Mission City Council splits over how high to raise property tax to cover street maintenance; seven mill increase approved

Mission_City_Hall

The Mission City Council split 5-3 Wednesday over how much to raise taxes in order to recover from the loss of the city’s Transportation Utility Fee (TUF) to a court ruling earlier this year. The city faced shortfalls in both street maintenance as a result of the TUF ruling and in stormwater debt service.

In the end, it was councilors Amy Miller, Dave Shepard, Pat Quinn, Arcie Rothrock and Jason Vaughn who backed an increase of seven mills in the city property tax rate to pay for the street maintenance program. Suzie Gibbs, Debbie Kring and Jennifer Cowdry voted for a 4.5 mill increase. Mayor Steve Schowengerdt also backed the 4.5 mill increase. The council had debated the level of tax increase in previous sessions, but had general agreement that an increase was required.

Miller gave the most ardent case for the seven mill increase, saying the 4.5 mills was not enough to pay for the city’s street needs. “Seven mills kinds of gets us there,” she said. Miller also advocated for an additional sales tax, that will need voter approval, to invest in the street infrastructure. “I don’t want to raise taxes,” she said, noting that she did not support the amount of improvement to Johnson Drive that was completed last year, but argued the city needed to cover its debt.

“It would be irresponsible and short-sighted of us,” Quinn said, to not raise the money. The 4.5 mills is not enough to cover the costs of the streets. He noted that city surveys have shown residents put streets at the top of the agenda. “I ran on debt,” Quinn said. “I thought the city was in too much debt.” He said the city is now moving in the right direction on debt and has to pay for what it needs to do. Kring said many of her constituents could not afford the higher tax rate.

The council had agreed that the proceeds from the tax increase will be dedicated to street maintenance. The seven mills replaces the loss of the TUF and adds about $100,000 for streets. Besides the regular street programs, the city faces some major projects and the fact that a number of city streets cannot be repaired by overlay, but must be rebuilt. The 4.5 mill increase without an accompanying sales tax would have left nearly $200,000 less in the street funds for next year after the loss of the TUF.

“We know 4.5 is not enough,” Schowengerdt said. He wants to combine that with a sales tax to pay for street work. He called the chances of a sales tax passing “slim” with an increase of seven mills to the tax rate. A quarter-cent sales tax would raise about $550,000, the equivalent of between 4.5 and 5 mills on the tax rate. A sales tax increase requires voter approval and can’t be counted on for the 2016 budget that had to be passed this month.

The new budget also calls for an increase of $5 per month for a single-family residence in the stormwater utility fee. That will raise about $450,000 per year to cover a gap that is being paid out of the general fund this year. That shortfall could be filled in future years if the Gateway development pays its stormwater assessment the city imposed this year.