Denton City Council struggles with appraisal district’s ‘ghost numbers’ affecting proposed budget

Denton City Council members referred to the billions of dollars of property that hasn’t yet been certified as “ghost data” and “ghost numbers” — monikers often used for hidden phone calls and text messages and for temporary phone numbers.

In the City Council’s case, ghost data relates to the certified value appraisal records that the Denton Central Appraisal District still hasn’t completed.

On June 21, the appraisal district notified Denton along with 59 other taxing entities that it would be sending a certified estimate that includes “ghost numbers” from 11% of properties in Denton that are still under protest review. That’s up from the 6% that were under review this time last year during budget season.

“The Denton Central Appraisal District’s staff and the Denton County Appraisal Review Board diligently and tirelessly worked towards that 95% certified goal,” DCAD spokesperson Emer Sanabria wrote in the June 21 letter. “Although we did not reach the intended target, we did reach 90.14% (estimated until July 25), so we will be sending out an estimate of the taxable value.”

This high percentage of protests still lingering “creates uncertainty in total assessed values and revenues,” according to the city manager’s proposed budget for fiscal year 2022-23.

It also created uncertainty at the City Council work session Tuesday afternoon and at the council meeting in the evening. The council voted 7-0 Tuesday evening to set a Sept. 20 public hearing on the budget and tax rate. The council is scheduled to vote on the budget and tax rate on Sept. 27.

The proposed tax rate is 56 cents per $100 of taxable valuation, but it could go as high as 57.5 cents per $100 of taxable valuation if council members decide they want to fund something else between now and the final adoption of the budget.

“This discussion on ghost data, that is the problem,” said council member Chris Watts, the city’s former mayor.

The problem is, according to city staff, DCAD is estimated to reach that 95% certified goal Sept. 15, a week after DCAD’s targeted Sept. 8 completion date, as mentioned in the June 21 letter. It’s also five days before the public hearing, which city staff said doesn’t give them much time to adjust the proposed budget.

“It’s not fair to us, and it is not fair to our citizens,” Watts said.

According to the 2022-23 proposed budget, the total revised proposed tax rate at this point is 56 cents per $100 of taxable valuation, a half cent decrease from last year’s tax rate of 56.5 cents. This amount breaks down to 35 cents per $100 of taxable valuation for operation and maintenance expenses and 20 cents for the city’s debt.

While they’re decreasing the tax rate, the average residential property owner will see a $165 increase in their city property taxes, according to the 2022-23 proposed budget presentation.

The proposed budget includes positions for 81 new employees — 25 of them in public safety and 24 in utilities.

Two budget scenarios were offered: one at 75% of protest values upheld, which offers a total assessed value of $16.9 billion assessed value, and another at 85% of protest values, which yields $17.1 billion assessed value. According to the proposed budget presentation, in fiscal year 2020-21, protest values were held at 75%.

The 2022-23 proposed budget presented to council is based on 80% of the $1.8 billion still under review at DCAD returning to the total certified value which, since July 25, 2021, has increased 19% to $2.7 billion.

According to the budget presentation, this offers $16.99 billion in assessed value for the proposed 56 cent tax rate.

“We are raising taxes — even though we are decreasing the rate — to continue offering the level of services that we offer now,” council member Jesse Davis said at the work session Tuesday afternoon. “We are talking about public safety and the way it should be funded.”

It’s difficult to set a tax rate when more than a billion still hasn’t been resolved, Watts said.

At the Tuesday afternoon work session, City Manager Sara Hensley asked whether they should still meet on Sept. 13 to discuss the budget since DCAD wouldn’t have the numbers until Sept. 15. Davis said they probably wouldn’t get the information until the eve of the Sept. 20 public hearing.

Watts and other council members seemed to settle on the fact that they wouldn’t be discussing a proposed budget with the 95% certified results until the Sept. 20 public hearing.

“Whatever is happening over there [at DCAD], this is not acceptable,” Watts said. “… Everybody is going through this.”

It is why, as of Monday, at least eight entities out of the 60 had voted to disapprove DCAD’s nearly $3 million budget increase for 18 new employees and released letters critical of the appraisal district’s leadership.

Denton County Judge Andy Eads has publicly stated that DCAD couldn’t be trusted and claimed that Chief Appraiser Hope McClure, who’s pointed the finger at increased growth and staffing issues, was playing the blame and excuse game.

“We are all facing staffing challenges, and we continue to do what is needed to meet the requirement,” Eads said earlier this month. “When we face challenges, we have an opportunity to provide leadership, and sadly, leadership is lacking at the Denton Central Appraisal District.”

McClure was seeking a nearly 18% increase for the district’s fiscal 2022-23 budget, which requires the 60 entities like the city of Denton and Lewisville ISD to increase their funding contributions to DCAD’s budget.

“Our primary concern is not the approximately $500,000 increase in the Lewisville ISD portion of the DCAD budget,” Lewisville ISD representatives wrote in an Aug. 8 letter to DCAD Board of Directors. “Rather, we write this letter to explain our much greater concern regarding the lack of competent leadership within DCAD that we believe is necessary to ensure that these additional funds are spent appropriately and actually produce the desired result — fulfillment of DCAD’s obligations to the taxing entities. “Specifically, the actions and behavior of Chief Appraiser Hope McClure have caused significant erosion of trust in the ability of DCAD to function effectively, regardless of how much money or how many new employees are committed to the cause.”

Other items of interestSeveral proclamations were issued at Tuesday night’s council meeting, including National Texas Overdose Awareness Day on Aug. 31 and National Seniors Centers Month and Suicide Prevention Month in September.

For National Texas Overdose Awareness Day, a mother, a wife and a son who lost a loved one to an overdose shared that an event will take place at 6:30 p.m. Aug. 31 at the Courthouse on the Square lawn, with 45 resource providers available. There will be a memorial for those who have died and support for those who are struggling.