Property taxes are going up in Gainesville, even while the rate goes down.
After a third public hearing Tuesday night, the City Council voted 4-2 to formally approve a property tax increase to pay off debt and support local parks.
Council members Sam Couvillon and George Wangemann dissented, and Mayor Danny Dunagan cast the fourth vote necessary to break the impasse.
Couvillon previously said that he would rather cut the budget than raise taxes.
Despite the furor that sometimes arises when Hall County government even considers a tax increase, there was little fight from residents in Gainesville.
In fact, Renee Gerrell, a mother of four children in the city school system, was the only resident to speak out against the tax increase during the public hearing.
“I’m frustrated that the city school system has been able to do a full rollback, but yet the city of Gainesville has not seemed to be able to come up with a way to do that,” she said.
Gerrell added that the city needs to find new revenue sources to balance its budget and pay off debt rather than digging into the pockets of taxpayers any more.
Gainesville officials will actually reduce the tax rate to $2.98 per $1,000 of taxable property from $3.02.
But because of growth in the tax digest from reassessments on property values, the city would have to roll back the rate further to be considered revenue-neutral.
Under state law, anything other than a full rollback is considered a tax increase.
A full rollback to $2.78 was seen as too much for a few different reasons, city officials said.
The 7.19 percent increase over the full rollback rate would produce an additional $700,000 to pay for debt and parks, according to Chief Financial Officer Melody Marlowe, who is also serving as interim city manager.
As an example, the annual property tax increase would be an extra $35 for a home with a fair market value of $175,000, according to city officials.
The city’s general obligation debt is about $18.8 million and includes payments owed on the Frances Meadows Aquatic Center, downtown parking deck and lease payments on the old Hall County jail after the Corrections Corp. of America vacated the facility a few years ago.
The city owes $6.52 million on the jail, which it purchased for more than $7 million in 2012.
“It further frustrates me that we are being asked to chip in more for debt service … It was a bad decision (to purchase the jail),” Gerrell said.
These are payments the city cannot postpone, according to some officials, and not paying off the debt right away could hurt Gainesville’s credit rating.
Of the total millage rate, $1.63 will be directed to general government expense, 75 cents toward parks operations and 60 cents to pay off outstanding debt and interest.
Meanwhile, state law prohibits the property tax rate for parks from falling below 75 cents. A full rollback would have put the rate at 72 cents.
“Experience has taught me that once this city gets used to a certain level (of revenue), it’s not going to let go of that money,” Gerrell said.
Hayes named new city attorney
The Gainesville City Council has approved the appointment of Abbot Hayes as the new city attorney.
Hayes will assume the duties in January when James “Bubba” Palmour retires.
Palmour has served as the city’s legal counsel continuously since 1987.
Hayes works at the Hulsey, Oliver & Mahar law firm in Gainesville.