TEA'S FOUNDATION BACKS PERDUE'S CLAIMS LINEBARGER COULD HAVE COST BISD $3 MILLION; BOARD TO VOTE ON DELINQUENT RFQS BY TAX FIRMS AT MEETING TUESDAY

 By Juan Montoya

The last time that the board of the Brownsville Independent School District addressed the multi-million delinquent tax contract, they heard Linebarger Goggan Blair & Sampson, LLP representative John Guevara downplaying the district's possible loss of an estimated $2.4 million due to the firm's failure to file taxable value audits with the Texas State Comptroller for the years 2011-2014.

Now Texas Education Agency partial results of four years may place the total nearer to $3 million.

The BISD superintendent then – Dr. Sylvia Hatton  – was alerted by Linebarger competitor Perdue, Brandon, Fielder, Collins and Mott LLP in 2019 to the failure of Linebarger to file the taxable value audits in May 2020. They estimated that the BISD could lose some $2.4 million as a result.

In a nutshell, when the FY taxable values are audited years later, any miscalculation that results in the loss of taxable value revenues are made up by the Texas Education Agency's Foundation School Program.

Guevara at first denied the failure of his firm to perform the audits

Perdue representatives warned that unless the district timely filed a taxable value audit with the Texas Comptroller's Office, it stood to lose millions in funds from the state for the years 2015. The deadline to recoup the funds was June 2019. When Perdue's reps visited with Hatton and other BISD officials, they were told that the BISD had already hired Linebarger to perform the audits which at first they had asserted had been done. 

The board was considering RFQs for the 2020 collection services. The delinquent tax contract is no small potatoes. It is estimated to have earned Linebarger some $800,000 a year for the last five years for a total of some $4 million during that time.

But what is the truth? Were Perdue's claims simply the result of the tough competition between firms for the lucrative contract? Or did Linebarger fail to do it's due diligence putting the funds in peril? 

We looked at Texas Education Agency's Foundation School Program files online and found that Perdue's reps were right and the objections by Linebarger's Guevera were misleading, if not outright lies. After Linebarger went back and filed the taxable value ledgers, the Foundation published it was crediting BISD with the funds. 

For the 2015 FY, the Foundation clearly backs Perdue's assertions that if not for their alert, the district would have lost $826,015 just for that year.    https://tealprod.tea.state.tx.us/fsp/Payments/Ledger.aspx?district=031901&year=2017&ledger=1&data=1  (see line item at bottom of ledger “Foundation Payment: Property Value Audit”) 

And the 2016 tax year audit (impacts 2017-18 school year funding) found that the Foundation credited BISD with $715,755. : https://tealprod.tea.state.tx.us/fsp/Payments/Ledger.aspx?district=031901&year=2018&ledger=1&data=1 (see line item at bottom of ledger “Foundation Payment: Property Value Audit”).

There are two more FY taxable value audits to be done (2017-18 and 2018-19). If they are anything like the first two years, which totaled $1,551,770, it might be closer to a potential loss of more than $3 million. 

The BISD board board in 2120 tied 3-3 in a vote. They were:

Yes: Drue Brown, Prisci Roca-Tipton and Minerva Pena

(Brown made the motion and Roca-Tipton provided the second.)

Nay: Phil Cowen, Laura Reyes-Perez and Eddie Garcia

That tied vote meant that Linebarger – who held the contract – has been working on a month-to-month basis because no one was chosen to get the contract. But now, with Cowen and Perez-Reyes gone from the board, will the pro-Perdue faction on the board garner the fourth vote?

If we assume that the sitting board members from the old board Brown, Tipton and Peña, will stick with Perdue, then they need only one vote from the trio of new board members – Jessica Gonzalez, Danielle Valdez-Lopez and Denise Garza – to tip the balance toward Perdue.

One board member who will not change her vote is Peña, whose opponent Marisa F. Leal, was supported by Linebarger campaign contributions and whose local attorney on retainer, former Cameron County Judge Gilbert Hinojosa, is representing Leal in her challenge to Peña's seat claiming the number of alleged illegal votes did not yield true results and should be rejected and another election called.    

For years – and because of the political influence that Linebarger Goggan Blair & Sampson, LLP  can wield through political donations to politicians – that firm has been employed by the BISD and other local governmental entities for its delinquent tax collections. 

When Linebarger's Guevara was first asked point blank whether the firm had performed taxable value audits for the previous years, he told them it had. Only when the district was shown Comptroller's Office reports on its website that no audits from the BISD had been filed by the firm for those years did he own up to it. That horse had left the barn long ago and there's was no recouping the lost money.

Will the board reward Linebarger for their ineptitude and risk losing the money? Or will it finally break away from the firm because a competitor pointed out its lack of diligence that have lost the BISD millions?