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Reagan National Advertising of Austin, Inc. D/B/A Reagan National Advertising v. City of Austin, Texas And Marc A. Ott, Being Sued in His Official Capacity
Citation: Not availableDocket: 03-15-00370-CV
Court: Court of Appeals of Texas; September 24, 2015; Texas; State Appellate Court
Original Court Document: View Document
Reagan National Advertising of Austin, Inc. is the appellant in a case against the City of Austin and Marc A. Ott, who is being sued in his official capacity. The appeal is from the 200th Judicial District Court in Travis County, Texas, under cause number D-1-GN-12-001211. B. Russell Horton from George Brothers Kincaid Horton, L.L.P. represents the appellant, with Taline Manassian also listed as trial counsel. The appellees are represented by Patricia Link Gray Laird from the City of Austin Law Department. The appellant has requested oral argument in the appeal proceedings. The document outlines various components of a legal case involving a dispute over the City’s billboard registration program and associated fees. Key sections include: 1. Identification of the parties and their counsel. 2. A comprehensive index of authorities referenced throughout the document. 3. A statement of the case and issues presented, which highlight the legal questions at stake. 4. A detailed statement of facts covering the evolution of the city's billboard registration program, fee payments by Reagan, and analyses of the program's costs by both the City and Reagan. 5. The trial court's findings and legal conclusions, particularly concerning res judicata and limitations. 6. A summary of the argument and the ensuing legal arguments addressing four main issues: - **Issue No. 1**: The trial court’s error in ruling that res judicata was inapplicable and conflicting with a federal court's findings. - **Issue No. 2**: Dispute over whether the increased billboard registration fee constitutes a permissible fee or an unconstitutional tax, detailing the lack of prior cost assessment and arbitrary fee increases. - **Issue No. 3**: Argument that Reagan's claims for fees paid in 2009 and 2010 were timely filed within the statutory period, countering the trial court's conclusion that they were time-barred. - **Issue No. 4**: If the trial court erred in not ordering a refund of excess fees paid by Reagan and in denying attorneys’ fees. The document concludes with a prayer for relief, certificates of compliance and service, and several appendices containing relevant legal documents and statutes. Remedies Code §16.064 references various appendices and legal precedents relevant to the case involving Reagan National Advertising of Austin, Inc. against the City of Austin. Key exhibits include two Austin city ordinances (No. 20080605-076 and No. 20120405-007), provisions regarding nonconforming signs, and an email from Robert Rowan. An index of authorities lists significant case law, including Barr v. Resolution Trust Corp. and Black v. City of Killeen, as well as pertinent city ordinances and rules related to civil procedures. In April 2010, Reagan initiated a federal lawsuit challenging the constitutionality of the City of Austin's billboard registration fee. The federal court dismissed the case in November 2011 due to lack of jurisdiction under the federal Tax Injunction Act. Subsequently, Reagan filed a similar suit in the Travis County District Court in April 2012. Both parties' motions for summary judgment were denied, and the case proceeded to a bench trial in December 2014. Reagan submitted additional evidence regarding attorneys’ fees following the trial. On March 31, 2015, Judge Stephen Yelenosky issued a take-nothing judgment. Reagan then filed a motion for a new trial on April 29, 2015, leading the trial court to issue and later modify Findings of Fact and Conclusions of Law, although it did not act on the new trial motion. Reagan filed a notice of appeal on June 16, 2015. Reagan requests oral argument on two legal questions not sufficiently addressed by Texas case law: first, whether a federal court's dismissal for lack of subject matter jurisdiction, which also determined a fee as a tax, can impact subsequent state proceedings; second, whether court intervention is necessary when a city increased a fee without proper analysis and continued to charge it despite internal findings that it was excessive. The appeal raises four key issues: 1) Whether the trial court erred in ruling that res judicata did not apply, conflicting with federal findings in a related case. 2) Whether the trial court correctly determined the City’s billboard registration fee was a legitimate fee rather than an unconstitutional tax. 3) Whether Reagan’s claims for fees from 2009 and 2010 were time-barred despite filing within 60 days of a prior dismissal. 4) Whether the trial court erred in not ordering a refund for excess fees paid and in denying attorneys’ fees despite the City acknowledging the fee’s excessiveness. Reagan operates in outdoor advertising, specifically managing billboards in Austin, which are regulated by the City’s Austin City Code, particularly Chapter 25-10. Prior to amendments in June 2008, the City required landowners to register billboards biennially for a fee of $220. The 2008 amendment shifted the registration responsibility to sign owners, mandating annual registration and inventory submission. The 2008 Ordinance mandated the placement of identifying markers on billboard signs to aid in verifying their height and required the City to inform billboard owners of impending registration expirations. It prohibited billboard relocation without meeting registration criteria and allowed fines of up to $500 per day for unregistered signs. The Ordinance also established an online database for billboard inventory, transitioning from individual registrations for nearly 500 landowners to bulk registrations from about eight billboard companies. Beginning in 2009, billboard owners were charged a registration fee of $200 per billboard annually, which was misconstrued as a reduction from the previous fee. The actual cost per billboard increased from $110 to $200. This fee was maintained for the years 2009-2012, before being reduced to $190 for 2013 and 2014. Reagan Billboard Company paid these fees under protest, detailing annual payments for each year from 2009 to 2014. Prior to setting the $200 fee, the City did not conduct a cost