After two public hearings at which no one from the public opposed the city manager’s recommended 2.5 cent property tax increase, whether or not council members will approve the increase remained in question as final approval of the measure goes before the council tonight.
Currently, the city’s tax rate is 0.4751 cents per $100 of assessed valuation, but during a city council meeting last month, Interim City Manager Leo Olivares submitted the proposed property tax rate of 0.5001 per $100 of assessed valuation to the mayor and council.
According to Olivares, the increase would generate an additional $100,000 that would go toward partial funding of several projects including renovation for the city’s parks and recreational center valued at $5,000, the $160,000 purchase of a new ambulance and a street pavement project being done with the Agua Special Utility District which is expected to cost $1 million.
Olivares told the council members during the city’s second public hearing on the proposed tax rate that even with the increase, property taxes for the city would be on the low end in the Rio Grande Valley. The highest property tax rate in the Rio Grande Valley is in Donna, that is just under a dollar, he said.
“I recommend we increase the property tax rate,” Olivares said. “If people are afraid of investing in Palmview because our taxes are too high, you can tell them our taxes are still on the low side. There’s not a lot of investment in the city, you’ve heard it before, because we don’t have any sewer yet. But, if you have millions of dollars to invest, you want to put it in a community that will provide the infrastructure. These are funds that will stay in the city.”
Despite Olivares’ assurance to the council of the need for the increase, several council members expressed hesitance regarding the new tax rate.
“It’s good being on the low side of property taxes. That’s the way I’d like to keep it,” Joel Garcia said of the existing tax rate during the meeting. “I don’t think we should burden our community with this increase. I don’t feel good about doing this.”
The city’s recently hired finance director, Rachel Chapa, told council members the funds generated from the increase will also help pay off the city’s nearly $4 million debt accrued over the last decade.
“We’re on a thin line,” Chapa explained. “We’re straddling right now because of the debt we have. We need to move the city forward while at the same time meet commitments made in the past.”
Olivares echoed Chapa’s sentiment.
“We’ve got to spend less money or raise revenue somehow,” he said. “We’ve met with department heads to trim as much as we could from the budget without sacrificing it. What else can we do?”
Council member Ricardo Villareal said after the meeting he will likely vote “no” on the property tax increase and feels his fellow commissioners will do the same.
“Our city is recommending the increase but I think if we tighten our belts and be more fiscally frugal, we can manage to move forward,” he said. “We can learn from the past and make better choices with the information we have.”
The city council will vote on the increase tonight at 6 p.m. in the Palmview City Hall.