By Brett Nachtigall
HOT SPRINGS – An ordinance that would have done away with a previously passed property tax rebate was tabled by the Hot Springs City Council, following a lengthy discussion at the March 1 regular meeting.
The tabled ordinance, known as Ordinance 1226 – which repeals the tax rebate Ordinance 1187 passed in March 2018 – was first brought up at the Feb. 16 meeting, where the First Reading was passed unanimously after a fair amount of discussion. In its original 2018 wording, the tax rebate Ordinance 1187 allowed those who were undertaking new construction or remodeling projects of at least $5,000 to not pay taxes on the city’s portion of those improvements for the first five years after completion.
As noted during the Feb. 16 meeting to explain why the repeal was being considered, Mayor Nelson and others on the council said that while the rebate had good intentions, it did not end up having the desired result to encourage building or remodeling. It was stated by multiple councilmembers that they felt that those who have built new or remodeled since then, and were eligible for the rebate, would have likely performed the work anyway without the possibility of a rebate.
As a result, one of the city’s few sources of revenue – property taxes – has been negatively impacted.
Despite the unanimous passage of the First Reading to repeal the tax rebate, there was some additional discussion on Feb. 16 that foreshadowed the potential issues of doing so, which were delved into at more length on March 1, beginning with comments during Communications from the Public by Duane Cruz, who recently built a new home at 2605 Doran Road.
In his comments to the city council, Cruz said the possibility of a tax rebate was never brought to his attention during the time he was building his new home, which broke ground on June 23, 2018, a few months after the tax rebate ordinance was approved and went into effect.
“If all eligible work is to be approved prior to construction, why wasn’t this brought to my attention as the property owner to be knowledgeable of the program so I can seek more information to accept or deny the tax rebate?” Cruz asked. “How can I decline or deny this opportunity it it wasn’t brought to my attention?”
Cruz pointed to a breakdown in communications from the city to homeowners for the cause of him not knowing about the rebate ordinance.
“I understand there was turnover in leaders and city staff during my application process for permitting, zoning and construction,” he said. “The city staff that has been through this process with me have done an outstanding job in assisting me and my family in building our retirement home and for that I am appreciative; however, I as a tax paying citizen should not be penalized for the lack of information the City was to have been transparent on. Transparency in all City actions should be clear to all citizen no matter their income level, ethnicity, gender, status, religious background, or personal affiliations or relationships with the City.”
“I’m not saying I don’t want to pay taxes,” Cruz added. “I’m saying why are you, the City, hiding or concealing this opportunity for capable community members to build or remodel their homes or structures? Shouldn’t the City provide this as part of the checklist for building permits?”
Mayor Bob Nelson responded to Cruz’s questions and acknowledged that the city did not do a very thorough job of make the tax rebate available to homeowners, but took offense to Cruz’s assertion that the city was intentionally trying to hide it from homeowners.
“I will acknowledge we didn’t do as much as we could have or should have to make it more apparent that it was there, so I’ll accept that responsibility but there isn’t anything that I’ve seen from the folks who were in place at the time, or the council in place at the time or anywhere else that there was an intent to hide or conceal this,” Nelson said.
Other councilmembers also commented, including Debra Johnston who suggested rewriting the existing Ordinance 1187 to target the tax rebate to a specific type of development, for example older homes that need improvements. Councilman Wes Grimes agreed with Johnston and felt the existing ordinance should be reworded but still kept on the books.
Councilman J.R. Huddleston said the failure of the ordinance, in Cruz’s circumstance, sounded like it fell on the back of the City, which did a poor job of communicating it to him.
“I agree, but are we going to back to everybody to built a house since then and ask them if they want the rebate to?” asked Councilman Craig Romey. “We got all the permits.”
“My question would be was the same actions or lack of actions taken for those properties built. Did they not get it at the time of the permitting?” asked Huddleston, to which Romey replied that it would likely be safe to assume, that if Cruz didn’t know, others probably didn’t either.
“It would be only fair to everyone,” stated Romey, in regards to going back and opening up the opportunity to everyone, to which Huddleston agreed.
