Mayor settles controversial tie vote on tax rate
The Stephenville City Council met in a special session Tuesday night and while there were other important items addressed, the first item on the agenda, the property tax rate for 2016 was a contentious one. Ultimately it resulted in a four-to-four tie vote that was decided by Mayor Kenny Weldon.
The dispute was over the property tax rate that was suggested in committee earlier this year at $0.49 per $100 of valuation for 2016, with no increase over the rate for 2015.
As discussions on possible approval of that tax rate began, councilman Rhett Harrison made a motion to reduce that rate to $0.485 per $100 of valuation.
“I am going to vote against the 49-cent rate and make a motion that we establish the rate at 48-and-one-half percent,” he said.
Following that, an hour-long discussion ensued.
Perhaps the easiest way to describe it is with direct quotes from city council members and Mayor Kenny Weldon:
• Jerry Warren: “This [tax rate] – even though it’s the same rate as last year − is still in effect an increase in taxes. Even if the tax rate stays where it was, this is still an increase in taxes because of increased valuation on property. People will be paying more in taxes because their property is worth more this year than last year. This is a tax increase for the homeowner.”
• City Finance Director Walter Wood: “Property valuation has gone up about three percent across the board.”
• Mayor Weldon: “These discussions on the budget began months ago; we had numerous meetings where we went chapter by chapter, and we had a budget workshop to go over this in detail and our budget discussions were adopted.”
The discussion continued with the pros and cons of each tax rate getting a full hearing. But in the end, a vote was taken on the $0.49 rate, again, resulting in a four-to-four tie on the part of city council members that broke down as follows:
For the $.04900 tax rate: Mark McClinton, Doug Svein, Brady Pendleton and Alan Nix.
Against: Rhett Harrison, Carla Trussell, Sherry Zachery and Jerry Warren.
For those who are not familiar with city council procedures, the Mayor only votes in tie situations. When the four-to-four logjam occurred, Mayor Weldon declared a five-minute recess and left the room. When he returned, he voted to approve the original tax rate of $0.49 per $100 of valuation and the matter was settled.
After the vote he said, “I want to clarify something regarding your statement, Jerry, about taxes increasing.
“The total tax revenue for the city of Stephenville increased, but the tax rate did not change. So how did that occur? If the tax rate stays the same, and yet more tax revenue is generated, what caused the increase?”
He then explained that the property values in Stephenville increased – not the tax rate.
“The reality is that property values tend to go up. So you’re saying that taxes went up, but specifically what you’re saying is that tax revenues went up because of higher property valuations. But the tax rate did not increase,” Weldon said.
With that resolved, the city council then moved on to other matters including:
• Approval of a long list of amendments to the FY 2015-16 budget
• A bond issue of approximately $2million in long-term debt to replenish utility reserves and for possible use on future projects was also approved
That $2 million in debt is to replenish the utility reserves used for the TSU Methodist Branch SS Utilities Project and can be used as seed monies for other projects such as the Eastside Sewer Project.
According to documents provided by Woods, that bond issue debt will be repaid over a 10-year period ending in 2027.