A ‘taxing’ decision: Palm Valley eyes tax increase

PALM VALLEY — City officials were clear last night – they see no other option.

It’s either raise property taxes or let the streets continue to deteriorate.

Members of the City Council verbally agreed the city must increase its tax rate by about eight percent in order to add to its reserve fund for future street reconstruction.

“I am in favor and I am proposing this tax increase,” said Mayor George Rivera. “As a city taxpayer and homeowner, I don’t like it, but our infrastructure is deteriorating.”

The tax rate increase to just more than 48 cents per $100 of valuation equates to a rise of $32 on a $100,000 home. The tax rate increase will bring in an additional $42,000 per year in revenues to the city.

“It’s not a huge financial impact, but I don’t see anything else we can do differently,” Rivera said.

Council member Debe Wright agreed.

“We don’t feel we are good custodians of the city if we let the streets fall apart,” she said.

But, she also was quick to tell those in the audience, some of whom voiced their disagreement with a tax increase, that they were the only options for the city to increase revenue.

“We have property taxes, water and sales tax,” she said. “Not having commercial business, we have no other way to generate money. The only way is from taxpayers. There is just not anywhere else to get that money.”

Local business owner Minerva Simpson suggested no tax increase. She mentioned the increase in 2014 and the likelihood other entities in the area also would be increasing their tax rates.

“It would be in the best interest of taxpayers for no increase,” she said. “It seems like everyone has their hand out for more taxes.”

Resident Patty Gonzales agreed with those against the increase.

“I find it interesting that this is the same tax rate as Austin,” she said. “They are pricing themselves out.”

She said she was concerned that could happen with residents of Palm Valley, including families. However, she was quick to point out she’s not always against tax increases, but she wanted to see a plan for use of the additional tax revenue.

Not all the comments were against a tax increase.

One of Palm Valley’s original investors, Matt Gorges, was in attendance and voiced his support of the tax increase for the roads. He explained some of the history of the roads and that they are in need of real repairs as soon as possible.

He talked about the roads on the southwest corner as being deteriorated and the current repairs are not working and a waste of money. He said he is in favor of improving the city in any way possible.

“It’s time to do it and do it right,” he said. “Whatever method is better than what we are doing now. It’s definitely time to do something.”

According to Rivera, the city will come up with a plan to reconstruct the roads, namely Palm Valley Drive, the circle around the community. The cost of the road reconstruction is estimated at $7 million. That’s a sum Rivera said is “unattainable,” which is why officials will come up with a different plan for a reduced cost. There are a total of about 8 miles of roads in Palm Valley and Palm Valley Drive makes up just more than 3 miles.

Rivera said the city would have to do any significant reconstruction in pieces due to the “considerable” cost. He said the city has some reserves, but not enough for that type of project.

“We have no choice,” Rivera said of the tax increase. “We have to do this now for the future of the city.”

The city’s annual income and budget is about $700,000 per year and city council member John Widger said there’s not much left over after paying for police, general government and public works.

“The trend in the city is property taxes are rising at a lower rate than our expenses are rising,” he said.

There will be a second public hearing, set for 5 p.m. Aug. 30 at City Hall. The budget and tax rate is expected to be voted on during a special meeting set for Sept. 8.