CNJ staff photo: Tony Bullocks Cindy Vaughan of Clovis, right, takes her change Thursday from Cindy Arnold, owner of Pet Logic on north Main Street, while purchasing a sweater for her pet Chihuahua Blackie. Arnold said she files gross receipt taxes every month.
Clovis’ mayor hates the idea of a tax increase, but feels it’s the best way to ensure water in the community’s future. A member of the city commission isn’t so sure.
At issue is a proposed .25 percent gross receipts tax increase. The Clovis City Commission can vote as early as Thursday on the ordinance, which would push the gross receipts tax rate to 7.8125 percent, effective July 1.
“The quarter percent we’re looking at,” Brumfield said, “is to help fund Clovis’ portion of the Ute Water Project, nothing else.”
A town hall meeting is scheduled for 6 p.m. Monday at the Clovis-Carver Public Library to discuss the proposed increase. Brumfield said information will be available on the city’s tax rates, along with comparisons to other communities regarding taxes and water situations.
Clovis is the largest member of the Eastern New Mexico Water Utility Authority, which is responsible for the creation and maintenance of the Ute Water Project. The estimated $500 million project would pump water from the Ute Reservoir in Quay County to the authority’s entities.
The cost share is 75 percent federal, 15 percent state and 10 percent to authority members.
“Clovis’ part is $36 million,” Brumfield said. “We don’t have that sitting around.”
The city’s current gross receipts tax is 7.5625 percent, and would jump to 7.8125 percent if the ordinance is approved, effective July 1.
The city estimates it would receive $1.5 million annually from the GRT increase, which Brumfield contends is the most fair way to raise revenue.
“What I’m hearing is good,” said Brumfield, who noted a unanimous vote of approval from the Clovis/Curry County Chamber of Commerce. “People think we need it. They like that it’s shared, and not just on property owners. They want to know what it’s going for, and they want to get a good understanding on their water situation.”
City Commissioner Randy Crowder is hearing a different story. He contended at a Jan. 6 city commission meeting, as he does today, that the city can pay for its obligations by shuffling other expiring taxes.
“I would say there is one group of people who are for it, who don’t understand it’s not necessary,” Crowder said. “There is a large section that are adamantly opposed to any tax increase, and there others that just don’t like government, I guess.
“I’m getting mixed reviews. Because of the way I voted, I’m getting a lot more calls.”
Crowder was the dissenting vote in the 5-1 tally to introduce the ordinance. Commissioners Fidel Madrid, Bobby Sandoval, Chris Bryant, Dan Stoddard and Fred Van Soelen voted in favor, and Commissioner Juan Garza was absent from the Jan. 6 meeting.
Under the tax, a television on sale for $500 would run the customer $537.82 on June 1 and $539.07 on July 1.
But Crowder noted that the GRT hike would also add $400 to the price of an average home in Clovis, which concerns him with military personnel coming in to serve at Cannon Air Force Base.
Crowder outlined what he would prefer to do, using approximate numbers:
• “We passed a tax in 2004,” Crowder said. “By resolution, we dedicated $900,000 a year for water. We can continue with that $900,000.”
Also in that resolution was $97,440 that was not dedicated to anything, Crowder said, in addition to $97,254 from higher-than expected revenues.
• In 2012, the city could use a .0625 percent tax (also called a “one-16th”) currently dedicated to the landfill, and acquire $451,834 annually. The landfill could be maintained by recently-approved rate changes, and there is enough to pay off the approximate $1.3 million in debt service.
• A pair of “one-16th” taxes are associated with Potter Park. Both expire in 2014, and one destined for infrastructure could go towards the water obligation instead for another $451,834. Another is planned for parks and recreation improvements, which Crowder said could be left alone.
“To meet the obligation in the (water authority) finance plan, the city has to have ($13.12 million),” Crowder said. “By 2018, you’d generate $14 million.”
If the commission votes in favor of the ordinance, there is an avenue for citizens in opposition to the decision.
Residents would have 30 days following adoption of the ordinance to acquire a petition with at least 456 signatures to force the question into a ballot. That total represents 20 percent of the 2,276 registered voters in the 2010 city elections.
Such a petition would force what is called a “negative referendum” election, where residents vote in favor of or in opposition to rescinding the commission’s decision.
“Hopefully, it won’t (come to that),” Brumfield said. “If we do, that’s going to be another $30,000 to $40,000 (to conduct an election). This is absolutely the most critical thing in our community right now. Our water situation is dire. It affects everyone.”
If the ordinance is approved Thursday, the 30-day window would run through March 5. However, March 4 is the last business day leading up to that weekend.
“Do I believe there will be a petition? Yes,” Crowder said. “I have already seen the petition document. Do I believe that petition will be successful? I don’t know.”
Brumfield said the money would help pay for small construction at first, and then be used for bonding when bigger bills come.
“We’re going to do the groundbreaking on the intake structure (pumping station) in March,” Brumfield said. “As the authority starts building the pipeline and billing each individual community, we’ll use it for that.”