assessment for the registration program. An internal email from November 2009 indicated that the fee could be lowered to $140 while still covering costs. Subsequent analyses by city employee Robert Rowan and assistant director Daniel Cardenas suggested varying fee requirements, ultimately leading to a proposed fee of $352 per billboard, although Cardenas did not consult the Budget Office or review relevant budget documents during his analysis. Mr. Cardenas's model outlined a structure comprising 21 staff positions, such as a Performance Specialist and an Attorney Senior, and included overhead for two full-time vehicles and over 500 mailings, despite limited registration interest from billboard companies. The model accounted for the administration of billboard relocation processes, which involve distinct permit requirements and associated fees, separate from registration fees. Cardenas's revised analysis also proposed costs for developing a searchable online database for billboard registrations and included a $20,000 annual contract for violation placards that the City did not utilize. Notably, his analysis overlooked the registration fees of other Texas cities. Following litigation initiated by Reagan regarding the billboard registration fee, the City commissioned The PFM Group and Nickie Whitaker to conduct a “Billboard Registration Fee Study,” resulting in the Whitaker Report published in January 2011. This report estimated the service cost at $190, based on Mr. Boas's claim of spending two hours per sign annually. Whitaker acknowledged that a small variance in the time estimate could significantly affect the cost calculation but relied solely on estimates from two city employees without any direct verification or review of supporting documents. She did not consult with the City’s accounting department or review Mr. Rowan’s analysis, focusing instead on the City’s implementation of the ordinance rather than its requirements. Whitaker’s assumption was that the two-hour estimate would remain constant indefinitely, despite Boas stating that the time needed for registration would diminish over time. Additionally, Whitaker noted that service costs should be reassessed every four years or following significant administrative changes but did not investigate the registration fees of other cities. Reagan presented evidence at trial regarding the fees charged by Texas cities, revealing that Fort Worth charges $150 every three years, San Antonio charges between $50 to $79 annually based on sign size, and Houston charges $110.75 annually. For the trial, Reagan engaged Tom Granger from Midwikis, Granger, P.C., to provide an expert opinion on an appropriate registration fee in accordance with state statutes, reviewing various relevant documents, ordinances, and depositions related to the billboard registration program. Mr. Granger assessed the fee structure for billboard registration in Texas cities, expressing concerns over inconsistencies in the City’s analyses regarding labor allocation for code inspectors and excessive sick leave impacting productivity calculations. He critiqued Ms. Whitaker’s analysis for failing to distinguish between registration and other activities like relocation. Granger averaged data from previous analyses to propose a neutral fee of $115 per sign per year, asserting that the City’s current fee of $200 per sign per year is excessive, resulting in a total overcharge of $198,450 to Reagan. Following a bench trial, Judge Stephen Yelenosky issued a letter outlining his intended ruling but clarified that it was not formal findings. He subsequently entered a Final Judgment denying relief to Reagan. After Reagan requested further findings, Judge Yelenosky provided amended findings without altering his conclusion that Reagan’s claims for fees from 2009 and 2010 were time-barred. In a previous federal action, Judge Yeakel ruled that the City’s $200 billboard registration fee constituted a tax under the Tax Injunction Act, noting that it benefits the community rather than merely covering registration costs. The City claimed Reagan's 2009 and 2010 fee claims were barred due to limitations, but Judge Dietz denied both parties' motions for summary judgment. Ultimately, after the trial, Judge Yelenosky maintained that the limitations defense was unfounded but later concluded that Reagan's claims for those years were indeed time-barred. Reagan has pursued this case twice, first in federal court, which dismissed it for lack of jurisdiction under the Tax Injunction Act. Reagan refiled his case in state court, where the trial judge ruled the billboard registration fee was a fee, not a tax, and that Reagan’s claims for 2009 and 2010 were barred by limitations. Reagan appealed, arguing that the state court’s conclusions contradicted the federal court’s findings and lacked legal and evidential support. For a charge to be classified as a fee rather than a tax, its primary purpose must be regulatory, not revenue-generating, and it should not exceed what is necessary for regulation. Evidence showed the City significantly increased the fee from $220 every two years to $200 annually without justifying the hike. Prior to litigation, an internal assessment indicated the fee could be lowered to $140, yet the City maintained the higher fee. Subsequent analyses by City officials and an external expert yielded conflicting cost estimates for the registration program, some of which included unrelated activities. Despite the presumption of reasonableness for municipal fees, Reagan presented internal communications revealing the City acknowledged its fee was at least $60 too high. The appeal emphasizes that the trial court improperly allowed arbitrary fee increases without adequate justification and erred in ruling Reagan's claims were time-barred, as they were filed within 60 days of the federal ruling, aligning with Texas Civil Practice and Remedies Code Section 16.064. The trial judge initially found the claims timely but later adopted a conflicting legal conclusion proposed by the City. Reagan requests the appellate court to reverse the trial court's findings, declare the billboard registration fee an unconstitutional tax, reimburse the unconstitutional portion of the fee, and award attorneys' fees. Alternatively, Reagan seeks reimbursement for fees exceeding $190 for the years 2009 through 2012, along with attorneys' fees. The standard of review dictates that the