Proponents, opponents of charter amendment give sides

By Matt Ward —

For the first time in city history, an amendment to the City of Fredericksburg’s home rule charter will go before voters during the upcoming May 10 election.

Fervently opposed by City of Fredericksburg staff, current city council members and all candidates running in the election, the amendment seeks to regulate the ability of the city to transfer money from enterprise funds and require approval by voters prior to the transfer.

Voters will be asked to approve or disapprove the proposed amendment, which reads:

“Should the Home Rule Charter of the City of Fredericksburg be amended to add a separate section which states: The City of Fredericksburg shall not use proceeds or reserves from an Enterprise Fund (including but not limited to Electric, Water and Sewer, Solid Waste and Drainage funds) except for expenditures within the purpose of the fund unless approved by the voters in an election that specifies the amounts and sources from which the monies will be withdrawn.”

‘Major action’

A petition drive, led by Isabel and Larry Wertz, met with controversy last summer as one-quarter of the 440 signatures presented to the city were deemed invalid by City Secretary Shelley Britton. However, the council decided to place the item on the May 10 ballot in spite of the irregularities.

 “Normally, cities don’t go about changing charters just because some group has a particular complaint about an action taken by the city,” City Manager Kent Myers said.

Since the Home Rule Charter was adopted in 1991, no amendments to the original document have been made.

“That’s a very major action when you amend your charter,” Myers said. “There have been all sorts of concerns and complaints, I’m sure, about actions taken by the council during that 24 years, but when you amend the charter, that’s a very serious action.”

Isabel Wertz said that financial decisions made by recent city councils have driven petition supporters to bring forth the amendment.

Those financial decisions include the in-house loan of $1.9 million from the electric and solid waste departments to the golf course and the $3.2 million certificate of obligation for a family aquatic center at Lady Bird Johnson Municipal Park approved by the council that was overturned by voters in May 2011 by a 3-1 margin.

“That really is what is driving the amendment, to protect those people who don’t have a voice,” she said. “The ballot is the only way you can get the people informed.”

Effects on city operations

A fact sheet disseminated by the city to residents in utility bills — also available online at www.fbgtx.org — lists 12 considerations that could impact city finances, including the possibility of increased property taxes, lower bond ratings and loss of significant revenue in the city’s general fund.

Amendment organizers contend that government operations would not be affected as the city would still be able to utilize general fund reserves and authorize certificates of obligation without going to the ballot box.

“Probably the primary concern is that it’s going to affect the payment of in lieu of taxes,” City Manager Kent Myers said. “It’s going to affect our bonds where we pledge money from different funds and a lot of different things that I don’t think were anticipated by this group.”

Currently, the city charges its utility departments — electric, solid waste, water and sewer — an eight percent “in lieu of taxes” payment for use of city streets and right of ways.

For the current budget year, the city’s general fund receives $1,571,600, which amounts to over 15 percent of its total budget, from in lieu of taxes.

 “The only thing that I am concerned with is raising the rates on utilities and not accounting for how you’re going to spend that money when you put it in the general fund,” Wertz said.

Questioning legality

Until the amendment passes, the city is unable to request legal opinions about the constitutionality and enforceability of the proposed amendment, Myers said.

“We cannot bring any sort of legal action to request legal opinions or interpretations until we are an aggrieved party,” he said. “We think that there are a lot of questions. If this amendment passes, then staff is going to wonder, ‘Does this meet the intent of the amendment? Are we doing anything improper or illegal?”

City officials indicated that the process of seeking legal advice would likely begin at the council’s May 19 meeting should the amendment pass.

“I’m uncomfortable about making a big deal about the litigation issue because we don’t know what that means,” Mayor Jeryl Hoover said. “I don’t want anybody to go in the voting booth and say ‘Well, I’m afraid we’ll get sued if we pass this.’ I want them to go in the voting booth and say ‘We’re convinced this is a bad idea.’”

Policy change enacted

City officials argue that the concerns driving the amendment have been dealt with through recently implemented financial management policy, which requires a public hearing before approving budget amendments that involve transfers between city funds.

“The problem that they were trying to solve has been solved,” Mayor Jeryl Hoover said. “I’m unhappy with the charter amendment itself because it attacks a standard and legal practice that cities across the state do all the time. It binds city government in a way that no other Texas city has been bound.”

City officials have argued that residents concerned with financial decisions should take a more proactive approach in getting involved by attending council meetings and budget workshops.

“In an ideal world, every citizen would say ‘I need to become informed about what is going on at city council,’” Wertz said. “I don’t really feel that holding a public hearing is going to be a way to protect taxpayers from taking money out of the funds because the people who can least afford to pay the high rates are the very people who do not have time to sit through three hours of meetings.”

Mistrust

The council’s decision to lend itself $1.9 million from the electric and solid waste departments in order to renovate Lady Bird Johnson Municipal Golf Course in 2011 has become a point of emphasis for proponents of the charter amendment, following utility rate hikes last year.

“You do not use fees that people pay for essential services that they cannot live without and use them for other things other than to maintain those departments unless the people give you permission to do so,” Wertz said. “What happened after the $2 million loan? The rates went up and the rates keep going up.”

City officials have said that the rate increases have been needed for some time and have nothing to do with the in-house loan.

“It sounds like a good thing when you pitch it ‘Stop city council from dipping into savings accounts to do their own thing,’” Hoover said, adding that “it’s fair for the people to consider the elected officials now and people at City Hall to be self-serving in opposing this. It goes to, I think, the lack of trust in government officials in general these days and that has bled down to the local level.”

Amendment organizers admit that the city’s actions are legal, but want to add another level of checks and balances to the system beyond a public hearing.

“I’ve been to public meetings where they listen to you and it seems they haven’t heard you,” Wertz said. “If seven of us hadn’t gotten out with a  petition and gotten it signed that forced them to put it on the ballot where it was defeated when the people had a chance to vote, you would now not have a Town Pool and you would have an aquatic center at the park.”

The petition to overturn the family aquatic center certificate of obligation in 2011 led to the formation of a 33-member citizen’s pool committee, which helped drive bond elections for a new Town Pool and renovated Park Pool.

Looking to the future

While legal review of the amendment seems likely should it pass on May 10, city officials maintain that no action on city financial policies is necessary if the amendment fails.

“I’m unclear as to what they feel has not been addressed except trust,” Hoover said. “This charter amendment says we not only do not trust current council, but we can’t trust any future council to do what we feel is right based on our infallibility of how it ought to be done. That troubles me.”

Should the amendment fail, Wertz said petition organizers would begin the process of placing it back on the ballot within the next two years.

“What have we not done that would solve this problem that they don’t have to rely on just mistrusting the city government from now on,” Hoover said. “That’s not a good way to do business and that’s not a good way for this community to govern itself, but I understand where they are coming from. I disagree with their method.”

INFO BOX

Additional information from supporters of the charter amendment is available via email at [email protected].

Information on the city’s position on the amendment is available at www.fbgtx.org or from Myers at 997-7521.

A fiscal impact statement accompanies the election notice found on page F10 of the April 23, 2014 edition of the Fredericksburg Standard-Radio Post.

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