Cottonwood’s City Council meetings are not usually the most popular event in town, but at two on May 8 and Thursday, May 10, the small City Council chambers were packed.
The City Council is debating a sales tax increase and many wanted to make sure their voices were heard.
In addition to a presentation by the city’s budget manager, Kirsten Lennon, the council heard from groups that receive grants from the city, including the Verde Valley Humane Society, the Old Town Association — itself in financial trouble after losing tens of thousands to fraud a few weeks ago — and the Verde Valley Senior Center, arguing that their services were necessary and could not afford cuts, warning of the potential for more stray cats and unfed seniors if the funding to prevent it were lost.
Government departments like the police, fire, public works and magistrate court argued that, after years of post-recession austerity, they needed budget increases to pay for new equipment and increases for competitive employees, since they were losing many of their best staff to better-paying communities nearby.
Ordinary residents also crowded into the chairs in the audience, bearing matching signs, encouraging the council to raise their taxes. Periodically throughout the meetings, the group would hold up their white cardboard signs, across which were written “Say yes to .65%!,” encouraging council members to not just raise Cottonwood’s taxes, but do so emphatically.
“We’re not advocating a hike in city sales tax just for the fun of it,” said Terri Clements, a de facto leader of the group advocating for an increase. “It’s fiscally irresponsible not to do it. We have to do it to get ourselves back on a prudent fiscal road.”
Clements, a frequent visitor of the Cottonwood Recreation Center, got involved in seeking an increase in city revenues in November, having sought maintenance for the rec center’s tennis courts but discovering that the city’s budget lacked the funding.
Since then, Clements has been organizing like-minded friends, including a group of pickleball players at the rec center, to advocate for an increase that would allow for the city to not only make up for budget cuts, but invest a more fiscally solvent future.
“If we have no reserves and no deferred maintenance, we could be in good shape,” Clements said. “If we haven’t paid our liabilities, it’s going to be really nasty.”
Discussion of increasing the city’s sales tax above 3 percent began at the meeting two weeks before on April 24, when Deputy City Manager Rudy Rodriguez presented the council with the city’s budget, including a deficit of more than $1.5 million and an argument that after years of belt-tightening, there were not many cuts left that could make up the shortfall without impacting services.
The council came around to the idea of a modest sales tax increase, discussing 0.25 percent or perhaps 0.5 percent, which would still keep the town’s tax rate lower than most nearby communities. The Camp Verde rate is 3.65 percent and Sedona is 3.5 percent, with only Clarkdale joining Cottonwood down at just 3 percent.
By the end of Thursday’s meeting the idea of a larger increase and using the raised revenues not just to fix shortfalls in government agencies but to save money for the future, invest in maintenance and infrastructure and pay down the city’s pension liabilities, took hold.
Councilwomen Linda Norman and Karen Pfeifer explicitly endorsed a larger increase of at least 0.65 percent or even a whole percentage point.
On the other side, Councilwomen Deb Althouse and Tosca Henry, while not ruling out an increase, declared intentions to keep it below 0.5 percent and only if it could be accompanied by cuts to some aspects of the city’s spending, especially the proposal to build a new City Hall.
“I’ve still had people yesterday and today come up to me and say, ‘I can’t believe you’re going to raise our sales tax and build a city hall,’” Althouse said Thursday. “This is an issue. I’m not necessarily opposed to a sales tax increase. I’m opposed to the 0.65. I think it’s too high.”
In addition to the sign-waving activists, others are rallying opposition. Michael Mathews, a local real estate agent running for council in the fall, posted to his Facebook page that he feels city budget cuts were being weaponized to seek revenue increases rather than as reason for needed financial accountability. He called for residents to come to future meetings and advocate against tax increases.
“The city management and staff are lobbying hard for tax increases, stating that all departments are cut to the bone,” Mathews wrote.
Clements disputes Mathews’ contention, pointing to funding shortages. She agreed there were significant savings to be found in the city budget beyond cuts, focusing on employees she felt were overpaid compared to similar communities, like the city attorney and clerk.
Still, Clements argues that making these cuts should not stop the city from raising revenues that could allow for future investment and long-term fiscal solvency.
“If the council is brave enough to do what is right, then there’s a lot of people who would be supportive,” Clements said. “We’ve been quiet too long. We’ve been on the sidelines sitting and watching.”
Mayor Tim Elinski, Vice Mayor Kyla Allen and Councilman Ruben Jauregui remained silent on their stance on the potential increase until after seeing further details from city staff of how the money would be spent.
Jon Hecht can be reached at 634-8551 or email jhecht@larsonnewspapers.com
