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AGENDA INFORMATION SHEET SUBJECT: Agenda Item No. 7, record vote on proposal to consider tax increase for calendar year 2001 for the City of Paris. BACKGROUND: The process the City of Paris must follow in approving its budget and adopting a tax levy is subject to the provisions of at least two state statutes as well as the City Charter. As you will note on the agenda for the Special Council Meeting of [DATE], there is an Item No. 7 regarding a record vote on the proposal to consider a tax increase for calendar year 2001. Because the process for adoption of the budget and the tax rate is subject to so many sometimes conflicting statutory provisions, an explanation of this particular item might clear up some confusion regarding this part of the process. Section 26.06 of the Texas Tax Code, entitled Notice, Hearing, and Vote on tax increase, sets out the notice requirements incident to the process for adopting a tax rate which exceeds the effective tax rate by three percent (3%). As part of the process of conducting a public hearing on such a tax increase, the City is obligated to place a notice of the public hearing in a local newspaper conforming with the provisions of the state statute regarding that notice. The statute even stipulates the language which must be included in the notice. The notice must identify the name of the taxing unit, notify the reading public that a public hearing on a proposal to increase the tax revenues by a stated percentage will be held on a certain date and time at a certain meeting place, and contain the language "your individual taxes may increase at a greater or lessor rate, or even decrease, depending upon the change of the taxable value of your property in relation to the change in taxable value of all other property and the tax rate that is adopted." Finally, this same provision of the Texas Tax Code requires that the notice published in the newspaper must contain "the names of all members of the governing body, showing how each voted on the proposal to consider the tax increase, or, if one or more were absent, indicating the absences." As a consequence, in order to meet the requirements of the statute in publishing the notice, the City must therefore conduct a special vote on the preliminary tax rate, based exclusively on the City Manager's original budget, so information as to who voted for or against the preliminary tax rate can be published in the notice of hearing. A mere role call vote will not suffice; the vote must be recorded by a show of hands so the names of the members of the governing body, voting for or against, or shown absent, can be carried in the actual notice itself. DESCRIPTION: Conduct a vote on a proposal to consider a tax increase to the rate required to balance the City Manager's original budget for purpose of including that information in the notice of public hearing. It is acknowledged the tax rate on which the vote is taken is merely a preliminary tax rate, and the vote is taken solely for the purposes of meeting the notice requirements, and is not binding on the City Council members as to their subsequent action on either the final budget or the final tax levy. RECOMMENDED ACTION: Consider and vote on the preliminary tax rate, such vote to be conducted by a show of hands rather than simple voice vote. SCHEDULE: The vote must be conducted at the August 20, 21, or 22, 2001, Council Meeting as one of the procedural prerequisites to going forward with the budgetary and tax levy process. PRESENTED BY: Michael E. Malone, City Manager; Larry W. Schenk, City Attorney; and Gene Anderson, Dir. of Finance COUNCIL DATE: Consider at City Council's August 20, 21, or 22, 2001, Special Meeting.