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City cuts millage tax, purchases new police cruiser amid vehicle shortage

by J.D. Bailey on 10/26/21

Magnolia property owners are set to receive a bit of tax relief next year, after the Magnolia City Council on Monday passed a measure eliminating the city’s 1.5-mill general fund tax for the year 2022.

The financial levy, which passed unanimously by present Magnolia City Council members Larry Talley, Jeff White, Tia Wesson, Jamie Waller, Steve Nipper and James Jefferson, came after Magnolia Mayor Parnell Vann informed the board that the city no longer required the additional 1.5-mill tax to bolster the city’s general revenue fund.

“We told the voters many years ago that when we didn’t need it, we wouldn’t take it,” he said about the general fund millage. “That means 1.5 mills is coming down off the (city) property tax for next year. We are lowering taxes in the city of Magnolia.”

The tax applies to real and personal property owned in Magnolia and is separate from local school district and county millages. As part of Monday’s tax approvals for next year, the Council also levied millage rates for Magnolia Fire and Police Department pension funds. The rates remained the same at 1 mill for Fire pensions and 1 mill for Police pensions, for a total of 2 mills.

With the elimination of the general fund millage next, the city’s total millage rate for 2022 will be down from the current rate of 3.5 mills.

A mill is a rate used to calculate taxes owed on real and personal property owned by a taxpayer. One mill is equal to one-thousandths of a dollar. By eliminating the 1.5-mill City General Fund millage, Magnolia property owners’ annual tax bills should decrease next year.

For example, a taxpayer who owns $100,000 in assessed property will see a cut to their city taxes by $150 annually.

The city’s 1.5-mill general fund millage had been on the books since 2019. The tax was levied to help bolster the city’s revenues and increase local police salaries. A 2018 city budget proposal hoped to generate an estimated $70,000 in total raises for 22 MPD officers, as well as clerical staff and other employees officers within the agency.

But as the city’s finances have recently improved, the extra millage is no longer needed, according to the mayor.

“It appears that we’re OK with cash-on-hand,” he said.

Since last year, even amid the coronavirus pandemic, the city has been financially healthy. In March, during his annual State of the City address, the mayor stated that city tax revenues were up 7% (about $800,000) over the previous year, and that a contributing factor was thought to be the state’s legislative changes to online shopping sales tax collections that took effect in July 2020. Previous to the Arkansas statutory changes, many online retailers such as Amazon and eBay were often exempt from local sales collections.

The changes have helped see an increase in local tax revenues, but the mayor did say Monday that it has been a “good year”, but that some months were “a tick down.”

Monday’s vote to elimination the 1.5 mill tax, however, is not necessarily permanent. The tax can still be re-levied for 2023, or any year after that -- should the city council vote as such. According to the mayor, however, the city intends to keep the general fund millage off the books for as long as possible.

“We’ve always said that if we find ourself in the position where we have to call for (the general fund millage) back, that we would,” he added. “…If the world comes to an end, we can make it until it’s time to re-levy that millage.”

In other Magnolia government news:

- The Magnolia City Council on Monday approved the purchase of a new Dodge Durango SUV for the Magnolia Police Department. The cost for the vehicle is about $30,300, according to Mayor Parnell Vann, and will be used to replace a Ram truck police cruiser that was recently sidelines with motor problems.

The city was lucky to be able to purchase any new vehicle at all, according to the mayor. In a typical year, the city would buy at least two new police vehicles to phase out old units in the fleet, but, with mass material shortages and supply chain breakdowns and backlogs, the city was initially slated to receive no new MPD vehicles. The new Durango, however, was acquired after Landers Dodge Chrysler Jeep RAM reached out to the city.

“There will not be any more trucks or cars available this year,” said Vann.

The mayor said he’d like to buy more equipment for the city in upcoming 2022 budget talks, but that there simply isn’t the inventory available right now to do so.

“There is not a lot out there right now that we can buy,” he said.

The city official noted that he was told that past production levels for vehicles will not return until mid-2023 -- and that timeline is contingent upon no further supply chain problems or shortages.

“They’re just not making stuff right now,” he added.

- The Magnolia Utilities Water and Wastewater audit for the year 2020 was reviewed by independent water auditor Pete Parks of Parks & Company PLC in El Dorado.

The CPA noted that the city’s water audit found no significant deficiencies and praised the city’s Treasurer, Kim Newell, for her financial work for the city, but he did critique the utility service’s “segregation of duties” and asked that high-level city officials have more oversight in the Water and Wastewater Departments to prevent employee fraud and possible misappropriation of grant funds.

- Two interlocal agreement measures were passed by the Magnolia City Council Monday to finalize a joint-agreement with the city of Magnolia and Columbia County for the recently-purchased Columbia County Rescue truck. The vehicle, which cost an estimated $185,000, is operated around-the-clock by the Magnolia Fire Department and is used during rescues and extractions of car accident victims. The truck contains Jaws of Life devices, as well as on-board flame retardant and rescue equipment.

As part of the agreement, the city of Magnolia was absolved from its part in funding the local 9-1-1 emergency dispatch service, but is responsible for staffing, insuring, and maintaining the new rescue vehicle. As part of the agreement, the city and the county governments also split the cost of the truck’s purchase.  

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