City agrees to new rollback rate

GONZALES — The City of Gonzales had their day in court last Friday over their proposed tax rates, facing a temporary restraining order for adopting what the council had already agreed upon.

A challenge was issued by plaintiffs contesting the city's tax rollback rate, which was set at the previous Gonzales city council meeting of .4639 cents per $100 of property valuation. Plaintiffs — in this case Robert B. Scheske, Doyle Allen, Lorenzo L. Hernandez, Steve Hendershot, and Antonio Espinosa — claimed that the city acted in bad faith to come to this rate as a way to protect themselves from the possibility of a citizen-petitioned rollback election.
Judge Dwight Peschel sat in to hear the case for the 2nd 25th Judicial District. He instructed both parties to retire to city hall to hammer out an agreement by 11 a.m.

Prior to the deadline, plaintiffs' attorney Martin Golando shuttled between council chambers — where his camp was set up — and a room across city hall where city attorneys crunched numbers. Both sides were tasked with finding an agreeable rollback rate that went along with the agreed-upon .2761 effective tax rate. Just before the deadline, Golando signaled that an agreement had been made and all parties returned to the Gonzales County Courthouse.

Acting on behalf of the city, attorney Clarissa Rodriguez of the firm Denton, Navarro, Rocha, Bernal, and Zech read the list of 15 compromises. They were:

• The city agrees to a Texas Combination and Revenue Certificate of Obligations to support their debt service and tax rate including 2011 Series of $443,325 from the original tax filing and a 2017 Series of $146,750 in which the city will substitute eligible debt for contested fire apparatus;
• Setting the city's debt obligations for fiscal year 2018-19 at $590,075;
• The city will submit new debt numbers to the Gonzales County Tax Assessor Collector in order to recalculate a new tax rate;
• The city agreed to reimburse the debt service fund from the general fund by $186,909 which includes removing debt for John Deere leases and a pumper/tanker;
• Sets the effective maintenance and operations (M&O) rate at .1100;
• Sets the rollback maintenance and operations (M&O) rate at .1188;
• Sets the debt service rate at .1060;
• Agrees that the effective tax rate is .2761;
•  Sets the rollback rate at .2248;
• Agrees that both parties will work with the plaintiffs' financial consultant Matt Smith to ensure all calculations are correct before submitting to the tax assessor collector and for better practices going forward;
• Agrees that this is not an admission of bad faith by the city;
• Agreed to set a council meeting for the coming Monday to agree to these terms;
• Agrees that the city may adopt a tax rate before Oct. 1 if the council agrees to the compromises above;
• Plaintiffs' lawsuit will be dismissed with prejudice with each party bearing its own costs if the city agrees to the terms, subject to Item 15 below;
• The city agrees to pay attorney's fees to the plaintiffs in the amount of $5,000.

Judge Peschel said that if the council could not come to agree on the terms, that both parties would return to court on Oct. 1, after his vacation.
“I don't mean to be rude,” the judge said, “but I hope I don't see y'all again.”
And it appears that he will not.

On Monday, council met in a special called session to discuss the matter. After a closed-door executive session of over an hour, council reconvened in public to agree to the terms without discussion.

Council met Wednesday night to discuss approving the new tax rate. Click here for their decision.