appellate court evaluates factual findings based on sufficiency of the evidence while applying a de novo review to legal conclusions, allowing it to reach independent conclusions without deferring to the trial court’s judgments. The legality of a municipal fee is a legal question. Reagan asserts that the trial court erred in ruling that res judicata did not apply, contradicting a federal judge's findings from a previous trial. Reagan had previously filed for summary judgment regarding whether the federal ruling concerning the Tax Injunction Act barred this case, but the trial court denied it. The trial court concluded that the federal ruling was not res judicata for this case, which Reagan contends was incorrect. The federal judge had previously determined that the registration fee constituted a tax, leading to a dismissal for lack of jurisdiction under the Tax Injunction Act, which prevents federal court interference with state tax matters when state remedies are available. For res judicata to apply under Texas law, there must be a final judgment from a competent court, identical parties in both suits, and the second suit must involve claims that were or could have been raised in the first. While the trial court found that res judicata did not bar relitigation of Reagan's claims, Reagan disagreed with this finding. A prior dismissal for lack of subject matter jurisdiction typically does not preclude relitigation of claims; however, in this case, the federal court's determination of jurisdiction required it to assess whether the registration fee was a tax or a fee. Identical parties and claims were involved in a federal court case where the court ruled that the billboard registration fee was a tax, dismissing the case for lack of jurisdiction. Subsequently, after a trial, the federal court determined that the fee exceeded the necessary costs for regulation. The trial court expressed disagreement with this conclusion, citing differences between federal and state analyses, specifically regarding the burdens of proof. However, it acknowledged that both courts needed to assess the primary purpose of the fee—whether it was for regulation or revenue generation—based on similar legal tests. The trial court's letter suggested that the federal ruling was based on a "devoid of proof" record, but this was inaccurate as the federal court had conducted a full trial with conflicting evidence. Res judicata principles, aimed at maintaining stability in court decisions, were disregarded by the trial court, which allowed the City to re-litigate the fee's reasonableness, resulting in conflicting outcomes. Additionally, the trial court incorrectly classified the City’s billboard registration fee as a fee rather than a tax, pointing to the significant increase in the fee, lack of prior cost assessments, and dubious evaluations by the City’s expert. Under Texas law, municipalities cannot impose an occupation tax unless the state has done so, and both parties agreed on this legal standard. The Texas Constitution limits the occupation tax imposed by local entities to half of the state tax for the same business. Municipalities in Texas are prohibited from levying an occupation tax unless such a tax has been previously established by the State. The State has not imposed an occupation tax on the off-premise sign industry, meaning that the City of Houston cannot legally impose an occupation tax on this industry. If the City’s billboard registration fee is classified as an occupation tax, it would violate the Texas Constitution. The Due Process Clause applies to any illegal tax collection, necessitating that the state provide procedural safeguards against unlawful tax exactions. When taxpayers are compelled to pay a tax and can only challenge its legality post-payment, the state must offer a means for retroactive relief for any unconstitutional tax deprivation. Failure to register a sign and pay the associated fee is subject to penalties. To determine whether the fee is a legitimate regulatory fee or an unconstitutional tax, the trial court must assess whether the fee's primary purpose is regulation or revenue generation and whether it is reasonably necessary to cover regulatory costs. The classification hinges on the fee's primary intent, with regulatory fees being permissible if they are not excessive and are closely related to the costs of regulation. Municipal fees are generally presumed reasonable, placing the burden on challengers to prove otherwise. The trial court ruled that the billboard registration fee is a permissible fee, concluding there is a reasonable relationship between the fee amount and the City’s costs, and that the primary purpose of the fee is regulatory in nature. The City's billboard registration fee is deemed reasonable and constitutional, supported by several findings of fact. The registration program involves activities such as record review, inspections, and legal assistance. Ms. Whitaker's analysis calculated salary and overhead costs associated with the program, concluding that the cost per sign is $193.46 annually. The City Council confirmed its regulatory authority and the necessity of registration to enforce sign regulations, estimating costs at $190 per sign per year based on a 2011 “cost of service” study. Despite these findings, the document argues that there is no evidence supporting the fee's reasonableness. The City failed to assess its costs before increasing the fee from $220 every two years to $200 annually and acknowledged a $60 overcharge. The accounting department suggested a reduction to $140 to close a revenue-expenditure gap, indicating that even at that rate, the City would generate excess revenue. Moreover, subsequent analyses performed by the City included costs not authorized by the 2008 Ordinance, which only required specific activities related to bulk registrations and verification. The document outlines several key issues regarding the administration of a billboard registration program as mandated by the 2008 Ordinance. It notes that penalties are imposed for non-registration and necessitates the creation of an online database for billboard inventory. Mr. Cardenas, who did not consult the City’s Budget Office, incorrectly estimated the need for 21 staff positions, two vehicles, and over 500 mailings, despite the Ordinance's requirements applying only to a few billboard companies. His assumptions about costs related to the sign