Farmersville puts utility tax promotion on back burner

Farmersville City Council denies partnering with political consultants to promote utility user tax on 2024 ballot, recommends staff bring it back at later date

FARMERSVILLE – Farmersville City Council decided not to collaborate with outside consultants to promote a utility user tax, something the city hopes to make use of after the 2024 election to aid the growth of the Farmersville Fire Department.

The suggestion was denied at the Farmersville City Council meeting on Oct. 24, but it will likely be brought back to council at an unspecified later date. According to Farmersville city manager Jennifer Gomez, revenue from the utility user tax (UUT) would go towards helping the city’s fire station grow so it meets state and federal standards and supplies Farmersville with proper coverage. Since fire personnel are paid for through the city’s general fund, the costs quickly add up, and Gomez said the city could use the additional funding.

“For us to be able to expand the fire department in the next five to 10 years, we need that additional revenue,” Gomez said.

Although it has not been decided yet, Gomez said city staff would recommend the tax work as a general tax rather than a special tax, since a special tax is only focused on using money for one thing and a general tax can be used across a variety of services. Not only is fire personnel paid for through the city’s general fund, but a general tax needs over 50% of voters to support it to pass, whereas a special tax needs a two-thirds vote. 

The contract would have the city collaborating with three organizations to poll for the UUT: Lew Edwards Group; Fairbank, Maslin, Maullin, Metz & Associates; and The HdL Companies. All of them are organizations that help cities by reaching out to community residents and educating them on things like the proposed ballot initiative. They would also help the city determine how much the UUT could cost taxpayers.

“They would assist through the entire process,” Steve Huntley, the city’s director of finance and administration, said. “If the initiative were successful, they would help us to administer this tax afterwards, as it is one of the more complicated taxes that you have to administer.”

The collaboration would cost the city $234,200 over the span of three years. However, the partnership would proceed in phases with both the city and collaborating organizations having the option to cancel the agreement at any time.

According to Huntley, the city is interested in bringing in the partnering organizations because the city has had difficulty with the UUT in the past. Mayor Paul Boyer referenced the city’s attempts to generate revenue through the UUT in the 1990s, when the city council could make decisions without going to the public, and said it ended with some council members being recalled. He said this tax is different from other taxes because Farmersville residents understand they are the ones paying for it, which could make it difficult to pass on the 2024 ballot. 

Although he thinks the first year of the collaboration could be good if it yields positive feedback, he said he is hesitant to spend money from the general fund on a ballot initiative that may or may not pass.

“I think it’s going to be a challenge,” Boyer said. “I’m not saying we shouldn’t try to do it, but I think it’s one [that] hits home more.”

According to Huntley, the average UUT rate across the state is about five percent. The UUT would be generated based on things like cell phone and internet use, after a change to the city’s code to allow the change. According to Huntley, the tax was once supplied more so through landlines and telephone service, but with technological advancements evolving throughout the years, this is no longer achievable. In addition to cell phone and internet usage, revenue for the UUT would also be supplied through electricity, gas, cable television, water and sewage.

The suggestion to collaborate with the political consultants was denied with a 2-2 stalemate, with councilmembers Gregorio Gomez and Tina Hernandez voting in favor while Mayor Boyer and Councilmember Danny Valdovinos voted in opposition. Councilmember Ruben Macareno was absent from the meeting, so council recommended bringing the item back when all five council members are present to vote.

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