October 5, 2022 1020 PM
MARFA — Last week, City Council approved the 2022-23 fiscal budget and proposed tax rate, bringing the process to an end after a series of meetings and workshops. Council also discussed registration fees for short-term rentals (STRs) and how the city might better regulate them in the future.
All council members were present for the meeting, which was well-attended by local residents, though none spoke during the citizen comment periods or public hearings regarding the budget, tax rate, or any other agenda items.
Budget and tax rate
The conclusion of a previous budget-focused meeting in late September saw council members arrive at a budget with a $30,000 deficit after making cuts to the city administration and water departments, among other changes. Last week, council members were able to close that $30,000 gap and approve a mostly balanced budget.
The new budget, which will be uploaded onto the city’s website soon, allocated for a 3% raise for the city’s hourly employees and involved increasing short-term rental (STR) registration fees for the first time since 2018 from a flat fee of $150 to $500, with each unit costing an additional $100. STR fees will need to be renewed annually, but will now have deadlines as opposed to the previous rolling registration model. Monthly gas meter fees were also bumped up to a base rate of $16 a month, up from $10 a month, in order to combat the fact that the city is now paying over double its previous rate per MMBtu, an energy unit, for natural gas.
Council members also factored into the budget the water and wastewater survey results they recently received, opting to raise rates by 8% for the first five years and lower to a 3% increase over time. Funds from the rate increases will go toward water and wastewater infrastructure projects and include annual funds for vehicles and equipment. An option to determine rates based on meter size is still on the table, with city employees to assess meters in town to find out more about what sizes exist.
At council’s next meeting on October 11, the governing body will review two ordinances relating to increasing water, sewer and gas rates for city customers. They will have to approve and adopt those ordinances before city utility customers see new rates reflected in their monthly bills. The Big Bend Sentinel will provide coverage of the Oct. 11 meeting.
Streets, along with utilities, were another priority this budget cycle. The city will spend its 2022 tax note — a $2.95 million loan to be spent within three years and paid off in seven — primarily on streets, allocating $2 million dollars to street repairs targeting Russell and Mesa, along with a handful of other city far gone thoroughfares.
“Streets have always been a priority in Marfa and it seems like we just keep passing the buck. This is something we need to tackle now that we do have funds,” said Mayor Manny Baeza.
The city will also spend an additional $375,000 worth of tax note funds on a new groundwater storage tank, for which construction has been delayed, but is slated to begin in November. With that, the city will be left with a remaining $300,000 to $400,000 in tax note funds.
The topic of seeing the Marfa Volunteer Fire Department’s expansion project come to fruition, which was still not fully funded despite having received $224,000 in American Rescue Plan Act (ARPA) funds from the county, was also addressed in the city’s final budget meeting. The city had an existing $147,500 budgeted for the project, carried over from previous years, but the fire department still needed $87,000 to get the work done.
“It’s our building. It’s volunteer work. It’s embarrassing not to be able to do this. But hey, if we have a workaround, I’m with you 100 percent,” said Councilmember Eddie Pallarez.
In the end, council opted to have the fire department pay for the remaining project balance with their savings, with the city to pay them back later, with interest, in order to see the project realized.
Council voted unanimously to pass the amended budget. Later in his mayor’s report, Baeza thanked council members for meeting throughout the month of September to finalize the budget. “We made some tough choices. But in the end, I think we all had to have the same goal in mind of just bettering our community and making difficult changes that are not going to be too extreme on the residents,” said Baeza.
Council then swiftly approved the proposed 2022-23 tax rate of $0.371 per $100 taxable value, a 2.35% increase from the previous year.
Increased registration fees for short term rentals
Councilmember Jason Ballmann led a discussion of STR rules and regulations, stating that Marfa’s lack of affordable housing was “on the verge of a public health crisis” and the city needed to start making sensible steps to curb the effects of STRs.
“We have a lot of people — our long-term community critical people, teachers, emergency responders, city staff and others — who need to be able to live here,” said Ballmann.
Ballmann suggested looking to other similar communities, like Fredericksburg, with “outsized tourism” issues and taking a series of steps over time to address what he called the city’s overabundance of STRs.
One of the challenges that lay ahead for the city is determining exactly how many STRs there really are in Marfa. Companies like Airbnb and VRBO do not post addresses until a user books a stay, and not everyone complies with the city’s ordinance to pay an STR registration fee. The city has previously hired outside firms to look into the matter and may do so again.
For now, a precise number is hard to pin down. The Presidio County Appraisal District reports there are 118 STRs operating in Marfa, out of a total of 1,102 homes and 154 mobile homes. A third party data collection agency that the city may contract with claims there could be up to 210 STRs in Marfa.
“It’s kind of hard to pin it down, so we’re going to have to just sort of combine all of those resources to get a number,” said City Manager Mandy Roane.
In addition to upping registration fees, Council also directed Roane to look into what it would cost to conduct fire inspections for STRs. The city is currently working with its lawyers to edit its STR ordinance to reflect rate changes and a potential fire safety inspection requirement. Council agreed the steps were sensible and the start of more conversations moving forward.
“I know there’s a very rich history here as well as other municipalities all across the world about dealing with short-term rentals,” said Ballmann. “But it seems like the ones that have more restrictions and more guidance tend to empower their communities more than the ones that don’t have anything.”
In a follow up call, Ballmann stated longer-term goals would involve looking into how to incentivize more long term rentals and whether a potential moratorium could be placed on STRs in the city.
“We need to make sure that [STR] impacts are being mitigated and we need to hold them accountable,” said Ballmann. “With planning and zoning, we’re going to be looking at how we can limit the number of Airbnbs, VRBOs and other short-term rentals by the block or neighborhood level.”