Wellton to vote on property tax plan

Town meeting Tuesday will focus on idea

The community of Wellton incorporated as a town in 1970 after 92 years due to talk about the city of Yuma, 30 miles to the west, pushing through Telegraph Pass and gobbling up the historic stagecoach and train stop.

Residents feared the imposition of property taxes, among other fees and regulations, and so they created their own municipality which would survive without taxing people’s homes and businesses.

“The growth would happen and the sales tax would come in, and they wouldn’t need a property tax. And for 47 years that was the case,” said Town Manager Larry Killman, a Wellton native. “And the feeling was you shouldn’t even recommend a property tax, especially as the snowbirds got involved and they started coming out and buying.” The town’s population approximately doubles during the winter season.

But on May 16 the town’s 1,100 voters, out of about 3,100 year-round residents, will decide whether Wellton should start collecting up to $400,000 in primary property tax annually, at a tax rate of $2.6385 per $100 of limited property value. Early ballots were mailed out by the Yuma County

Recorder’s Office April 19.

According to the publicity pamphlet for Proposition 410, that rate would equate to a $263.85 annual tax on a residence with a limited property value of $100,000 and $395.78 per year for agricultural land, under current assessment rates. Commercial and industrial properties with a limited property value of $250,000 would have an annual bill of $1,187.33.

According to figures provided by the Yuma County Assessor’s Office, the average value of an owner-occupied residence in Wellton is $59,887. For commercial and industrial real property the average is $206,951, and for agricultural real property it is $36,150.

The town will hold a public community meeting 6 p.m. Tuesday in the Wellton Elementary School gym, 29126 San Jose Ave., for residents to get updates on the tax election, the town budget and services.

Killman, who became town manager in December 2015 after decades working for the Wellton-Mohawk Irrigation and Drainage District and as an environmental consultant, said, “I’m more of a businessman, I”m just trying to balance the books. And keep our community alive.”

The town’s annual budget is approximately $3.1 million. Years of stagnant population growth — and local businesses shutting down because jobs that used to support people living in smaller communities further east have disappeared — have left Wellton with a weakening sales tax base. State-shared revenues have also been on the decline since the Great Recession.

Officials are working to attract new business by seeking funding for new infrastructure including a natural gas line and a wastewater treatment plant. Almost all properties outside of Coyote Wash are on septic systems, and a grant-funded feasibility study for sewer service is currently underway.

“The problem really is when the lots were laid out, back in 1919, some of the original subdivision, some of the lots are only 50 feet wide, so there’s no room for a replacement septic system on the existing lots, so it’s becoming a real problem,” he said.

In the meantime, the town needs to pay for and house a new water pumper truck, replace aging police cars and fire engines, and repair deteriorating infrastructure throughout the town and pay for a host of other items, while closing a deficit of about $300,000.

Killman said he didn’t know how dire the town’s financial system was when the town manager job opened up a couple months after he’d been appointed to fill a vacancy on the Town Council.

An ad for a new manager was posted and about 10 responses came back, but “they were all really young people just out of school, or were older people trying to pad their retirement. None of them was from Wellton, nobody knew anything about Wellton,” Killman said.

So he stepped down from the council, applied for the job and got it, “The first month I got a financial report where we’re $300,000 and something in the hole, for the current budget. So that’s basically what I inherited.”

He said he got the deficit down to about $260,000 by the end of the fiscal year six months later, but there were many more problems to tackle.

Killman said that going back over the books, he feels the overspending began approximately two years earlier, after the town got a nearly $900,000 check for past-due sales tax after the sale of a local fertilizer plant which hadn’t paid any for years.

He said officials had “a lot of very good reasons” to start spending it and they did, most notably a 4,000-gallon water pumper truck for the volunteer fire department, to serve areas on the west end of town which has no water lines or hydrants.

In August 2015 the town purchased the truck and associated equipment for about $600,000, on a 10-year loan with no clear way to pay it off. Moreover, the building the fire department shares with Tri-Valley Ambulance is full, so there’s no place to keep it.

“Unfortunately, right now it’s sitting over at the water plant, this beautiful new fire truck with all this equipment and I can’t put it all out in the sun, but it’s not located at my fire station. I have to cross the railroad tracks and hope there’s no trains, and go up into the water yard, unlock gates, get my truck, and then I can respond,” he said.