relocation process and enforcement were also flawed, as these are governed by separate permits and fees. The City’s expert analysis during litigation was criticized for relying on arbitrary estimates rather than the actual requirements of the 2008 Ordinance. Notably, expert Ms. Whitaker's report, which influenced a reduction in the billboard registration fee for 2013 and 2014, was deemed unreliable. Her calculations were based on unverified estimates from Mr. Boas, particularly regarding labor, which constituted a significant portion of the cost analysis. Errors in labor allocation could materially affect the overall fee, with even minor variances having substantial impacts. Furthermore, Ms. Whitaker's analysis focused on the City’s actual implementation rather than the mandated requirements of the 2008 Ordinance, failing to consult with City personnel about necessary activities. Overall, both Cardenas's and Whitaker's analyses were found to include costs and activities not required by the 2008 Ordinance, raising questions about their relevance and accuracy in determining the registration fee. Mr. Boas testified that the two-hour annual estimate for work related to the 2008 Ordinance would decrease over time due to initial verification efforts. The City’s costs for administering the billboard registration program differ from the "point in time" analysis presented in the Whitaker Report. The trial court's Additional Findings of Fact and Conclusions of Law regarding the billboard registration fee lack evidentiary support. Finding #45 is vague and does not accurately describe the registration and regulation program as implemented by the City. Finding #46 inaccurately states that Ms. Whitaker “calculated” time spent by employees, while it was based on estimates from interviews. Finding #47 fails to address the full scope of Ms. Whitaker’s methodology and limits her estimates to a specific timeframe. Finding #48 does not account for the City's ongoing costs or the limitations of the Whitaker Report as a retrospective analysis. Finding #49 inaccurately suggests the City independently determined costs based on the Whitaker Report and misrepresents prior findings by the City Council. Finding #50 lacks specificity about the ordinance and does not clarify the City Council's actions regarding the Whitaker Report. Finding #51 incorrectly asserts that the City’s activities align with the 2008 Ordinance, while they relate to the program as implemented. Finding #52 does not clarify which fee it discusses and fails to recognize that the City's analysis was based on estimates rather than actual costs. The City failed to demonstrate that its activities align with the 2008 Ordinance's program, and the legal conclusions drawn (Conclusions of Law #3, #4, and #5) lack evidentiary support. Evidence indicates that the City recognized its fee was excessively high prior to litigation. Subsequent analyses, including the Cardenas analyses and the Whitaker Report, were inadequate and primarily served as post hoc justifications for a near doubling of the billboard registration fee. The trial court's assertion that the fees were necessary to cover the City’s costs is contradicted by evidence showing no reasonable correlation. The fee is deemed unreasonable and unconstitutional as a tax. Under Texas law, while municipalities have discretion in setting fees, arbitrary increases and unjustified justifications are not permissible. In a related case, City of Houston v. Harris County Outdoor Advertising Assoc., the court found that a fee increase was excessive and unconstitutional, establishing that fees must bear a reasonable relationship to the costs of regulation. The court awarded significant damages and emphasized that intervention is warranted when fees are clearly unreasonable and oppressive, especially when revenue exceeds regulatory costs. The ruling included that the City’s argument for the reasonableness of any fee related to regulation was rejected, affirming that proper review of fee necessity is essential. In the Houston case, prior to a substantial fee increase, an accounting firm’s study revealed costs associated with permits were significantly lower than the proposed fees, illustrating misalignment between fees and actual service costs. Evidence indicated that the Sign Administration organization exhibited significant waste, mismanagement, and inefficiency, leading the trial court to conclude that the fees were primarily revenue-generating rather than necessary for litigation costs. This finding was upheld by the Houston Court of Appeals. In comparison, the City of Austin’s practices were deemed more egregious, as it nearly doubled its fees without a cost assessment or even a basic inquiry into the relevant program's implementation. The City had previously acknowledged its fee was excessively high and conducted internal reviews that included unauthorized activities in its cost assessment. The only support for the City’s fee came from a flawed expert study, based on an unsupported estimate of time spent per sign, which did not accurately reflect required activities under the ordinance. No evidence supported the trial court’s findings that the fees were reasonably related to costs or primarily regulatory, suggesting the fees were unreasonable according to the precedent set by City of Houston. The trial judge overly deferred to the City’s discretion, indicating discomfort in interfering with city regulations. He noted that the question for the court was solely the relationship of incurred costs to the fees charged, asserting that the management of a city should not be subject to judicial scrutiny under the constitutional prohibition against occupation taxes. The judge also criticized the Houston Court of Appeals for lacking clarity on how it determined the reasonable fee of $40, implying that such discretion should be exercised judiciously to avoid declaring ordinances unconstitutional. The established standard requires trial judges to evaluate the purpose and reasonableness of municipal fees and to protect constituents from unconstitutional taxation. The court is urged to intervene based on Texas law due to a city's failure to analyze fee increases, admitting internally that its fees are excessive, and justifying them with arbitrary estimates without considering relevant costs. Reagan seeks a reversal of the trial court's decision and a refund of $198,450.00, representing