Council adopts tax rate, budget, JB Wells agreement


Gonzales City Council took care of three pressing items of business Thursday night when they adopted the new budget and tax rate for the upcoming fiscal year and approved an agreement with Gonzales Economic Development Corporation to help settle a lawsuit over the J.B. Wells estate.

Council members voted 3-0 to adopt a tax rate of 32.52 cents per $100 valuation ($0.3252), which is the same as the voter-approval tax rate, or the highest tax rate that the city may adopt without holding an election to seek voter approval of the rate.

Citizens may attend the public hearing to voice their support or opposition to the proposed rate as well as the proposed $31.6 million budget 

While the new tax rate is larger than the no-new-revenue tax rate of 30.94 cents — the tax rate for the 2021 tax year that will raise the same amount of property tax revenue from the same properties in both the 2020 tax year and the 2021 tax year — it is actually a decrease of 2.59 cents from last year’s tax rate of 35.11 cents per $100 valuation, or a decrease of 7.38 percent in the total tax rate.
The new rate is expected to increase the total tax revenues from properties on the tax roll in the preceding year by 5.39% or $88,200, bringing the total tax levy on all properties to $1,723,815. Of that amount, $8,176 is tax revenue to be raised from new property added to the tax roll this year.

The average homestead taxable value increased from $117,233 in 2020 to $127,106 this year, an increase of $9,873, or 8.42 percent. The tax on the average homestead will increase from $411.61 to $413.35, an increase of just $1.74 or 0.42 percent.

The newly adopted 2021-22 budget of $31,606,346 includes $10,484,603 in general fund expenditures, including JB Wells Park, as well as $10,989,032 in the electric fund and $3,098,509 in the wastewater fund. Other fund expenditures being proposed include $1,913,509 in water fund; $1,989,913 in the economic development fund; $1,247,700 in debt service fund-governmental fund; $734,627 in the solid waste fund; $581,480 in a restricted use fund; $537,900 in capital projects-business; and $28,075 in capital projects-governmental. Total revenues being proposed are $28,551,914.

Council members also voted 3-0 to adopt an economic development funding agreement with the GEDC to help pay off the $1.825 million settlement of a lawsuit filed by the Austin Presbyterian Theological Seminary over the J.B. Wells Park. The agreement takes effect Sept. 15.

The seminary sued the City of Gonzales in 2017 over the estate of J.B. Wells Jr., whose last will included a reversionary interest in favor of the seminary in the real property that now makes up the city’s J.B. Wells Park, Expo and Arena.

This past June, after four years of battling in court, the two sides reached a settlement agreement of $1.825 million, which avoids more legal fees and gives the city all of the seminary’s interest in the land. The city had already racked up more than $500,000 in costs defending itself in the lawsuit.

The Gonzales County Court approved the settlement agreement in July after the city authorized issuance of 20-year general obligation refunding bonds as allowed by the Texas Government Code to pay for the settlement.

Annually levied ad valorem taxes will be used to pay back the settlement amount generated by the sale of the bonds. By issuing general obligation bonds, the city is not required to post a legal notice nor solicit voter approval.

In an effort to lessen the impact the settlement will have on the city, officials reached out to GEDC to ask them to help pay for half the cost, or $912,500. The city was facing an Oct. 10 deadline to pay the settlement in full.

During a joint meeting with the council, GEDC agreed to provide the $912,500 to the city, but spread out over the course of the 20-year bond period, which represents about $61,700 per year.

By making the payments annually instead of in one lump sum, GEDC is able to absorb the cost through its sales tax collection instead of running down its reserves and thus can continue to use its reserve funds to recruit and retain business in Gonzales. GEDC collects a half-percent of sales tax revenue in the city for its funding.

While GEDC is helping the city pay back the settlement, it is not a party to the bond, nor will it receive any interest in the J.B. Wells Park complex.

The J.B. Wells Park, Expo and Arena was appraised at $7.349 million by the Gonzales Central Appraisal District, and $11.3 million by Bolton Real Estate, according to case filings.