to the special meeting was posted Nov. 9 and contains a supplemental agenda item which authorizes county administrator Garcia to provide and additional Public Works road crew to move along the construction of Pct. 1 road projects approved at the last meeting.
With Benavides' reelection scheduled for March 1, it wouldn't be a bad bad trade-off for her vote on the TRZ.