overcharges from 2009 to 2014, based on a calculated neutral fee of $115, or alternatively, $116,350.00 based on a recognized reasonable fee of $140. Detailed calculations of overcharges for each year from 2009 to 2014 are provided. Additionally, Reagan argues that its claims for fees from 2009 and 2010 are not time-barred, as it filed the current lawsuit within 60 days of the federal case's dismissal for lack of jurisdiction, in accordance with Section 16.064 of the Texas Civil Practice and Remedies Code. This law allows for tolling of the limitations period when a lawsuit is dismissed for jurisdictional issues if a new suit is filed within the specified timeframe. Reagan’s Federal Action was dismissed on November 30, 2011, and the state lawsuit was filed on April 25, 2012, meeting the required timeline. Judge Dietz confirmed the timeliness of the lawsuit, aligning with Texas law, which states that a dismissal judgment becomes final once all issues are resolved and the court's ability to alter the judgment has ceased. The law is interpreted liberally to protect those mistakenly bringing actions in the incorrect court. Under Rule 60 of the Federal Rules of Civil Procedure, federal courts have the authority to grant relief from a final judgment for up to a year based on specific grounds, retaining jurisdiction until an appeal is docketed. Reagan's state lawsuit was timely filed as it occurred within 60 days of the federal court losing its plenary power. The City argued that Reagan's claims related to fees from 2009 and 2010 were untimely because the suit was filed more than 60 days after the federal case was dismissed. However, the 60-day limitation under Section 16.064 of the Texas Civil Practice and Remedies Code does not commence upon the entry of judgment but rather when the federal court no longer has the power to alter its judgment, as supported by the more recent case, Oscar Renda Contracting, rather than the earlier case Ruiz, which did not consider this ongoing authority. The trial judge initially rejected the City’s limitations argument but later entered a contradictory conclusion of law. Ultimately, despite prior findings indicating that the limitations defense lacked merit, the trial court ruled that Reagan's claims for the specified fees were time-barred. Reagan requested the trial court to amend its Conclusion of Law to indicate that the claims were not time barred, but the court declined. The excerpt asserts that it was an error for the trial judge to conclude that Reagan's claims for fees from 2009 and 2010 were time barred. It further argues that the trial court failed to determine that Reagan was entitled to a refund for amounts paid exceeding $190 for four years when the City charged $200, arguing that the City’s billboard registration fee constituted an unconstitutional tax. Reagan claims entitlement to a reimbursement for the overpaid fees, totaling $15,900, calculated based on excess payments made for 2009 through 2012. The calculations provided detail the overcharges per year based on the number of signs. Additionally, Reagan seeks attorneys’ fees totaling $151,075.78 for the Federal Action and the current case, with contingencies for potential appeals. Alternatively, Reagan requests the court to declare the billboard registration fee as unconstitutional and grant a refund calculated at either $198,450 or $116,350, based on different permissible fee assessments. The prayer concludes with a request for the court to reverse the trial court's decision and grant the specified refunds and fees. On December 15, 2014, a bench trial occurred involving all parties and their counsel. The Court reviewed pleadings, arguments, witness testimonies, and evidence before issuing a Final Judgment. The Court denied the Plaintiffs' requests for declaratory judgment, injunctive relief, and damages, stating that the Plaintiff takes nothing and all other relief not explicitly granted is denied. This judgment is final and resolves all claims and parties involved. The case, filed in the District Court of Travis County, Texas, under CAUSE NO. D-1-GN-12-001211, involved Reagan National Advertising, a Delaware corporation engaged in outdoor advertising in Austin, against the City of Austin and City Manager Marc A. Ott. Jurisdiction and venue were deemed proper. Key stipulated facts include: Reagan operates billboards in Austin and has standing to sue; the City regulates off-premise signs under Chapter 25-10 of the Austin City Code, allowing such signs only as legal non-conforming uses; and the City Council passed several resolutions and ordinances concerning billboard registration fees, which have changed over the years. Prior to 2009, the registration fee was $220 every two years, which was amended to $200 annually in 2008, then reduced to $190 annually in 2012, and remains at that rate for 2013 and 2014. The Austin Code Department oversees billboard registration. The City implemented a $200 annual fee per billboard for a registration program without prior cost analysis, budget, or survey. Robert Rowan later analyzed the program's costs in a November 9, 2009 email, while Daniel Cardenas, at the request of Director Willie Rhodes, prepared additional cost analyses in Exhibits 10 and 11. Reagan made several payments for registration fees from 2010 to 2014, all under protest, based on the $200 fee initially and later adjusted to $190 per billboard. Robert Rowan's and Dan Cardenas' spreadsheets were created post the Fiscal Year 2009-2010 budget adoption. The registration program encompasses various activities such as record review, inspections, and legal assistance. Ms. Whitaker's study calculated the average employee time on the program and established that the registration fee covers all relevant salary and overhead costs, determining the City's cost was $193.46 per sign annually. On April 5, 2012, the City Council recognized its authority to regulate billboards, acknowledged enforcement challenges, and confirmed the necessity for registration to enforce non-conforming sign regulations, concluding that the cost per sign was $190. The ordinance referenced a "cost of service" study conducted in 2011. The fee imposed by the City is determined based on its actual costs for performed activities. Key legal conclusions include: Reagan's claims for fees from August 2009 and March 2010 are time-barred; Judge Yeakel's prior ruling under the Tax Injunction Act does not apply