An Upton man asked a court Monday to block the City of Houston from creating a Community Improvement District (CID) that would benefit Texas County Memorial Hospital.
The Houston City Council was named in a lawsuit by George Sholtz, who opposes the district that is set for adoption tonight. The council approved the first reading of the ordinance Nov. 5.  Sholtz asked a judge to block city government’s vote and adoption of the CID. No action was taken before the meeting.
Revenue from the temporary district would generate funds for completion of a surgery center at TCMH. Sholtz most recently filed suit against the Texas County Commission seeking recovery for damaged farm equipment. A judge threw the matter out.
In the most recent petition filed, Sholtz, who operates a radio station east of Houston and often is on the council’s agenda, said the petition didn’t comply with state statutes.Â
Named in the lawsuit were members of the council and the city clerk. Sholtz alleged TCMH used a false assessment for its property, county commissioners hadn’t approved the petition, the city clerk allowed the petition to be heard when it doesn’t comply with state law and questioned the appointment of directors for the district.
The district will result in a temporary quarter-cent sales tax to collect funds. The boundaries include property owners in and around the hospital who have already approved their inclusion and four businesses that collect sales tax — Houston Walmart Supercenter, Houston Do-it Center, General Dollar and Orscheln Farm and Home.
The hospital’s board is proposing using the short-term funding mechanism to help toward the cost of replacing the 40-year-old surgical wing.Â
Under a draft plan, retailers in the CID would collect about $675,000 that would be earmarked for the surgery center project. Upon reaching the cap, the sales tax would end in an estimated five or six years.
The plan, which is used in other communities in the state, is unique in that it is usually tapped by private developers to pay for infrastructure in their own investments, which has drawn scrutiny from the state auditor’s office. In this case, the funds have a defined use at a public institution that is known before its creation, and the sales tax would end when the hospital’s new surgical wing is funded.
The hospital said it is committed to transparency in the funding, the last piece in financing the project — including the city receiving the tax money, overseeing its distribution to vendors and working with the city on the creation of an oversight board. The only other funding mechanism available to the hospital would be a county-wide property tax.