He said the town has very little cash to spend; he had to get a waiver from the state Department of Corrections before he could bring in prison inmates, paid 50 cents an hour, to maintain parks and public areas.

Wellton inherited Coyote Wash’s streets, infrastructure and 9-hole golf course after its developer went bankrupt during the housing crash. Killman said the streets are cracking, and the street signs are so peeled and faded that they’re unreadable.

“I go to replace them, and they’re 75 (to) 100 bucks apiece. There must be 200 signs over there. I can’t even replace the street signs that you can’t read. The cracks in the pavement are this wide and this deep,” he said, indicating about an inch. “And I get called and they’re going to sue me because it’s a trip hazard, and I can’t fix it. I don’t have any money.”

Town Council unanimously approved holding a special election on the property tax, and several members have published arguments “for” its approval in the publicity pamphlet.

No arguments against the plan were submitted for the booklet, but there is significant opposition in the community, with a lot of part-time residents who own property in Coyote Wash but don’t vote locally trying to rally their neighbors against it.

But year-round resident Luis Luna, who works three jobs to support himself, a daughter in college and a wife who needs dialysis three times a week, said he’s also speaking for those who can’t vote, including those aren’t citizens even though he encourages them to get naturalized.

Most residents are poor, and can’t afford to pay more property tax on top of what they already pay to the county, schools and other districts, he said. “Wellton is not a little town that is capable to support that. What they are going to be doing is ripping off my people, who cannot vote. That’s (who) it’s going to rip off, that’s what they want. Let the ones who cannot vote, that’s where you’re going to exercise that property tax, you know.”

Luna said the town overspends on salaries for its 24 employees and should promote from within rather than hiring people from out of town for top jobs. The five-officer police department hasn’t been effective in stopping the break-ins at his home and yard, he said. And Town Council members should not be getting health insurance through the town.

“My thing is, downsize. I know it’s going to hurt people,” he said.

Longtime resident and contractor Ralph Davidson has known Luna since grade school, and he has known Killman for 30 years. He said the town needs additional revenue in order to survive, and trusts the current administration to spend it wisely, as led by Killman. “I trust him 100 percent. I know he’s the man for the job,” he said.

Davidson bought and reopened Wellton Hardware late last year, about three years after it was shut down and five years since it had gotten any new merchandise to sell. Business has been good so far, he said, but “people complain at my store, on a weekly basis about what we have to pay in sales tax. And I’ve already warned the Town Council, if you raise the sales tax, I’ll shut the doors.”

A proposal to raise the town sales tax in 2013 failed due to opposition from businesses, and it was considered by the council before it turned to the property tax proposal this year.

The current sales tax rate is 2.5 percent, or 9.21 percent when combined with state and county sales taxes. This is higher than Yuma’s total tax rate at 8.21 percent, but lower than Somerton at 10.01 percent or San Luis’ at 10.71 percent, according to the Arizona Tax Research Association.

San Luis is the other municipality in Yuma County which does not levy a property tax.

Davidson said he bought the hardware store to reinvest in his community and give residents options besides driving a half-hour to Yuma for their home maintenance needs, but feels certain his customers will bail if the sales tax is raised. He’s not as concerned about people cutting back on purchases if they start paying a local property tax.

Killman says pay reductions have not come up yet in the budget discussions, but he expects them to. His salary is about $87,000 a year, the police chief gets about $60,000 and the finance director about $50,000. “They’re not high numbers. We’re significantly below the average even for our size range, in the state,” he said.

Starting in June, there will be two Town Council members getting medical insurance through the town, at a cost of about $550 a month, he said.

Killman said he doesn’t know which way the election will go, but he hopes a lot of people come out to the town meeting Tuesday to hear the arguments, both for and against.

“My chances starting out were not good, but as the people, the ones who want to come in and get information get information, they’re coming across, absolutely. But where we are in the total numbers, I don’t know.

“Some simply can’t afford it. They want it, they want to protect their town, but they can’t. That’s the hardest group, because it’s not like I have more industries and more jobs coming in,” he said.

Luna, who has scrawled anti-tax statements all over his white pickup truck in washable paint, said he will continue his fight against the tax, and he doubts it will be approved by voters.

“Their math does not constitute a property tax. It’s too small of a town,” he said.