as res judicata in the current case; there exists a reasonable relationship between the fee amount and the City’s costs; the primary purpose of the fee, as authorized by the relevant ordinance, is regulatory; and the City’s fee is deemed reasonable and constitutional. The legal framework also references 28 U.S.C.A. § 1341, which prohibits federal courts from restraining state tax assessments when state courts provide a plain, speedy, and efficient remedy. Additionally, Article VIII of the Texas Constitution emphasizes the principles of equality and uniformity in taxation, stating that all property, unless exempted, must be taxed proportionately to its value. The legislature has the authority to impose taxes on intangible property and income, and it may exempt certain personal and household property from ad valorem taxation. A political subdivision's governing body is empowered to tax property that is exempt under specified laws, as long as it is not exempt from ad valorem taxation by other laws. The Texas Constitution mandates equality and uniformity in taxation, stipulating that taxes must be proportional to value. The Legislature can impose limits on the taxation of vehicles exempted under certain subdivisions. Occupational taxes levied by local governments cannot exceed half of the state-imposed tax for the same profession. The Legislature has the authority to exempt tangible personal property and mineral interests from ad valorem taxation if their taxable value is below a threshold that would cover administrative costs. It may also limit the appraised value of a residence homestead for tax purposes to the lesser of its current market value or a specified percentage of its previous year's appraisal. Such limitations take effect based on specific conditions related to property ownership and exemptions. Additionally, the Legislature can tax a property based on its value as a residence homestead, independent of its highest and best use. The document includes amendments and provisions regarding the effect of lack of jurisdiction in civil cases, stating that the statute of limitations is suspended when an action is filed in a court lacking jurisdiction, provided the action is refiled in a proper court within 60 days of the prior court's dismissal. If the adverse party demonstrates that the initial filing was made with a willful disregard for proper jurisdiction, this section is inapplicable. The ordinance amends the City Code of Austin to define and prohibit mobile billboards, citing their inherent purpose of displaying commercial advertising on public streets, which can distract drivers and pedestrians, contribute to traffic congestion, and degrade air quality in the area. The City Council found that mobile billboards create aesthetic blight and pose potential health and safety risks, justifying their prohibition to enhance public welfare and reduce emissions and traffic. The ordinance also revises definitions related to advertising and signage, including advertising searchlights, commercial flags, freestanding signs, and the maintenance of signs, while specifically defining mobile billboards as signs installed on vehicles operating in public rights-of-way for advertising purposes. Key definitions and prohibitions regarding signage are outlined in the document. 1. **Sign Definitions**: - **Non-Motorized Vehicle Sign**: Excludes signs on non-motorized vehicles (e.g., pedicabs), buses for passenger transport, taxis (if compliant with specific city code), and vehicles advertising directly related to the owner’s business. - **Multi-Tenant Center Sign**: Advertises two or more uses sharing common facilities. - **Nonconforming Sign**: Lawfully installed but not compliant with current regulations. - **Off-Premise Sign**: Advertises a business or service not located on the sign's site. - **Projecting Sign**: Extends more than 18 inches from a building facade. - **Public Right-of-Way**: Land designated for street use and utilities. - **Roof Sign**: Installed on or above a building's roof. - **Sidewalk Sign**: Located on sidewalks to advertise adjacent businesses. - **Street Banner**: Fabric sign hung over a street, maintained by the city. - **Street Right-of-Way**: Entire public street area, including roadway and pedestrian paths. - **Wall Sign**: Attached to a building or freestanding structure without walls. 2. **Prohibitions (City Code Section 25-10-102)**: - Off-premise signs are prohibited unless authorized. - Signs on vehicles or trailers primarily for display are prohibited. - Festoon signs, movable signs, tethered balloons, and signs with flashing lights are prohibited. - Mobile billboards are generally prohibited within the city's jurisdiction, with a two-year exemption for certain operators. 3. **Nonconforming Signs Regulation (City Code Section 25-10-152)**: - Alterations to nonconforming signs are restricted. Changes to the sign face are allowed, provided they do not increase the degree of nonconformity. This summary captures all critical points from the excerpt, ensuring clarity and completeness while adhering to the original content. Changes to sign regulations allow for modifications to signage methods or technologies and permit relocation of signs under certain conditions. A sign may be moved if it does not pose a hazard and is on a tract partially affected by condemnation or if the move complies with other regulations. Nonconforming signs can be modified or replaced at the same location, provided that the change reduces the sign area or height by at least 20%. Nonconforming off-premises signs may be replaced if property owners consent, the replacement sign does not direct illumination to residential zones, maintains the same height as the original, and is constructed with similar materials, with dimensions reduced by at least 25%. Relocation of nonconforming off-premises signs is allowed if specific criteria are met, including the original location being within designated areas and removal of the original sign from the tract. The new location must comply with zoning regulations, and restrictions on sign height and size do not apply to the relocated sign, although it cannot exceed 42 feet in height. A relocated sign must be permanently removed from its new location within 25 years of application approval, unless the sign owner removes another nonconforming off-premise sign during that period. The council has the authority to waive or modify