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City-county tax fight bared - Odessa American: City Of Odessa

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City-county tax fight bared

City’s claim on new county sales tax money strongly opposed by county officials, lawsuit possible

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Posted: Sunday, December 8, 2019 7:00 am

Percolating hotly behind the scenes since last summer, a dispute between Ector County and the City of Odessa over revenues from the county’s new sales tax will be aired in a joint meeting of officials at 1 p.m. Tuesday in the commissioners’ courtroom in the county administration building at 1010 E. Eighth St.

And the dialogue promises to be pointed with $18 million in annual revenues at stake in the city’s “extraterritorial jurisdiction” claim.

In the expansion of a confab that started with a joint meeting last June 11, a raft of city-county interlocal agreements on population growth, fire protection, emergency medical services, mutual use of the county jail, animal control and other issues will also be taken up.

Texas’ extraterritorial jurisdiction law lets municipalities of over 100,000 in population exert some control over property within five miles of their boundaries. For those under 100,000, the limit is 3 1/2 miles.

However, a review of various analyses of the law, including one in fortworthtexas.gov, indicates that that authority is usually applied to questions of special utility districts and subdivisions so that future annexations are not hampered by unwanted developments. There doesn’t appear to be any language specifically relevant to sales tax collections.

As a Texas home rule city, Odessa can enact any laws or regulations it wants unless they are prohibited by state law. For example, the council in August passed a $93-million certificate of obligation without voters’ approval for a new fire station, a multipurpose building for the police department and an animal shelter along with unspecified improvements to city offices, roads, the sewage system and parks.

Ector County Attorney Dusty Gallivan said he was notified of the city’s tax claim by Interim City Attorney Gary Landers before City Attorney Natasha Brooks was appointed last August and that he stringently opposes the cash-strapped county’s surrendering any of its revenues to the much better-funded city, which already gets property taxes, sales tax and utilities funds from water services and garbage services and fees.

“I’m not aware if this has been exerted elsewhere in Texas, but I am absolutely certain that the rules and the law (in the voters’ November 2018 approval of the 1.25-cent tax) were followed,” Gallivan said. “I have no idea what claim they may think they have, but I suppose that if the city wants to try to circumvent the will of the voters, that is their option.”

Gallivan said he is ready to fight the city in court if a lawsuit is filed to take a percentage of the money according to the territory it’s collected from.

Apparently speaking on behalf of city council members Peggy Dean and Dewey Bryant, who didn’t return phone calls, Brooks said the city will assert its position Tuesday but that it does not intend to sue.

“We’re looking forward to meeting with the county to figure out and discuss these issues,” she said. “Our plan is just to have this meeting and converse with our fellow county officials on a number of different topics, including but not limited to the sales tax. The interlocal agreements, some of them old, basically dictate the services we share and provide one another with and we will be working with the county to update these agreements with reasonable terms that we both can live with.”

Told that County Judge Debi Hays, who has been speaking to civic groups about her displeasure with the city’s tax proposal, the four commissioners and Gallivan are feeling very defensive, Brooks said, “We just need to have a discussion regarding the sales tax and how it may impact the city and county.

“I don’t think anybody at the city intends on going to court with the county, but I do think we should have revenue in accordance with the law. We just want to work closely with the county and have a good relationship so that the city and county can both prosper.”

Mayor David Turner said there hadn’t been a council vote to pursue the tax money. “We were just reviewing it and seeing what it was and we had legal take a look at it,” Turner said.

“I can’t comment on it till everybody sits down and discusses it and kind of sees what’s there.”

The mayor said the main interlocal agreements to be considered are those about the jail, EMS and fire coverage. “There’s an entire stack of them an inch thick,” he said.

“Some are 20 years old and need to be reviewed because things change so much in 20 years. We’re looking forward to discussing those and making the changes we need to make.”

Asked if she’d been addressing civic groups like the Rotary Club about her opposition to the city’s tax plan, Hays said, “I have been asked about my feelings on whether or not these funds should be used solely in the county.

“The people voted to tax themselves, which is rare, and my thoughts are that they voted to do three things, improve the roads, help clean up neighborhoods and put more sheriff’s patrol people on the streets,” she said. “So that’s what the money is earmarked for. My opinion is only one of five, but I think the voters have a right to voice their feelings on how their money should be spent.”

Hays said that if the city is able validate its claim, another election should be held for the voters to approve or disapprove the redistribution of revenues. “Until the people tell us that the money should be used for something other than these three things, I’m going to live by my word,” she said.

Precinct 3 Commissioner Dale Childers said, “I think the city is wrong.

“Dusty tells us there is possible pending litigation, but we have a lot of needs and we told the citizens what we would use the money for. We went to a lot of effort to make sure we did everything right and I’m confident we could defend our claim.”

Asked if he was indignant, Childers said, “I have never heard of anything like this ever being done in Texas.

“I feel like we are in the right and we have to spend the dollars in a certain way,” he said. “I don’t know what court it would be filed in, but I do know it would be a district court in Ector County. I don’t know how much the city thinks they should have. We’re doing everything through our attorney.”

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