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2023-060 DCAD Board Nominations September 1,2023 Report No. 2023-060 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Seeking Nominations for DCAD Board of Directors EXECUTIVE SUMMARY: The Denton Central Appraisal District(DCAD)has notified the City that the term for members on the current DCAD Board of Directors expires on December 31,2023. Therefore,DCAD is seeking nominations from the 61 taxing jurisdictions in the district. The City Council can make up to five nominations for the Board of Directors. The City Council is scheduled to vote on nominations on September 26, 2023. The purpose of this informal staff report is to notify you of the process and seek nominations in advance so that you can give adequate consideration before the Council vote. Once nominations from all taxing jurisdictions are received by DCAD, a ballot will be sent to the City. The City Council will then cast their vote to elect Board members at the December 5, 2023 City Council meeting. During the second special session of the 88th Legislature, the passing of Senate Bill 2 changed the terms and composition of the board. The DCAD Board of Directors will increase from a 5-member board to a 9-member board. The new board composition will include 5 members appointed by the taxing jurisdictions, the Tax Assessor/Collector now serving as a voting member, and 3 publicly elected members. There were no changes made to the nomination and appointment process for taxing jurisdictions.Board members will now serve staggered 4-year terms,instead of 2-year terms for all. The selection process for the Board of Directors is set forth in Section 6.03 of the Property Tax Code. This process is not an"election"governed by the Texas Election Code. It is an independent procedure unique to the property tax system. An appraisal district director must reside in the appraisal district for at least two(2)years immediately preceding the date the member takes office. Most residents are eligible to serve as a director. An individual who is serving on the governing body of a city, county, or school district is eligible to serve as an appraisal district's director. An employee of a taxing unit served by the appraisal district is not eligible to serve as a director. However,if the employee is an elected official,he or she is eligible to serve. Additionally,a person may not serve as a board member if closely related to anyone in the appraisal district if related to anyone who represents owners in the district, or if the person has an interest in a business that contracts with the district or taxing jurisdiction. The number of votes a taxing unit has is determined by their proportional share of the total levy in the district from the prior tax year. There is a total of 5,000 votes throughout the district. The five candidates who receive the largest cumulative vote totals are appointed to the board. On October September 1,2023 Report No. 2023-060 12, 2021, the City Council voted to nominate Howard Martin and Bryan Webb. However, after receiving a nomination Bryan Webb indicated he did not want to be reappointed to the board. In December 2021, the City of Denton cast 85 votes for Howard Martin and 85 votes for Ann Pomykal to serve on the board. The current Board of Directors is as follows: Name Title Roy Atwood Chairman Charles Stafford Vice Chairman Ann Pomykal Secretary David Terre Member Alex Buck Member Michelle French Ex Officio Member* *Position changing to a voting member in 2024 DISCUSSION: To date, the City has not received the number of votes allocated for the year. Last year the City was allocated 170 votes, DISD had 654 votes and Denton County had 567 votes of the 5,000 total votes for the district. City Council may elect to cast all of Denton's votes for one candidate or votes among multiple candidates. The following is a summarization of DCAD's nomination & approval process. Prior to October 1st - DCAD notifies taxing entities of the number of votes they are entitled to cast for appointing board members. Prior to October 15th - Nominations are submitted to DCAD by each jurisdiction. Each jurisdiction can nominate up to five candidates. Prior to October 30th - DCAD compiles a comprehensive list of the nominees and forwards to each taxing unit in the form of a ballot. Prior to December 15th - The taxing jurisdictions choose by written resolution the candidate (s) of their choice. The jurisdiction then submits the name (s) and the votes cast to DCAD. Prior to December 31st - DCAD tabulates the votes and forwards the results back to the jurisdictions. The five candidates that receive the most votes become the Board of Directors as of January 1 st. Please send nominations to the City Secretary's Office by Friday, September 15, 2023. Nominations will be compiled and prepared for City Council discussion and vote on Tuesday, September 26, 2023. September 1,2023 Report No. 2023-060 ATTACHMENTS: 1. DCAD email 2. Application STAFF CONTACT: Cassey Ogden, Assistant City Manager/CFO (940) 349-7195 Cassandra.Ogden(kcityofdenton.com REQUESTOR: Staff Initiated PARTICIPATING DEPARTMENTS: Finance STAFF TIME TO COMPLETE REPORT: The estimated amount of cumulative staff time to complete the report is 1 hour. Benavides, Monica From: Misty Baptiste <misty.baptiste@dentoncad.com> Sent: Monday, August 21, 2023 9:15 AM Subject: Appointment and Election of the Board of Directors for the Denton Central Appraisal District This message has originated from an External Source. Please be cautious regarding links and attachments. Taxing Entities of Denton County: This communication is to inform you on the timeline for the Appointment and Election of the Board of Directors for the Denton Central Appraisal District (DCAD). The Texas Property Tax Code outlines this process in section 6.03. As I am sure you are aware, during the 2nd special session of the 88th Legislature, SB2 passed and was signed by Governor Abbott. In this bill, there were a few changes to the composition of the board and the term limits established for each member of the board. The DCAD Board of Directors is increasing from a 5 member board with the Tax Assessor/Collector as an ex officio member to a 9 member board, which will be made up of the 5 members appointed by the taxing entities, the Tax Assessor/Collector, and 3 