Councilman Grimes said he felt the responsibility of making homeowners and contracts aware of the rebate ordinance falls on whoever is issuing the building permits, to which Councilman Larry Pratt agreed and said the contractor should have known about the opportunity and then passed that information along to the homeowner.
Later in the meeting when it came time to pass the Second Reading of Ordinance 1226, which would have repealed the tax rebate offering, the conversation picked up again after Councilwoman Johnston made a motion to table it.
Discussion ensued about moving forward with passing the Second Reading of the ordinance to repeal the rebate but then also begin work on creating and passing a brand new ordinance that was similar, but more clearly stated how the rebate process would work and how homeowners could be eligible.
City Finance Officer provided input and asked, “Have you read the ordinance as it exists? Because right now, the ordinance is written as a ‘zero percent rebate,’ that means ‘no rebate’ as it’s written. It’s poorly written, it doesn’t read correctly it doesn’t do the things we intended for it to do. It needs to be revised.”
City Attorney Garland Goff eventually got involved in the conversation and recommended tabling it, instead of passing the repeal, so it remained on the books until the needed revisions to the rebate ordinance could be completed with the necessary changes in relation to Ordinance 1187’s ineffectiveness.
In regards to the topic brought forth earlier in the meeting by Cruz, who built a home but wasn’t made aware of the rebate, Goff said his ability to come forth later and ask for the rebate would require some further investigation by the city to determine who was at fault, which would ultimately come down to a legal question as to whether the city, the contractor or the homeowner bore the responsibility for knowing about the rebate, and whether homeowners can now apply for the rebate after the fact.
Councilwoman Caitlin Turner pointed out that the passage of the rebate ordinance was published in the legal newspaper of the City of Hot Springs at the time in 2018, which was the Hot Springs Star. At least two front page articles were also written about rebate ordinance in the Fall River County Herald as well, notifying the public of the availability of the rebate.
After much more discussion, the Second Reading of the tax rebate repeal ordinance was tabled by a 7 to 1 vote, with the intent to look at the existing wording of the rebate ordinance for possible revisions. Turner was the only one voting against tabling the matter.
The Second Readings of two other ordinances were however passed, including Ordinance 1227 which adds a nuisance description for uninhabitable structures and provides the City Code Official authority to make the determination. That ordinance passed unanimously, while Ordinance 1228 passed 7 to 1 with only Grimes voting against. Ordinance 1228 establishes an Elected Official Code of Conduct and due process procedures for violations to the code.
Earlier in the meeting during Communications from the Public, Councilman Pratt stepped away from his seated position on stage and came before his fellow councilmembers as a member of the public to provide a “statement of personal concern.”
“I am a full blood Cheyenne,” stated Pratt, as he read from a piece of paper and spoke further about his ancestry. “It has come to my attention that a member of this council referred to me as ‘that Indian.’ I find that racial reference personally offensive and overall offensive to the Native American people as a whole.”
“I consider such a statement from a councilmember unacceptable, but since the person that witnessed this was unwilling to sign a statement of what it was said, I can only state this concern as a member of the public,” Pratt said. “If that particular councilmember, or any councilmember, has an issue with me personally or as a member of this council, I invite you to speak to me face to face. Thank you for hearing my concern.”
Neither the council nor the mayor publicly addressed Pratt’s concerns at the time, but Mayor Nelson did reach out to the Fall River County Herald-Star afterwards, in part to address some statements made by individuals on social media which, he said, implied that the city didn’t care.
“Nothing could be further from the truth,” Mayor Nelson said. “It was difficult to sit there and say nothing to Larry during the council meeting, but he and I had a number of conversations concerning how he should handle what had been said. Larry never wanted this to be public but held a deep conviction that he simply couldn’t let the statement go unaddressed, and he’s right.”
Mayor Nelson said the solution Councilman Pratt settled on was to make a simple statement to the Council, as a member of the public, and then return to representing the constituents that elected him to Ward 1.
“He never wanted it to be more than that. That’s the true character of the man,” Nelson said. “Personally, I thank the Council for honoring Larry’s wishes and am proud to serve with them.”