requirements if they determine that such action provides aesthetic benefits to the city, considering factors such as the number of signs removed and the characteristics of the sites involved. A public hearing is required before any waiver or modification is granted, with notice provided by the director of the Watershed Protection and Development Review Department. For compliance, signs must be registered, and all fees paid. Relocated signs must also include energy-efficient lighting that meets International Dark Sky standards. The lighting must be installed within six months of relocation for signs moved prior to a specified ordinance date, or within 36 months for others. Applicants for sign relocation must be the sign owners, submit applications at least 90 days in advance, and provide documentation confirming the permanent removal of the sign from its original location. The relocation must occur within one year of application approval. Additionally, there are registration and identification requirements for off-premise signs, including annual registration with the director and provision of specific information about the sign and its ownership. Failure to register constitutes an offense, and sign relocation is prohibited if the owner is non-compliant with registration requirements. Sign owners must affix identifying markers on their signs, including registration numbers and measurement points for height verification, as mandated by the director. They are required to submit an annual inventory detailing each sign's description, location, and property ownership. Property owners will receive notification of a sign registration expiration between 90 and 30 days prior. The director must notify relevant parties about applications to repair or replace signs within 71 days of filing. A new section, 25-10-237, imposes penalties for failing to register signs, with fines up to $500 per day for each unregistered sign. Violations of specific sign regulations may incur similar fines. The City Manager is tasked with creating a public online database for sign registration information. This ordinance takes effect on June 16, 2008, and was approved by the City Council on April 5, 2012, with subsequent certification by the City Clerk. The ordinance aims to enhance regulation compliance and enforcement of billboard registration, acknowledging previous challenges faced in this area. The Council mandates on-site inspections of billboards as part of the registration program to ensure registrant information is accurate and current. The annual cost for the City to manage each sign is established at $190, based on a 2011 cost study. Consequently, the 2011-12 Fee Schedule is amended to reduce the Billboard Registration Fee from $200 to $190 for the Code Compliance Department, effective April 16, 2012. Regarding nonconforming signs, owners may maintain these signs at their current locations without modification, except for limited changes. Allowed changes include altering the sign face and making modifications that do not increase the existing nonconformity, change the message delivery method, or enhance illumination. Relocation of nonconforming signs is permitted under specific conditions, particularly if the original site is partially condemned or for compliance with regulations. Modifications or replacements that reduce the sign area or height by at least 20% are allowed. Owners can relocate off-premise signs to another tract if certain criteria are met, including removal from the original site and adherence to location restrictions concerning scenic roadways and proximity to historic districts or residential properties. A tract in a zoning district, excluding interim rural residence (RR) or commercial highway (CH) districts, is defined where permitted uses include single-family, multi-family residential, or mixed-use developments, provided at least one dwelling unit exists if developed. Additionally, a residential lot in a subdivision within the extraterritorial jurisdiction qualifies. Relocated signs must be within a commercial or industrial base zoning district, with restrictions on sign height (not exceeding 42 feet) and face size (cannot exceed the original sign's size) waived. A sign must be permanently removed from its new location within 25 years unless a nonconforming off-premise sign is removed by the owner within that timeframe. The council can waive or modify requirements if justified by aesthetic benefits, considering factors such as the number of signs removed and site characteristics, and must hold a public hearing with proper notice given by the Watershed Protection and Development Review Department. Relocation or removal of a sign requires it to be registered with all fees paid. For each relocated non-conforming sign, energy-efficient lighting must be installed according to standards set by Austin Energy, with specific deadlines based on the relocation date. Applicants must be the sign owners, file a relocation application 90 days in advance, and include a statement of agreement for removal from the landowners or an indemnification document approved by the city attorney. An applicant must relocate a nonconforming sign within one year following approval from the Watershed Protection and Development Review Department. This applies to signs damaged by accidents, natural disasters, or actions by third parties. The sign owner or land owner may repair the sign if repair costs do not exceed 60% of the cost of a new sign; otherwise, the sign must be removed. Repair permits must be applied for within 30 days post-damage, with repairs completed within 90 days of permit approval or the sign must be removed. For replacement or relocation of a nonconforming sign, if the sign is dismantled before the permit application, replacement or relocation is prohibited. The sign must be replaced or relocated within 90 days of dismantling or removed. Maintenance permits cannot be issued if maintenance costs exceed 60% of the cost of installing a new sign. The regulations also apply to off-premise signs, requiring annual registration with the director, including details about the sign and its owner. Initial registration is due by August 31, 1999, or within 180 days of the sign coming under the city's jurisdiction, accompanied by a registration fee. Non-compliance with registration rules prohibits sign relocation. Identifying markers must be placed on the sign, and an annual inventory of all