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Houston City Council challenges Mayor on tax collection contract

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The regular City Council meeting Wednesday June 25 included a full docket of 61 items, including the Capital Improvement Plan Budget. The CIP budget was tagged, along with all proposed amendments. Most of the other items were routine contracts, resolutions of no objection for housing projects heard the previous week. An ordinance regulating game rooms was approved item 23, and a resolution on guidelines for public-private partnerships was tagged (item 22). However, the most detailed and prolonged debate was framed on technicalities of the law on contract administration.

The issue arose in an effort to resolve a change in the way the City of Houston collects delinquent property taxes. Although the City has the power to collect delinquent taxes in the same way as other taxes, it has traditionally outsourced the collection of delinquent taxes to a private law firm. A state statute provides that a delinquent taxpayer can be held liable for attorneys fees in the collection process, but only if the matter is handled by a private firm. For many years, Houston retained only one law firm, Linebarger, Goggan, Blair & Sampson to do the collection work. Item 60)

In the interest of promoting competition and transparency, the Parker Administration, with the support of many on Council decided to use a multi-vendor approach, and eventually negotiated an agreement to retain Linebarger, but share the work with a second firm, Perdue, Brandon, Fielder, Collins & Mott and Greenberg Traurig, LLP functioning as a Joint Venture. (Item 61)

Both contracts are considered professional service contracts, so under the Houston City Charter, the Mayor can proceed with the negotiations and administer the contract without any involvement from City Council. But in the interests of transparency, Mayor Parker decided to make the policy change by regulation, so the terms of the contract were scrutinized by City Council, and presented at several prior meetings. Some Council Members objected to language in the drafts that granted the City Attorney power to reallocate the collection assignments or even terminate one of the firms. The issue was whether City Council needed to be consulted.

City Attorney Feldman argued that a review of the way the contract would be administered would violate the separation of powers under the City Charter. Council can frame the enabling regulations for a contract, but it cannot get involved with the day-to-day administration of a contract once it is signed. But several members disputed that interpretation, and eventually moved to add language to the contract to allow more Council oversight. The drafts had been signed by the law firms, but execution by the city awaited the regulation.

Attorney Feldman argued that the addition of the language was unlawful as one matter, and that the language itself caused Council to exceed its authority. Eventually, Mayor Parker offered a compromise, in which the Council reconsidered the change contract language, but amended the enabling regulation to allow for Council review of changes upon annual renewals.

At her press conference following the meeting, Mayor Parker stated that she did not believe the challenges of this meeting were the hallmark future difficulties. She made it clear that she has 18 more months as Mayor and intends to continue in moving forward with the issues facing the city. In other matters at the conference, Mayor Parker announced a program for free testing for chronic conditions, and Houston Dynamo Goalkeeper Tally Hall announced plans for Armed Forces Day for the game on July 4th.

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