Five months after passing an ordinance establishing the Sandy Hill Special Improvement District, council members debate the wisdom of taxing residential homeowners in the area to fund the district’s budget.
A $110,000 budget to fund the district’s operations — extra security and general maintenance — was before the council during Tuesday evening’s deliberations. “I don’t believe the budget has enough capacity to actually do effectively what they plan to do,” remarked Kenneth Morris, councilman at-large.
“$110,000 isn’t going to cut it, I think you have to put extra dollars in there,” said Rigo Rodriguez, councilman at-large, agreeing with Morris.
The district seeks tidy up sections of Summer and Market Streets, East 18th Street and Park Avenue by bolstering security with private guards and implementing a graffiti and litter removal program to clean up quite possibly the grubbiest section of the city.
Julio Tavarez, 6th Ward councilman, stated that the budget was for the remaining six months of the year. Morris pointed out that the budget document in front of the council does not mention six-month, rather it simply states 2014.
Morris pointed out other issues with the document, including missing names: the document has signatures of five district board members without printed names.
Edward Paulino, director of the district, affirmed the budget is for six months. Paulino stated that the full year budget will be double that amount. Money to fund the district’s budget comes out of an extra tax on area property owners which Morris described as a “dual tax.”
“In a year, I believe they will pay $80,” explained Tavarez. “$80 to have police walking around, to have folks help in cleaning the area.”
Morris said the area taxpayers are already paying for these services in their current taxes. “The residential property owners are already being taxed for the services this district is supposed to provide,” said Morris.
Despite big tax increases – the most recent budget contained on average a $1,000 tax increase — residents seldom see extra services.
Tavarez added that residential property owners are paying half as much as business owners. He also stated that most of the properties within the district’s boundaries are multi-family units, where at least one or both units are being rented.
“Most of them are two family homes, and some of them are being rented, so there is a financial benefit for some of these homeowners,” said Tavarez.
Morris, who often votes against tax increases, said not only are the area property owners being taxed twice they are also being taxed without any representation in the organization.
“They’re being taxed with no representation in so much they are not being asked, they are being mandated to pay the tax,” commented Morris. “This board is totally made up of business owners, but they are asking for contributions from residential property owners.”
Indeed, all five members of the district’s board are business owners. Paulino said the district was planned and put together by business owners which is why the entire board is comprised of them; however, in the future he intends to increase the size of the board to include residential property owners.
“Going forward, we would like to amend the enabling ordinance so that there’s more representation, as far as numbers, and diversity,” said Paulino.
Tavarez issued a rejoinder to some of Morris’ comments stating that they are contradictory. Morris wants to exclude homeowners or include an opt-out clause which would shrink the total revenue coming to the budget yet he is stating there’s not enough money to render all the services the district promises to put in motion.
“You’re saying two things that are contradictory,” asserted Tavarez.
Morris said he is not unfairly stymieing the district’s budget, but that he is concerned the double taxation will result in property owners heading to court demanding the end of the dual tax structure that is not found anywhere else in the city.
This improvement district is truly more special than the other two in the city – the Downtown and Bunker Hill Special Improvement Districts — because it includes residential property owners. The other two only include business owners.
Tavarez, who represents the area that’s included in the district, said he has tried a good number of ideas in that area which is infested with gang members, drug peddlers, and stabbers, and nothing has worked which is why a radical solution is needed.
“Let’s give these folks a chance to try something that hasn’t been done that is a modification of something that’s worked,” said Tavarez, who is hoping the district will improve public safety in the area.
Tavarez called the inclusion of residential homeowners innovative, and once it becomes successful in the city other towns in the state are bound to use the city’s 3rd improvement district as a model. “This one can be a module duplicated around the state,” said Tavarez.
Tavarez beseeched his council colleagues to give the district a chance. “They’re going to clean this area,” said Tavarez, “and what I’m asking is to give them a chance.”