Residents Unhappy With Mill Levy Tax

Española property owners started paying a new tax to the Upper Rio Grande Watershed District this month, however, exactly how Watershed officials plan to spend the money is unclear.

The Watershed District Board of Directors held off on passing a resolution, July 8, to approve their budget for Fiscal Year 2017, which started July 1. Two days earlier, their mill levy was expanded into the Española city limits and lowered from 2.5 mills, to one, by the East Rio Arriba Soil & Water Conservation District, which supervises the Watershed.

A mill levy is a property tax imposed by a local government, such as a Watershed District, to generate revenue. The Watershed’s tax adds $1 to a property owner’s tax bill for every $1,000 of assessed property.

Chairman Alfredo Montoya said the Board will either hold a special meeting this month to meet the state’s July 31 budget deadline, or ask for an extension. Cities, counties and special districts are required to turn in a final budget, cash reserves and a fourth-quarter financial report to the Department of Finance and Administration by then.

“We need the projected revenue for this fiscal year,” Board member Joe Romero said.

Montoya said the Board will have to wait.

A pending Inspection of Public Records Act request asks Watershed officials to provide a budget for Fiscal Year 2017 and a full accounting of their expenses since the mill was originally levied on parts of the Watershed in 2015.

The request also asks for documents that should show that the Watershed submitted to the Department, June 1, an interim budget and a resolution to change the mill levy.

The change to the tax places property owners living within the Española city limits on the Rio Arriba County side, on the Watershed’s tax roll.

That property falls within the Watershed’s boundaries, but was excluded until now because of conflicting language in the information used to assess the tax, Rio Arriba County Assessor Levi Valdez said.

“The County Assessor poisoned the discussion by making it about the mill levy,” Montoya said to the Board.

In a letter to Watershed officials, Valdez wrote, “The mill levy was suspended in 1985; please indicate the state statute which allows the incorporation of the mill levy after 30 years without a new election?”

According to Rio Arriba County valuation data published May 10, adding Española property owners to the tax will generate about $60,000 for the Watershed during Fiscal Year 2017.

The records request also asks for a budget for this fiscal year, to determine how that money will be spent.

Montoya has said the lower tax rate will help his organization raise the nearly $200,000 they need to fund the various erosion control and arroyo clean-up projects.

The projects will help ensure the water feeding the various communities remains clean, he said. The money will also be used to secure matching funds needed for future projects.

The El Llano, Fairview and Ranchitos areas, within the city limits, are all included in the tax. Two Española citizens addressed the Espanola City Council, June 28.

They argued that the tax wasn’t necessary and asked how Montoya planned to use the funds.

Nancy Gardner said she tried to get property removed from the Watershed, but she needed 4,000 signatures on a petition to do so.

“They just keep expanding, and there’s no law to stop them,” Gardner said. “The original act was to save the watershed and the farmlands. We have no acreage in this city that can qualify, not only for this district, but for the district that supersedes them. None of us can qualify in the city limits.”

The Watershed made about $160,000 in property taxes during Fiscal Year 2016, according to a transaction detail record presented on July 8.

Gardner said the only things the Watershed has to show for all the money it received last year are plans, trainings, conferences and travel expenses.

Dale Livermore, a local realtor, said there is a need for the kind of work the Watershed does, but not within the city limits.

He said local governments are already supposed to deny permits for buildings proposed for flood zones to prevent against the type of danger the Watershed is warning.

Livermore also said the tax will discourage new businesses from moving into Española. According to the New Mexico Tax and Revenue Department, Española has the highest Gross Receipts Tax in the state, at 8.56 percent.

“If you guys (city councilors) are thinking about joining this, I think it’s a bad idea,” Livermore said. “I think it hurts the Valley and I think it hurts the residents.”

City Attorney Frank Coppler argued that the city should be exempt from the Watershed because the city boundaries do not physically touch the Watershed District’s boundaries, since Ohkay Owingeh pueblo land sits between them, and they did not consent to the tax.

However, Coppler discouraged city officials from seeking relief through litigation because it would take too long, and instead encouraged them to lobby state Rep. Debbie Rodella, D-Rio Arriba, Santa Fe, Taos, to amend the Special District Procedures Act in order to allow for a vote to modify or dissolve the Watershed.

The Act currently exempts Watershed districts from such elections, he said.

Montoya defended the need for the tax before city councilors, and after hearing his presentation, they pitched project ideas to him, including flood prevention in El Llano and on McCurdy Road.

“Since we all live in a watershed, we all play a role in its management,” Montoya said. “Because of the importance of water, especially in the Southwest, and in our area, especially, watersheds and the functions they perform are critically important to all of us.”

During the July 8 meeting, the Board also chose not to hire a project manager, even though they discussed their two unidentified candidates in a closed meeting for 50 minutes.

Montoya said the project manager is needed to oversee inundation mapping and renovation of dams and flood control structures inside the Watershed.

With a lower tax this fiscal year, Watershed residents who have already been paying the 2.5 mills will end up getting a tax break.

According to the 1962 referendum documents that established the District, the most Watershed District officials can levy is five mills. About 62 area residents voted to approve the measure when it was introduced.

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