Renewed property tax to fund raises for city employees

Full council, mayor vote to extend fee that was put in place to pay off $20 million bond issue

The city operating budget that Mayor Javier Gonzales and councilors approved for the fiscal year that starts July 1 included a 2 percent cost-of-living adjustment for all city employees. On Monday, the City Council finalized a way to pay for it. The governing body voted 8-0 to renew a property tax that had been levied to pay off a $20 million bond issue in 2008 for parks, trails and open space. The city recently paid off the bonds and will now use revenue generated by the tax for the pay raises. The tax accounts for about 0.498 mills of the city’s debt service mill levy.

Although the council voted to increase property taxes, the city’s overall property tax rate of 2.817 mills will stay the same.

Had the city not renewed the tax, the owner of a home valued at $300,000 would’ve saved $49.50 a year, Finance Director Adam Johnson said.

The property tax, which generates about $1.45 million a year, will fund pay increases for general fund employees. The cityowned utilities will pay for the raises for their employees with fees they generate, and the convention and visitors bureau will fund its raises with lodgers tax revenue.

City spokesman Matt Ross said the city held a special meeting Monday to consider the tax proposal to meet a state deadline to submit its operating budget for the upcoming fiscal year. “The deadline for that submission is June the first,” he said. “Our next regularly scheduled [City Council] meeting isn’t until May 31, so that bumps up against that deadline just a little too closely,” he said. “We want to make sure we give ourselves plenty of time in case any changes need to be made.”

The City Council didn’t make any changes to the resolution, although Councilor Joseph Maestas suggested applying the entire amount of the mill levy to a cost-of-living adjustment — of about 2.7 percent — instead of putting aside part of it for a performance-based merit pool that the city needs to develop.

But Councilor Carmichael Dominguez, chairman of the Finance Committee, said the set-aside gives the city flexibility.

“We really don’t know what this next administration might do or might not do,” he said, referring to the March municipal election that includes a race for mayor.

“We don’t know what a [compensation and classification employee] study might expose. We don’t know what really is going to happen with the next fiscal year’s budget,” he said. “So, the way I look at this is, it’s providing flexibility, not for necessarily this year but for the fiscal year after that.”