City Commission - Regular Meeting

And this morning I'm going to ask Commissioner Brock.

Thank you. Let's pray. Lord, thank you for this day. Thank you for this wonderful community that we live in. Give us understanding and strength to make decisions that are in the best interest of this community and serve your will. In your name we pray, amen. Amen.

Glad to see everybody here early this morning. And to get things going, I'm going to ask the clerk to please call the roll.

Yes, sir. Mayor Bojo. Here. Commissioner Robinson.

Here.

Brock. Here. Cochran.

Here.

Beaman. Here. Fisher. Here.

Here.

Hickson. Here. Collins. Here.

Mr. McDaniel is not feeling well this morning, so he won't be with us. First on our agenda today is to make approval of the 2025 budget revisions, and I'm going to call on Tony Reinhart.

Good morning. Good morning. We had a finance committee meeting last week and went over this and quite extensively line by line. The state requires as part of our end of year process to meet some budgetary requirements that a revision be made to the budget before reporting is done for the year. If any general fund department is over budget or any special revenue fund. We only had to make changes in general fund and in the community development fund And some of the changes, actually, we went down to cover some of the departments that went up. So also, we have to, for reporting purposes, combine a few funds into general at the end of the year that have their own budgets in their specific departments, but because we have to move them into general, it requires a budget revision and amendment. That was recommended through finance, and I will let... Mayor Pro Tem, take it from here.

Yeah, thank you, Tony. Yeah, all the revisions were pretty clear. The finance department always does an incredible job, so I'd like to make a motion that we approve it as submitted in the committee. Second.

All right, we got a motion and a second for approval. Any comments?

Just that our director also brought us up to date on the funds for the water treatment plant that's coming forward. Everything looked really good. With that, we had a nice meeting.

Thank you, sir. Anyone else? Yes, were there any adjustments made during the year? We did not make any adjustments. Okay. Second, does anybody else except the people on the Finance Committee have a copy of this? Okay. I personally, just me, am not going to vote on something I haven't seen. I understand, and I appreciate that. Thank you. I just don't feel comfortable personally doing that.

Going forward, could we possibly make sure that that happens? Mr. Pro Tempter. Sorry about that, Commissioner Cochran.

Mr. Cochran.

All right, Mr. Clerk, if you'll call the roll. Sir, Commissioner Robinson?

Yes.

Brock? Yes. Cochran?

No.

Beeman? No. Fisher? Yes. Dixon? No.

Collins? Yes.

Mayor, have four yes votes, three no votes.

I'll vote yes. Next on the agenda, we are going to look at the L hosts. We need to... Thank you. City Manager is going to hand out some information.

So... And thank you, Mayor, for passing those out. And so... You all inevitably recall we had a lot of conversation about House Bill 581. We talked about the floating local option homestead tax, and that actually went before our voters and was not successful. And then we had Senate Bill 33, which created the homeownership opportunity and market opportunity Equalization Act of 2026. And so if you saw last week, our partners across over the street, Floyd County Commission had decided they would pursue an L-host, as it's called, this new local homestead option sales tax. And so one of the things that we hear probably most about is folks generally do not like property taxes. And so I think it is safe to say we, we hear that, we know that we understand that. And so what this L host is and is, and it's similar to what the floss was the floating local option, but the difference is this completely is required to go towards the homestead property tax. So for those taxpayers who are in their homes paying property tax, what this would do, it would give us, assuming this was placed on a ballot this November, to create a net new one cent sales tax. And so that would generate net new revenue Well, that revenue is not just added to city County budgets. The revenue is required to offset the amount of money that is generated from homestead property tax. And so, um, this act requires a local act by our general assembly. And so our delegation, um, has, we've had conversations with our local delegation and they're very interested. Specifically, Senator Huffstetler has got something in mind on this particular bill that he would like to see some changes on a state level. And so the idea for Senator Huffstetler is to get this amendment so that the tax collection actually would start January of 27th. meaning we would have immediate relief for property tax owners here in our community. And so that is one key difference from when we were considering the FLOST previously, back in the last time it went before our voters. So that's a little completely different. a different animal because I think at the time there was this notion of, um, you're paying the money additionally and it would go into the fund. And so now the way this would theoretically work, uh, based on our understanding, let's assume, um, there, there's no intergovernmental agreement. So the County and the city do not have to come to any kind of terms. The County would have to approve this. It would have to be approved in the County. And if we would like to participate, we would have to approve here. So that's where we start with this simple resolution. And so basically what we would be saying is we want to give access to the voters to make this decision. And it's at the end of the day, it comes down to, do you want to create an additional one cent tax that would then have to be used to offset the property tax. So in this case, let's say we get a new penny. So the new pennies being collected, the tax commissioner would then be required to go and do the calculations and say, okay, Here's how much homestead property tax is in the city of Rome, and then here's how much is in Floyd County. Now, we're studying these numbers, finance and then, of course, the county. We think our guesstimate is probably somewhere around the $15 million mark combined that would be the homestead property piece. So let's just use hypothetical numbers. Let's say it's $15 million... that our taxpayers are paying in homestead properties. And then let's say we've got a net new penny. Let's say that new penny generated $20 million. So in the initial 15 million gets offset so that if I'm a taxpayer and I live in the city, the portion of my city property tax and the portion of my County property tax would go away. And then there's excess money. So again, back to my example, if there's another $5 million that's been generated, once the homestead tax has been made whole, then it would apply proportionally to the non homestead. So commercial industrial and others. Now, obviously this, the penny would not generate enough to cover all of our property taxes. But the additional would get applied to non-homestead. So whatever that number shakes out to be, in my understanding, it probably isn't a dollar for dollar in terms of the city gets this much dollar and the county gets this much. I think it's more proportional. So it could be that we each get a X percent decrease in the non-homestead is kind of how I understand that. But the key point to this is if this starts today, that we say, yes, General Assembly, we want to pursue this through a local act. We're asking them to create the opportunity so that then it could be placed on the ballot for our voters to decide. And I get it. Some folks are going to be opposed to an additional sales tax. I understand that. The thing that we hear the most about is property tax. And so this is a unique opportunity because, as we all know by state law, we don't have a lot of revenue opportunities to offset how we pay to provide government service. And so this is a new tool that we could simply do that. And, again, if you don't hear anything else I say, please hear. the law requires that this money go to offset property tax. So this isn't net new money for the city or net new money for the county. It's simply going to replace the property tax piece and how we use that to fund government. And with that, Mr. Mayor, I'm happy to try to answer questions. And Tony, if I've left anything out, feel free to jump in, please.