publicly elected members. It is our interpretation of the new law that the Tax Assessor/Collector will now be a voting member of our board in order to avoid a tie in votes. There are no changes to the nomination and appointment process for the taxing entities; however, all board members will now serve staggered 4-year terms, instead of 2-year terms for all. This year, you will all appoint 5 members to serve a term of 1 year ending on December 31 , 2024. Next fall, we will have another round of nominations and appointments for all 5 members to begin a new term on January 1 , 2025. For that term, 2 directors will be appointed to serve a 1-year term and 3 directors will be appointed to serve 3-year terms. This will be done by random draw. Thereafter, all elected directors will serve 4-year terms. I will assign each member a "place" on the board of 1 through 8 so that moving forward staggering places will be easily identified and tied to a specific seat. This will be done at random draw as well. The 3 members that are publicly elected in the May 2024 election, will take office on July 1 , 2024 and serve a term that expires on December 31 , 2026. That said, there will be a new election for those 3 places on the board in the November 2026 election and those elected will take office January 1 , 2027. These three elected members will draw as well to determine which director will serve a 2- year term and the other 2 directors will serve a 4-year term. 1 These provisions take effect only if the constitutional amendment proposed by H.J.R 2 is approved by the voters this November. I think we are all fairly confident this bill will pass, considering it also contains property tax relief by increasing the ISD homestead exemption and providing a 20% cap limitation on appraised value of non-residential homestead real property. Please see the timeline below for the nomination, voting and appointment process. ACTION BY CHIEF APPRAISER: Allocation of votes is to be done before October 1st. We will calculate the number of votes for each entity and send out that allocation by email to the county, cities and school districts. Tax Code 6.03 (e) There are 5,000 total votes to be distributed based on tax levy, and each taxing entity's vote allocation is based on their tax levy compared to the grand total levy for all taxing entities for the previous year. Example: If a taxing entity's tax levy is calculated to be 5% of the grand total levy for all taxing entities, the taxing entity would be allocated 250 votes. ACTION BY ENTITY: Nomination of candidates is to be done before October 15th. Since October 14th is a Saturday, the deadline will shift to the next business day, October 16th. This must be done by submitting a nominating resolution to us no later than the end of the business day on the 16th. Each entity that is entitled to vote may nominate up to one candidate for each position to be filled on the Board of Directors. All five of the board positions are included in this appointment, therefore each taxing entity can nominate a maximum of five candidates. Tax Code 6.03 (g) The Resolution must include the name and address of each candidate nominated. To be eligible to serve on the board, an individual must be a resident of the district (Denton County) and must have resided in the district for at least two years immediately preceding the date they take office. Remember that this is the nominations part of the process and the written resolution associated with this phase of the election should only include nominations of candidates. ACTION BY CHIEF APPRAISER: Delivery of ballots is to be done before October 30th. Since October 29th is a Sunday, the deadline will shift to the next business day, October 30th. I will do my best to prepare and deliver a ballot listing the candidates whose names were timely submitted to each entity as soon as possible (my goal will be the week of October 23rd). The ballot will list each candidate, alphabetically sorted by surname. Tax Code 6.03 (j) 2 ACTION BY ENTITY: Entities cast their votes before December 15th. To be clear, the deadline is for voting resolutions to be received by the chief appraiser by the end-of-day December 14th. This must be done by resolution. If a ballot is returned marked, it must be accompanied by a resolution adopted in a public meeting. Tax Code 6.03 (g), 6.03 (k and k-1 effective 1-1-2022) Please remember that taxing entities with 5% or more of the total votes MUST determine its votes by resolution adopted at the FIRST or SECOND OPEN meeting of the governing body held after the chief appraiser delivers the ballot, and the resolution must be submitted to the chief appraiser no later than the THIRD day following the date the resolution was adopted. This applies to taxing entities with 250 or more votes. ACTION BY CHIEF APPRAISER: Director appointment results will be sent out before December 31 st. We will count the votes and declare the five candidates who received the largest cumulative vote totals to begin serving a new term beginning January 1 , 2024. Tax Code 6.03 (k) Thank you all so much for your continued support! If you have any questions let me know. Best Regards, Don Spencer, RPA Chief Appraiser Denton Central Appraisal District don.spencer@dentoncad.com (940)349-3978 0 CONFIDENTIALITY NOTICE: This email may contain confidential information and/or attorney client privileged transmission et seq., and any information contained in this message is legally privileged, confidential and intended only 3 for the individual or entity named herein. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this message is strictly prohibited. If you have received this message in error, please immediately notify our firm and purge all copies of this message from your system. 4 Nominee Information Denton Central Appraisal District Board of Directors Name Address City Zip Daytime Phone Evening Phone 1. Are you a resident of Denton County and have you resided in Denton County for at least two years immediately preceding January 1, 2022? Yes No 2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? Yes No List below work or personal experiences that would be applicable to proposed service on the DCAD Board of Directors. Feel free to attach additional information if needed. All information submitted will be subject to the Open Records Act.