signs must be submitted. The building official will notify property owners of pending expiration of sign registrations. Additionally, the director must notify relevant parties within seven days of a repair or replacement application. A review of the Billboard Registration fee indicates a current charge of $200, which may be reduced to $140 to better align revenue with program expenditures. There were discussions about implementing a renewal fee; however, it is currently deemed impractical until the registration of all billboards is completed and verified. Urgency is noted due to potential legal concerns if the process is delayed. The financial analysis shows a budgeted revenue of $0, with projected revenue at $70,000 based on the proposed fee. The total requirements for the program amount to $67,497, resulting in a projected surplus of $2,503. Additional documentation includes a detailed cost service analysis, employee payroll data, and prior studies related to the billboard registration costs, prepared by Public Financial Management Inc. The City of Austin's Law Department engaged Public Financial Management, Inc. (PFM) to conduct a cost of service study for the billboard registration fee, aiming to ascertain the total cost of administering this fee across all relevant City departments. The Law Department led the project and facilitated information gathering. The analysis involved a comprehensive examination of municipal fees and required extensive data and expertise from city staff. PFM worked collaboratively with department representatives to determine the fully loaded cost of service, which is detailed in the Cost of Service Analysis section of the report. The study found that the cost of service for the billboard registration fee is $190, while the City currently charges $200 annually. The analysis reflects the existing fee policy and estimates the average administrative time for each fee. It notes that inflation or changes in fee administration may influence future costs. PFM recommends annual inflationary adjustments to fees and suggests conducting a comprehensive cost of service analysis every four years, using inflation indices for annual fee increases. To evaluate the cost of the billboard registration fee, PFM employed a methodology that included collaboration with City staff for accurate data collection and organization. Initial steps involved confirming details such as fee title, permit issuance numbers, and relevant ordinances. Subject Matter Experts (SMEs) from various departments were identified to assist in allocating employee time to the fees through labor allocation. The predominant cost driver identified was salary costs, with PFM using a "manager's best estimate" approach to gauge the average time required for permit administration. Time allocation was calculated based on the time spent per fee, the number of permits, and the annual productive hours, which were adjusted for employee leave in line with City Human Resources guidelines. The total productive hours were calculated to be 1,735 annually, derived from a base of 2,080 hours minus holidays, personal leave, vacation, and sick leave. Direct labor costs can be calculated by analyzing the percentage of total time worked, salary data, and the annual number of permits issued. Besides direct costs, the City incurs additional overhead costs associated with service provision, which were accounted for through four overhead rates derived from departmental expenditures. The calculation utilized the 2010 City budget, the A-87 Cost Allocation Plan, and actual expenditures. Key cost factors included: 1. **Fringe Benefits** - Employee benefits, such as health and pension. 2. **Direct Costs** - Materials and supplies for the division. 3. **Internal Indirect Costs** - Administrative personnel and leadership costs. 4. **External Indirect Costs** - Central services like budget and human resources. Each overhead rate calculated the non-salary costs allocated per employee by service, leading to the determination of the fully loaded cost of service. This cost was averaged by dividing it by the total units processed over the year to compute the average cost per fee. The Department of Code Compliance manages the billboard registration permit process, which includes reviewing records, inspections, and data entry. The cost of service analysis, developed in collaboration with Subject Matter Experts, estimated the average time required per permit. Time allocations were presented in terms of average hours per permit and the total percentage of time spent on all permits, detailed by position title. For instance, the Code Inspector C spends the most time on permits (58.57%), while other roles contribute lesser percentages. The average cost per permit was calculated based on average time spent and salary data, incorporating four cost loading factors: fringe benefit costs, other direct costs, internal indirect costs, and external indirect costs. Each cost loading factor reflects additional expenses incurred by the City for providing services. The rates for various departments, including Code Compliance, Law Department, and Solid Waste Services, are specified. Direct costs for employees were aggregated to establish total direct costs for each fee, with overhead rates applied to determine departmental costs related to service delivery. The total overhead costs combined with direct labor costs yield the fully loaded cost of service. An average cost per unit (permit) was derived by dividing the fully loaded cost by the number of permits issued annually. The average cost per unit is $190. Fee recommendations are rounded based on specific thresholds: fees under $10 are rounded to the nearest $0.50, those under $25 to the nearest $1.00, fees under $100 to the nearest $5.00, and fees of $100 or more to the nearest $10.00. In July 2010, an internal analysis of the billboard registration fee was conducted, with PFM reviewing the methodology. PFM highlighted key differences impacting the cost analysis, such as whether the City accounted for internal administrative costs and external indirect costs associated with essential city services. PFM noted the City’s omission of these costs could result in an understated estimated cost per unit. Additionally, PFM identified a discrepancy in the calculation of productive hours, using 1,735 hours compared to the City’s 2,080 hours, which could lead to an overstated cost per unit.