Questions from my end. Similar situation came up went to the voters and was voted down and it was due in my opinion basically because of clarity i heard you explaining questions i got over the weekend was like tell me what makes you a homestead taxpayer That's my first question.

Okay, so as a city resident, if you reside in city property that you own and you have applied for that to be your primary residence where you receive your homestead exemption, then you are the target audience here that we're talking about.

As defined by the assessor's office. Right. Would you have to sign up for that?

Yes. Yes. Everyone has to. Yes. And we, you know, again, everyone.

Wait a minute. Let me quote.

Sign up for what?

For the homestead? Yes. Yes. So you have to go down to the taxpayer's office and tell them that I own my own property. This is my primary residence. Can't be your property that you rent, et cetera. Is that correct?

That's correct.

That's your primary. and you have to be a certain age to qualify for that.

No.

That's a property. That's right. And your primary resident. Make you eligible to go down and sign up for a homestead. That's correct. And that's open to anybody.

That's correct. We encourage everybody if they've not already signed up. And you only have to do it once.

You don't have to do it every year.

All right. My next question that I heard a lot of is, We heard a lot of talk when we was building this new school, et cetera, and the importance of the e-splash tax. Could you clarify as to when did it come up and when does the next splash possibility come up? How many years are we out or how many months are we out?

Yeah, I did not look those up before this morning, Commissioner. Do you remember the dates? I feel like 2020.

29 on e-lost, Joe?

Yeah, so there's a little time, I guess, before we would theoretically see another referendum on the ballot, if that's your question. I did not say that. If enacted, this would be collected for a period of 10 years.

That previous was a shorter time frame, wasn't it? It was fine. Wasn't it fine? Mm-hmm. Yeah. Phil, you do have Homestead, by the way. I just checked your file.

Well, it was more of the questions that were coming to me. I'm trying to express to the citizens because of the fact the opportunity we missed last time, I think the county wrote to him, we did not. And with them having to, I'm assuming their father is here, if we go ahead and do the resolution, that'll put us in.

I didn't say this, but this is an either-or. You can't do L-host and floss, so it's one or the other. And so by us going toward a L-host, then we're saying we would not be trying to pursue a floating local option, again, where you've got to do the intergovernmental agreement, come up with a revenue split, et cetera.

Bill, like you said, though, the negative the last time was that the time frame was going to be like two years before people realized the benefits. not this one, so this one's much quicker and much simpler.

Mr. Mayor, what is our current tax on the dollar now? Is it seven, eight, nine, or what is it? Seven. Seven? Seven, that's right. That's all the questions I have.

Just, Sammy, one point to clarify.

my understanding this would not have an impact on city or county school taxes that is correct you are correct in that i have a question regarding how it's actually calculated in other words one thing i read said for example if you have a two hundred thousand dollar house and you have a five hundred thousand dollar house of course the two hundred thousand dollar house would be assessed at eighty thousand dollars the half million dollar house would be assessed at $200,000. At that point, would a certain amount be reduced from each house in terms of homestead? In other words, would $50,000 be reduced from each? And so the person with a half a million dollar house is getting the same tax break as someone with a $200,000 house? Or is it proportionate to how much you pay or the value of your house? Because from what I'm reading, it's a flat fee. In other words, everybody gets the same benefit. It doesn't adjust based on your property's value.

