City officials defend tax proposal
January 31, 2011
Outside the Clovis-Carver Public Library on Monday night, winds whipped snowfall to a chilling effect on empty city streets.
Inside, there was a chill as well, with many residents cold to the idea of a potential gross receipts tax increase heading to the Clovis City Commission Thursday.
Commission members appeared at the library’s north annex for a town hall meeting to discuss Clovis’ tax rates, a potential .25 percent increase and the Ute Water Project the money would help fund.
The meeting went just shy of three hours, with about 35 attending.
In three days, commissioners will be tasked to vote up or down on the hike, expected to generate nearly $1.5 million annually to help pay $13 million in obligations by 2018 to the Eastern New Mexico Water Utility Authority.
The taxes, according to the ordinance, would take effect July 1, 2011, and expire 10 years later.
The authority is in charge of creating and maintaining the Ute Water Project. The $500 million project, which would pump water from the Ute Reservoir in Quay County, would provide up to 16,450 acre feet (5.36 billion gallons) of water annually to local entities involved in the project.
The project is to be shared by federal (75 percent), state (15 percent) and authority members (10 percent). Clovis would receive about 75 percent of that water, and bears a $36 million share of the total cost.
City Manager Joe Thomas outlined Clovis’ gross receipts tax rate — currently 7.5625 percent, 45th among New Mexico communities. If approved, the tax would become 7.8125 percent, which would jump Clovis to 31st in the state.
Commissioner Randy Crowder, who contends the obligations can be met by renewing expiring bonds, said the increase would put the city in the highest sixth of communities regarding GRT rates.
Ron Dickson of Clovis said he felt the city sang one tune when asking voters to approve a .25 percent increase in 2004 — which was approved by voters — and then sang another when it was delivered to the city commission, which doled out the revenue for other priorities.
“(Of the total), 91.8 percent went elsewhere,” Dickson said. “I call that bait and switch.”
Mayor Gayla Brumfield countered that the resolution was not solely dedicated to the Ute Water Project, and Thomas said 26.1 percent has gone to the project and other water projects. He conceded the total was less than 30 percent budgeted, but street projects and the Hull Street Overpass replacement were unanticipated projects.
Commissioner Fred Van Soelen, who was not on the commission in 2004, said he remembered how the increase was proposed, and he felt the money has been spent how it was promised.
“I voted for it because I thought more was going to go to police and fire,” Van Soelen said. “I wish more of it was going to police and fire.”
Thomas said the fund currently has approximately $1.7 million, with $700,000 budgeted for payment of this year’s obligation to the Ute Water Project.
Dickson noted he’d never seen a tax increase go away, and asked how the city tightened its belt recently.
Commissioner Juan Garza said the city makes efforts to cut costs. He noted the city’s run with a polycart trash pickup program that would have saved money, but was scrapped when it drew overwhelming negative feedback.
Tim Ashley of Clovis asked if the city considered other alternatives besides new taxes. He felt ballot issues on tax increases to fund county jail and courthouse improvements were soundly defeated in November because voters felt they were only given one option.
Brumfield said she trusts the city staff, and noted that it weighed many options, including franchise fees and property tax increases. Those options, she said, weren’t as equitable or fair to the citizens.
Kim Runyan, president of the High Plains Patriots, thanked the commissioners for having the meeting, but asked how committed other entities were.
Brumfield said, “it’s not sitting in a checking account,” but numerous federal agencies are on board with the project.
Runyan followed by asking what would happen to the local money if the state and federal governments dropped the ball.
Van Soelen said the money would be allocated into backup plans.
“We’ve talked about the Plan Bs,” Van Soelen said, “but all of the Plan Bs are significantly inferior to Plan A.”
Peter Penney, who has lived in Clovis since 1974, said he was concerned about how seniors on fixed incomes could pay for higher taxes, and asked about property owners affected by the pipeline.
Crowder said staff working on the project has talked with landowners and has handled the matter very professionally.
Greg Gates of engineering firm CH2MHill said the $500 million estimate includes easements.
If the commission votes in favor of the ordinance, there is an avenue of redress for citizens in opposition to the decision.
Residents would have 30 days following adopting of the ordinance to file a petition with at least 456 signatures. The total represents 20 percent of the registered 2,276 voters in the 2010 city elections.
A petition would force what is called a “negative referendum” election, where residents vote in favor of or in opposition to rescinding the commission’s decision.