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Sullivan City to raise property tax, appoints EDC board

Sullivan city’s commission will hold two public hearings on plans to increase the city’s property tax rate. The tax increase is one of several measures the commission is evaluating intended to improve the city’s finances.


During it’s Aug. 7 board meeting the city’s commission voted to propose a property tax increase of just under 4-cents per $100 of assessed valuation from the current $0.4606 to $0.50. Public hearings have been scheduled on Aug. 17 and Sept. 7, both occurring at 5 p.m. in the Sullivan City Municipal Building, 500 Cenizo Drive.

20130906 SUllivan City Logo

If passed the tax would increase the city’s revenue by just over $38,000, said Mayor Leonel “Leo” Garcia. However, because the city’s tax collection rate is only about 85 percent the actual tax increase would be less, Garcia said, adding the tax hike would mean an annual tax increase of about $34 for the average household in the city. The city has 1,121 households subject to the tax, Garcia said.


“We’ll have the lowest tax rate in western Hidalgo County,” said Sullivan City Manager Juan Cedillo.


By comparison, Mission’s city council will consider a proposed tax rate of $0.4862 at its Sept. 14 meeting, a reduction of about a penny from last year’s rate, according to figures released during budget hearings in July.


“If you divide the increase by 12 it comes to about a $3 a month increase” for the average household, Cedillo said.


The city’s overall fiscal year 2016-2017 budget is $1.56 million with $372,786 expected to be generated from property taxes, according to the city’s budget.


Also Monday the city commission appointed a seven-member board to head the city’s Economic Development Corporation. The state had decertified the city’s EDC because of its failure to provide tax reports for the past seven years. Cedillo and city secretary, Veronica Gutierrez, reconciled the issue by compiling the missing reports and the EDC was recertified last month. The EDC receives a half-cent for each dollar in retail sales in the city while the city collects 1.5 cents on every dollar of retail sales. The EDC is expected to collect about $56,000 this year. The money is intended by law to be used for economic development such as providing incentives for businesses to locate in the city. Last year the city collected just under $166,000 in sales tax, according to the budget.


The commission is also considering the opportunity to accept a $319,000 grant from the Texas Water Development Board. Cedillo said the city grant would be used to hire an engineer to develop a master drainage improvement plan. He said such a plan is required to present to the TWDB and other entities to apply for grants of perhaps $5 million for drainage and road improvement projects. Cedillo said accepting the grant would mean payments of about $450 a month over 30 years. But he also said some of that debt could be paid via subsequent grants for future infrastructure improvements. But he said the first step in infrastructure improvements is drainage.


Garcia asked the matter be tabled until he had a chance to meet with the engineer, Ricardo Salazar of S&GE, to discuss the scope of the plan and the long-range ramifications of the debt incurred if the city accepts the grant. Salazar said the city must present its plan sometime next month or lose the opportunity to accept the grant.


The commission also gave its approval for Police Chief Richard Ozuna to apply for  a $15,000 grant from the Texas Department of Public Safety. The chief said the money would be used for overtime pay for officers and for fuel and maintenance on police vehicles.


In a cost cutting measure the commission also voted to terminate the contract it has with it’s financial advisor, Hollis Rutledge and Associates. Garcia said he did not feel the city had utilized Rutledge’s services sufficiently over the past two years to warrant maintaining the monthly payments the city has been making and because Rutledge declined to provide services on an as-needed, hourly pay basis.


In other business the commission approved a request from Police Chief Richard Ozuna to hold a National Night Out event in the city’s park on Aug. 17.   The event will take place from 6 to 9 p.m. with TV newsman Eduardo Flores as the master of ceremonies.


City Manager Cedillo said he anticipates the city’s long awaited splash pad will be completed in time for the event. The city budgeted $400,000 on the project. When completed Cedillo said it will be the “premiere” splash pad in western Hidalgo County and should draw visitors from other communities into the city.

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