HUTTO, Texas (KXAN) — Michael J. Smith, an incumbent Hutto City Council candidate, has unpaid city taxes that could impact his eligibility to run for office. He also filed a questionable affidavit in the county record related to a state tax lien, according to records obtained by KXAN.
In addition, a state investigation into Smith’s former group home business says Smith directed his HR director to falsify personnel information, among other issues, according to a 2015 Texas Department of Aging and Disability Services report obtained by KXAN through the Texas Public Information Act.
Smith is currently mayor pro tem and a director of the Hutto Chamber of Commerce. He has served on the City Council since 2009 and is running for reelection in May against political newcomer Tim Jordan. Smith is currently a recruiter for Texas State Technical College, according to his campaign application.
According to the Williamson County tax assessor-collector records, the taxes on Smith’s former personal business property called Beyond the Limits at 104 South Farm to Market 1660 have been in arrears since 2014. The unpaid taxes from 2014, 2015 and 2016 have a combined a value of $146.
KXAN first asked Smith about the taxes Monday. On Tuesday, Smith said there was an error and he had paid the taxes.
“That was just an error on our end,” Smith said.
“That was just an error on our end,” Smith said of the personal business property taxes. “2014 would have been about the time that I was coming back to the company and just sometime during the transfer, the closing of the business, we missed those.”
Smith said, “to his knowledge,” he was unaware of the years of outstanding taxes, until KXAN mentioned them.
Smith said he closed Beyond the Limits, a day habilitation business associated with his group home company, A Step Beyond, in the summer of 2015. However, county tax records listed Beyond the Limits as having 100 percent ownership of the personal business property at the time this report was published. The taxes on the personal business property only apply to the furniture and fixtures, which have had a net value of $1,150 since 2011, tax records show.
“The problem was that we didn’t file the form with the county saying that we were no longer occupying that space,” Smith said. “We are working to get that filled out now, so for ’17 there shouldn’t be one. But we made a mistake and didn’t get that filed.”
- You can see the tax bill here
Though Smith said he paid the city taxes, they could still be an issue for his campaign. According to the city’s charter, to have “eligibility to file” a candidate must “not be in arrears in the payment of any taxes or other liabilities due the city. ‘In arrears’ is defined herein to mean that payment has not been received within ninety days from due date.”
Smith filed his application for candidacy on Jan. 19, when his city and county taxes were still in arrears, according to Williamson County and Hutto secretary records.
Larry Gaddes, Williamson County tax assessor-collector, said a property that did not pay taxes for tax year 2014 would have gone delinquent in February of 2015, and that account would have been turned over to a delinquent tax attorney by July of 2015 “to start the collection process.” Gaddes spoke broadly about tax collection, not specifically about any single case.
Buck Wood, a Texas election law attorney, said it is possible for a candidate to be removed from a ballot, if he or she is not qualified according to a city’s charter.
One major issue in contesting a candidate’s qualifications is timing, said Wood, who spoke about election law procedures generally.
In a city election, the filing deadline is often close to the election leaving little time to file a lawsuit to have a candidate removed, he said.
“In other elections, where you’ve got a lot of time between filing and the election, there’s time for the opponent to go to court and knock them off the ballot,” Wood said. “That occurs. I’ve handled numerous ones, and I’ve defended numerous ones like that.”
The plaintiff in the case would file a mandamus action in district court or the court of appeals, saying the person is ineligible, Wood said.
But, once an election process is started, which is often considered active absentee ballot voting, it is very difficult to have someone removed from a ballot.
However, Buck said, some city charters have a provision allowing City Council itself to remove a member.
Hutto’s charter does have a section allowing a vote of five council members to remove the sixth council member for a violation of city charter.
County and state records show Smith filed a questionable affidavit with the county clerk last November.
While in the process of selling his home, Smith signed an affidavit under oath stating he was not associated with three specific documents in the county clerk’s record. A KXAN review of the three documents found one of them—a state tax lien—is clearly associated with Smith and his company, Beyond the Limits.
On Nov. 7, Smith filed the affidavit stating he was not associated with the $520 Texas Workforce Commission administrative lien. At that time, Smith was in the process of selling his home, according to county records. Smith said he signed the affidavit in error, and he corrected the problem.
“It was clearly a mistake that was made, but it was caught,” Smith said. “A tax lien is paid before we see any dividends from the house. So, it is not that we sold the house and then paid off the lien.”
In addition, KXAN has obtained a state investigation report detailing issues found in Smith’s former group home business, A Step Beyond, which is associated with Beyond the Limits.
According to the reports, the company’s HR director told investigators she falsified a background check on an employee.
“Program provider HR director admitted to falsification of personnel information at the direction of the program director [Michael Smith].”
The June 2015 report also says Smith allowed his mother, Sanh Moss, to continue working directly with individuals, including handling psychotropic and controlled substance medications, despite his direct knowledge of her arrest for intoxicated driving and possession of a controlled substance and involvement in multiple [Department of Family and Protective Services] investigations.
During Moss’ arrest on Jan. 29, 2015, police found her in possession of multiple people’s medication, and she admitted to police that she had stolen medication, the report states.
The report also says Smith “directed Ms. Moss to remove medications from all three group homes on 5/18/15, the day before the review team arrived.”
The report noted, “A Step Beyond also exhibits a pattern of failure to address the significant behavioral challenges of multiple individuals living in their 3 group homes in the Hutto area,” including failure to adequately staff and train employees.
Smith declined to comment on specifics mentioned in the reports.
“That’s a private business matter. I have several issues with that report that was done, but that is in our past. We’ve moved on,” Smith said. “Any mistakes that were made we’ve dealt with the consequences from that, and we have moved on.”
The state shut down Smith’s group home businesses in 2015 and banned him from operating such a business for eight years.
Smith is running against Jordan in the race for Hutto City Council Place 4. Jordan declined to comment on the outstanding tax issues, affidavit and investigation report.
“I really can’t comment on his failed business ventures. I want to stay focused on a positive outcome for the citizens of Hutto,” Jordan said.