Council postpones decision on tax hikes

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The Sealy City Council was poised to move forward with utility increases during a regular meeting Oct. 24 but instead opted to table several items and seek more information.

Interim City Manager Warren Escovy reminded the council that it approved Oct. 10 – with Larry Koy dissenting – a first reading of a 7 percent increase on commercial solid waste rates and 10 percent increase for residential rates.

He clarified for Councilwoman Jennifer Sullivan that if the item were denied on second reading, which it ultimately was, the council could then opt to approve 10 percent increases to both residential and commercial rates. Sullivan said she’d been approached by a resident who thought it was unfair that the increases were inconsistent for commercial and residential.

Escovy explained that solid waste is intended to be a “pass through cost” but the city is losing $94,000 per year. City officials plan to attempt to renegotiate their contract with Texas Disposal Systems (TDS).

“We’re basically, in a sense, financing solid waste for now,” he said.

There appeared to be some confusion among council members over the current rates.

“As far as solid waste is concerned, we’re looking at the contract … I think we’re way ahead of the game, as far as I don’t think we’re losing any money on this particular item,” Koy said. “Ten or 7 [percent], I’m not going to go with either one.”

Councilwoman Dee Anne Lerma said that a rate of $20.20, effective Oct. 1, 2017, is a “break-even” point, but even if 25 percent is added to cover what needs to go into the general fund, that would only cost stakeholders $25.25 per month.

Councilman John Hinze said the city is “already charging more than what the contract is stating.”

“I think we need to figure something else out,” Hinze said. “There’s a shortfall somewhere else. We’re paying 25 percent over, which is going into the general fund and we’re paying more than what our current contract is. Where’s the money going?”

Escovy said the city is “starting to move backward” on this matter.

“We have to pay the bills,” he said.

Lerma said based on the information presented Oct. 24, she was not in favor of increasing the rates.

“We’ve been told all along that this is a pass-through rate,” she said. “If it’s now much greater than that, I think I want some more numbers. I want a better explanation. I’ve been led to believe this is a pass-through cost.”

Sullivan requested that city staff bring to the next meeting a chart showing the TDS rate for commercial and residential, what is currently being charged and how the numbers would be altered with a 7 percent or 10 percent increase.

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