Had a very interesting conversation with a knowledgeable person regarding Luminant, value of Luminant as of 2016, and tax base for determining the tax rate. Let's start with several assumptions. First, ignoring, for now, the lawsuit that Luminant has on appeal against Somervell County CAD, in which the lawsuit used a determination of the value of Luminant/Comanche Peak as of January 1.2015.Second, budgets are due soon from all government entities. Third, one cannot set a budget without knowing what the revenues are that are coming in.
What was the value of Comanche Peak on January 1, 2016? Consider that between January 1, 2015 and January 1, 2016, Comanche Peak had two outages. Also, during that time, the price of electricity dropped from approximately $3.35 to, roughly, $2.00. That means that there were 3 reasons why Comanche Peak would be bringing in less money during that time frame, so that as of January 2, 2016, revenues would be lower. So 2 questions: How much electricity does Comanche Peak make, and what did it sell for?
How does one figure out a budget without first knowing what revenues will be available? Example using the hospital district. I recall, in the Somervell County Hospital District meeting of 2015, when Ron Hankins wanted to set a higher tax rate, but the budget had not been in front of the Budget and Finance Committee, was only 3 pages, and didn't comply with the law. Even now, with the new board, for some reason, in violation of the bylaws, they are not having budget and finance committee meetings. I also have not, as of yet, seen a discussion of the revenues available, FROM WHICH they would be able to draw numbers about how to appropriately budget for departments. That's what you'd do, right? You have to know what your income or other funds are coming in so that you can know how you will dish it out.
Is CAD or the various governmental entities talking to Luminant to find out not only what revenues would be there and what each *penny* of the tax rate would represent? Seems to me this information should be prominent before the public so that when it comes time for the various tax hearings, the public has some idea of exactly what to expect from the largest provider of property taxes in the county.
Let's assume that Luminant, because of the outages and the fact that electricity costs versus the price one sells it for, have caused the overall value of Comanche Peak to go down. Suppose, for example, that Luminant was now worth $250 million dollars. Luminant is already in bankruptcy, but this would change the amount available FOR THIS 2016 BUDGET to be significantly less. Presumably, Luminant would be in negotiations of some point with CAD to discuss the value in order to determine the absolute tax base.If for example, it was determined that Luminant's total tax base was, this year, 1 billion dollars, then each tax penny would be $100,000. If 1.1 billion, then the penny would $110,000.
What's ridiculous to me is that some are spending time attempting to demonize Luminant on the basis of the 2015 property value and tax while apparently doing nothing tangible and public to discuss falling revenues which would affect the entities and citizens here to a huge extent. Why aren't they, especially when time is running out to vote on a budget? (Brian Watts and John Curtis made short references to the ad valorum tax and the 2016 value in the commisioners meeting on 6/27/2016)
Why does this even matter? For one thing, because it seems like, if Comanche Peak is making significantly LESS than even the amount they said in 2015, then it would be LESS money coming in for the county, and how the heck can any entity figure out a budget WITHOUT having that revenue number first? At that point, a government subdivision would have to weigh some options. ... 1. Raise taxes 2. Dip into reserves 3. Cut even more services 4. Go under or be sold to a revenue producing entity. All of us as citizens should be insisting NOW that we also are privy to any information or negotiations going on regarding the true value of Luminant, since there is an almost certain tax rate raise on the horizon. And the budgets are due, in one case in the middle of July. It's almost July.