City may raise gross receipts tax next month

The first time the Clovis city commission meets in February, it can vote on an ordinance to increase the city’s gross receipts tax rate. That’s because the first time the commission met in January, it approved the introduction of that ordinance.

A .25 percent increase could be voted on as soon as Feb. 3, and would take effect July 1, and provide approximately $1.55 million annually to help the city pay its portion of the Eastern New Mexico Water Utility Authority financial plan. The authority is in charge of building and operating the Ute pipeline project.

The introduction passed at the city commission’s Thursday meeting on a 6-1 vote, with Commissioner Randy Crowder voting no. Commissioner Juan Garza was not in attendance.

The city’s current gross receipts tax is 7.5625 percent, and would jump to 7.8125 percent if the ordinance is approved. For example, a television on sale for $500 would run the customer $537.82 with taxes on June 1 and $539.07 on July 1.

Mayor Gayla Brumfield, who only votes in the event of ties, said previous commissions have designated gross receipts tax money to the project, including when she was a commissioner in the early 1990s. She read minutes of those meetings, and noted that former Mayor David Lansford said that this type of vote would come after the project received federal authorization.

“It was very clear that this (previous) commission thought the same thing,” Brumfield said. “Our water situation is dire. This is something we cannot put off.”

Crowder said he didn’t so much have a problem with the increase, but preferred monies go toward road improvements because that’s what most constituents call about. He said current funds provide $1 million annually for the project, and will do so for the next five years. He would prefer that expiring taxes for the landfill and Potter Park pool be applied to the water project instead.

City Finance Officer Don Clifton said the financial obligation jumps as high as $2 million and $3 million around 2018, and the GRT increase would help accumulate the money in advance and free up money for roads.

Though he did vote against it, Crowder requested, and received, additional language in the ordinance that would allow the money to be used for payment of bonds. City Attorney David Richards said that change made the legislation more useful.

Tim Ashley, a former county commissioner, said the city needs to be careful when it comes to raising taxes.

“Carefully weigh where you can go in cutting spending and obligations (to offset the increase),” Tim Ashley said. He noted the overwhelming margins by which voters rejected tax increases to make what he said were sorely needed county courthouse and county jail improvements.

The commission can send the matter to the voters for a special election, which would cost at least $30,000, Richards said. An election could also take place if the ordinance is approved. Voters would have 30 days after passage of the ordinance to acquire a petition with at least 456 signatures — 20 percent of the 2,276 voters in the 2010 city elections. That would force a “negative referendum” election, where voters could rescind the commission’s decision.

Also at the meeting:

• The commission appointed Terry Randall of Xcel Energy to the utility representative position on the planning and zoning commission, and re-elected Tom Martin and Brett “Bud” DaBell to the other two contested positions.

• Resident Gloria Wicker said she has read reports of a potential city plan to purchase the Colonial Park golf course and convert the current Municipal Golf Course into recreation areas.

Wicker, a former city commissioner, said she was against such a move, and would prefer such recreation areas be put elsewhere.

“It is beautiful, I drive by it all the time,” Wicker said. “I don’t want to see it gone, I don’t want to see it changed.”

She also said she would like to see the pool at Hillcrest Park fixed, and noted the wall, built as a Works Progress Administration project in the 1930s, has landmark designation.

• The commission approved a resolution in support of the “hold harmless” provision the state has that protects municipalities from lost gross receipts revenue on groceries and certain health care services. City officials estimate that revenue at $2.5 million annually.