What I've understood, Commissioner, that's a good question. What I've understood is, you know, in our situation, maybe it's a little different because we envision the penny would generate enough to cover the complete amount on the homestead. But then the non-homestead would begin to be the question of how does that work? And I think I was looking back at the language earlier. it actually refers property tax relief for homesteaded properties first, followed by general rollback if the funds are sufficient. Homestead exemption and additional rollback determined by formula based on revenue derived. And so my assumption is the tax commissioner then makes the determination. And so that's where I think once the homestead is determined, is made whole then it would probably be some sort of formula to say both city and county got x percent so not necessarily the same amount but maybe the same percentage of decrease in the millage and so so but the intent here is from what i'm hearing is to completely eliminate the homestead tax correct correct which again i think is what we to me it seems like a very good tool because we hear more about the mom and pop situation of property tax and anything that we could do to find relief there. So that's why I think this is a great tool.

And so currently the, the way the it's written is it starts collecting in January of 28, 28, 28 settlers trying to get it right.

And in our conversation with Senator Hustler, he, you know, we even can't candidly had that conversation and he didn't, you know, his thoughts were, yeah, it probably wouldn't make sense. unless we get it amended for y'all to move forward. And so he's very anxious to get the amendment.

But currently the way we're voting on it now is 28.

Well, right. Within the current law it's 28, but the understanding is we all want to push for 27. Yes, sir. I'm sorry.

I guess that probably goes back to we're just putting this to the voters. Will the voters know that?

That's a fair question.

I don't want to speak for Senator Huffstetler in maybe the American way, and my hunch is he was hoping to get that accomplished in the special session, which we would obviously know before ballot time in November.

So another question is, you know, with the floss, people were practically being double-taxed, especially those with mortgages who had to escrow their mortgage for ostensibly two years. With this, it sounds like the relief is applied in August? Is that correct?

Six months.

Six months. And so tax bills go out in November. The first six months is collected, and then that six months is applied. Let's say that Hubstetler is, and I hope he is, successful in getting it moved to 27. So collections start in January of 27. For that particular fiscal year, they stop at the end of July, beginning of August. And that amount of money is applied towards the homestead in that 27 months. Tax bill. Correct. Okay.

Yeah, immediate. And then the following year, you'll have a whole year of collections to go against your tax.

Right. Ostensibly, though, somebody with a mortgage, instead of two years, is still a year and a half, more or less.

You get a break after the six months.

You'll get a break after six months. You'll get a break after the six months, but if you have a mortgage that's already escrowed, you're paying the full amount.

Get it back. You do get refunds on your escrow when you're overpaid.

Eventually.

Yeah.

So, but a year and a half before you get that refund because they won't know what the new tax rate is until a year and a half later when they get the new bills in September. So, just once again, that's something to consider. I'm not saying it's a deal killer and it's better than the floss.

Yeah.

But... It's just something to consider and so the other just final comment and I understand the special session But man, this is a whole lot to swallow In a very short amount of time and it's not very fair to any of us up here to have to do that well, and I'm thinking that Senator Huffstetter feels the same way because He was invited to be here this morning.

He's actually out of the state doing something for this before the state but

yeah i i think that what was our cutoff date is the 16th i mean and that like came out well as i understood there was an advertising requirement by the 16th and so so it kind of got thrown yeah yeah but it's very fast and furious very fast i did not see a special session coming either so no idea what the results of that will be but At the end of the day, for us, if we want to attempt to engage this as a tool, it does come with that risk. But again, I think our voters, you know, full disclosure, the voters are going to know by referendum day if we're going to have, you know, a 27 or 28 start time.

Yeah, that's, to me, that's the, maybe all the details aren't here. Right. By the time, we're just allowing the vote. Correct. Right. That's right. By the time. the vote happens, you know, the intent is all the information will be provided. I mean, it's not that we're voting on what we're aware of today. We're voting on when all the information is available.

That's the real vote.

Yeah, the voters. Ours is minuscule.

I agree. It still seems like, though, we're voting on a bill to find out exactly what's in it.

All we're doing really this morning is allowing it to go on the ballot.

I know.

And like Commissioner Brock said, all that will be cleared up before November. Actually, it should be cleared up when they start. Maybe they start session on the 16th. I think. Anyway, the special session. I think the 17th is their beginning, if I'm not mistaken. Hopefully by the end of that, end of the session, we'll have answers to all the questions that everybody has.

I don't think I mentioned this, but it is possible that the county could approve this and the city not elect to participate, so then the city homeowner would simply get the savings piece from the county portion of taxes, but not the city portion. So that is possible, but we could approve it, and then if the county didn't approve it, then it doesn't exist.

So these effectively work like... municipal and county elections the county can vote to do it the city cannot vote to do it and vice versa or all together or all none that's right that's yeah any other questions happy to try to answer i'd like to make a motion that we uh approved to put it on the ballot got a motion a second and a second we've already had discussion

Mr. Clerk, if you'll call the roll. Yes, sir.

Commissioner Robinson? Yes. Brock? Yes. Cochran? No. Beeman? Yes. Fisher? Yes. Hickson? Yes. Collins? Yes. Yes, sir.

Okay. Thank you. Thanks, everybody. Do we have anything else that needs to come before the commission this morning? Nothing for me. All right. If not, we are adjourned. Thank you.