Despite efforts from community members calling for a rollback election, it was announced during city council on Wednesday that there will be no rollback election. With 405 valid signatures on a petition calling for a rollback election, the document was still found invalid. It turns out the city had not submitted its debt for the correct rollback calculation, therefore the 55.46 percent tax hike did not exceed the rollback rate. In fact, it fell 7 cents short. After the city submitted its debt, the Tax Assessor Collector’s Office calculated a new rollback rate of .3521, thus invalidating the petition.
In October, Gonzales City Council adopted an effective ad valorem tax rate of .2750 for $100,000 valuation. The prior year the effective tax rate was set at .1769. With the city's rollback rate calculated at .1867, a petition was circulated calling for the city to conduct a rollback election to roll the effective tax rate from .2750 back to .1867.
The petition was submitted to City Secretary Kristina Vega, during the hearing of residents’ portion of the city's regularly-scheduled meeting, on Tuesday, December 5. Vega was tasked with verifying the signatures. The petition needed at least 375 signatures, representing 10 percent of registered voters, to be declared valid. The petition was found invalid because the city's numbers were inaccurate.
City Attorney T. Daniel Santee gave a presentation during a workshop at a special meeting called on Wednesday afternoon. He came to council with an overview on how they got to the point of being faced with the petition for a rollback election.
According to Santee, the tax rate consists of two components, each of which must be approved separately. The components are: Maintenance and Operations is the rate that, if applied to the total taxable value, will impose the amount of taxes needed to fund the unit's debt obligations and Effective Maintenance and Operations, the rate that, if applied to the total taxable value, will impose the amount of taxes needed to fund maintenance and operation expenditures of the unit for the next year; and the city's debt, a bond, warrant, certificate of obligation, or other evidence of indebtedness owed by a taxing unit that is payable solely from property taxes in installments over a period of more than one year, not budgeted for payment from maintenance and operations funds, and secured by a pledge of property taxes, or a payment made under contract to secure indebtedness of a similar nature issued by another political subdivision on behalf of the taxing unit.
According to Santee, the city has a total annualized debt service requirement for 2018 of $1,001,861.00, with $628,334.44 to be paid from general fund resources in 2018, including Capital Lease Payments and Water Bonds.
Santee said the remainder of the debt service Hydro Bond (not scheduled to be paid from general fund resources) Expo Bonds (not scheduled to be paid from general fund resources) is scheduled to be paid from other revenue sources, but if those other resources could not pay the debt the debt would have to be paid from the general fund.
According to Santee, effective tax rate means a rate expressed in dollars per $100 of taxable value calculated according to the following formulas:
Effective Tax Rate = (Last Year's Levy – Lost Property Levy) / (Current Total Value – New Property Value);
Rollback Tax Rate = (Effective Maintenance and Operations Rate x 1.08) + Current Debt Rate.
Santee said the tax rate adopted by council cannot be recalculated at this point but there is no case law stating council cannot correctly allocate percentages of the adopted rate between the maintenance and operations portion and the debt portion as required by law.
Santee said the Tax Assessor Collector calculates the Roll Back Rate based upon the information the city provides to the Tax Assessor Collector’s Office and is not responsible for determining the amount of debt the city requires to be paid from the levy of Property Taxes.
The city incorrectly reported zero debt to the Tax Assessor Collector’s Office as the amount required from Property Taxes to service debt resulting in the incorrect Rollback Rate of .1867.
The City has corrected their report to the Tax Assessor Collector showing $628,334.44 required to be levied in Property Taxes for debt service.
The Tax Assessor Collector’s Office calculated a new Rollback Rate of .3521 with the correction.
After Santee's presentation council voted to approve: an ordinance ratifying the adopted overall tax rate and correcting the allocation of the overall rate between Maintenance and Operations (M&O) and Interest and Sinking (I&S) of the overall rate, as required by statute; an ordinance amending the budget to correct certain balances as reflected pursuant to city charter, adopted fiscal policies and the corrected allocation of M&O and I&S funding; and, a resolution declaring the rollback petition invalid.