This article was updated to correctly identify City Councilmember Javier Ramirez and Human Resource Director Gerardo Villareal.
Palmview’s city council is waiting to see how the public reacts to a proposed 2.5-cent property tax increase before making a final decision on the city’s 2017-2018 fiscal year budget.
Interim City Manager Leo Olivares submitted the proposed property tax rate of 0.5001 per $100 of assessed valuation to the mayor and council at their Aug. 15 meeting Tuesday. The city’s current rate is 0.4751 cents per $100 of assessed valuation.
Olivares said the value of the average home in the city is about $89,000 and that the proposed increase would mean the average homeowner would experience a $22.50 increase in their annual property tax.
Olivares said the city’s total property evaluation is $435 million including $263 million in single-family residences, $13.3 million in multi-family residences and $95.9 million in commercial property valuation.
The city’s general fund for FY 2017-2018 is estimated at $5.8 million, according to the proposed budget available on the city’s website. Olivares told the mayor and council the tax hike would mean an additional $100,000 for the city’s general fund, which he said would be used to make payments on future bonds or certificates of obligation the city will seek for infrastructure improvements such as storm drainage and street asphalt overlay projects and toward the purchase of the city’s own ambulance which is expected to cost the city $160,000. Olivares said the ambulance should pay for itself through service fees the city will charge even with the need to hire at least two more emergency medical technicians to man the ambulance. He said a third EMT position would be created by combining two existing part time EMTs.
“If you have an established ambulance service and good roads it’s going to attract businesses,” Olivares said.
But city councilman, Javier Ramirez, said he feared a tax rate hike would have the opposite effect on new business and suggested keeping the tax rate where it is.
Olivares said even with the tax hike Palmview’s tax rate is comparable to that of nearby cities. For example in Peñitas the city is considering a tax rate hike of 5 cents from 50 cents to 55 cents per $100 of assessed valuation.
The council unanimously approved the proposed tax rate increase after Olivares explained if residents express disapproval of the increase at an Aug. 29 public hearing the city can always reduce the proposed tax rate that would be presented to residents at a Sept. 12 public hearing. Olivares said by law the city can only reduce a proposed tax rate, not raise it, following a public hearing on the tax rate.
“So at the first hearing if the public objects to the tax increase then you can bring it down. But if you set it low you can’t bring it back up,” he said.
Public hearings on the tax rate are set for Aug. 29 and Sept. 12, at 6 p.m., at Palmview City Hall, 400 W. Veterans Boulevard.
In other business Tuesday the council decided against acting until a later date on the rezoning of four land parcels for residential and commercial development.
The city’s new finance director, Rachel Chapa, one month on the job, said she was still waiting for financial records from the private contractor who had been maintaining the city’s books that would explain which entities the city owes about $3.5 million.
Following the meeting Chapa said the city was still awaiting response from Frank Rodriguez, the CPA who was hired as an independent contractor to perform the accounting for the city. She said the city is awaiting the Financial Operations Manual with Fixed Asset List Rodriguez was maintaining for the city.
During the meeting Chapa said she could not explain why the city was previously using three separate Quickbooks accounts to maintain the city’s financial records. She said Quickbooks was never intended to maintain government finances and that their use “absolutely violates the generally accepted accounting principles of accounting.”
Chapa said the Quickbooks issue is separate from the failure of Rodriguez to provide the city monthly reports which would allow it to know how much it owes each entity.
The city council instructed city attorney, Rick Perez, to draft a demand letter with a reasonable deadline for the Rodriguez to provide the reports. Chapa said she was in the process of establishing policies to keep better track of the city’s budget.
In June the city fired former city manager, Ramon Segovia, citing a lack of experience and knowledge of governmental functions. Segovia has filed a wrongful termination lawsuit against the city. (See related story.)
Also Tuesday, Olivares introduced to the council the city’s new human resources director, Gerardo Villarreal. Villarreal was previously employed with Disney World and One Main Financial.
“I hope to bring my experience from these Fortune 500 companies to Palmview,” Villarreal told the council.