Mistakes at town tax rate vote may require second hearing

Published 4:49 pm Monday, August 7, 2023

Procedural mistakes may require Smithfield’s Town Council hold a second public hearing and revote on its real estate tax rate.

The council voted in June to set the rate at 14 cents per $100 in assessed value, down from the advertised 17-cent rate, in an effort to stay “revenue neutral” with Isle of Wight County’s recent reassessment of property values.

The 17-cent rate, despite amounting to a 10% decrease from last year’s 19-cent rate, would have added roughly $500,000 to the town’s budget due to the average 34% countywide rise in single-family home valuations. Under state law, when an advertised tax rate exceeds 101% of the previous year’s real estate revenue due to reassessment, the town must hold separate public hearings on its budget and tax rate prior to any adoption vote.

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The Town Council held only the budget hearing on June 6 prior to its June 26 votes to adopt its $10.2 million budget and 14-cent real estate rate for the 2023-24 fiscal year, which began July 1. Town Attorney Bill Riddick blamed staff turnover for the seemingly overlooked state law.

Smithfield’s longtime treasurer, Ellen Minga, resigned earlier this year. Riddick told The Smithfield Times that in past years, he and Minga would work together to calculate whether the increase in revenue from a reassessment met the threshold in state law that would require splitting the ordinarily combined hearing on the budget and tax rates into two.

Town Manager Michael Stallings, Riddick noted, came to Smithfield in 2020, making this the first Smithfield budget he’s handled during a reassessment year. Isle of Wight County reassesses property values every four years.

Riddick also acknowledged that he too made a mistake the day of the June 26 vote in deeming a council member’s motion out of order.

At the June 26 meeting, Councilman Randy Pack had called for the 14-cent rate. After Councilwoman Renee Rountree seconded Pack’s motion, Councilman Mike Smith put forward a competing proposal for a 15-cent tax rate, taking issue with the town’s plan to achieve the 14-cent rate by using $413,000 in COVID-19 relief funds the town had received from the federal American Rescue Plan Act to fill the resulting revenue gap.

Rountree immediately interjected that there was a motion already on the table.

When Mayor Steve Bowman asked whether Smith could make a substitute motion, and whether such a motion would take precedence over the original, Riddick advised the council to vote on Pack’s original motion, which ended up passing 4-3.

Bowman, Pack and Rountree each voted in favor of the 14-cent rate, while Smith, Councilman Wayne Hall and Vice Mayor Valerie Butler each cast “no” votes.

Riddick, in an Aug. 7 email to The Smithfield Times, acknowledged having made a mistake in ruling against Smith’s motion, but he contended the issue was “moot” since Smith’s motion received no second. Nor was a second ever called for.

A review of the meeting video showed that only one second passed between Smith’s proposal of a 15-cent rate and Rountree’s interjection, followed by Riddick’s ruling five seconds later, after Bowman sought clarification on substitute motions.

Just over a month later, a similar situation arose, only this time with a different outcome.

Rountree, on Aug. 1, motioned to approve mixed-use zoning for the Grange at 10Main development at Route 10 and Main Street. When Butler seconded the motion, Smith proposed postponing the vote to September.

“That’s a substitute motion, and we’ve been through that,” Bowman said, referencing the June 26 meeting. “We know what the substitute motion is now.”

Bowman, this time, called for a second to Smith’s motion, which came from Hall, and called for a vote. Smith’s motion passed 5-1 with Rountree dissenting and Pack having left the room ahead of the discussion and vote due to a conflict of interest involving the Grange.

Robert’s Rules of Order, which has become the nationwide standard for meetings since its 1876 publication, states that if a substitute motion is made prior to a vote on the original motion, the vote on the substitute motion takes precedence. Smithfield’s Town Code, however, specifies that council meetings are to be governed by the rules of the Virginia House of Delegates.

According to G. Paul Nardo, clerk of the House of Delegates, the House’s parliamentary procedures allow for substitute motions. Only at the committee level do House rules require that a motion be seconded before a vote is called.

One option, Nardo said, would have been for Smith to have motioned to table the 14-cent proposal, which would have taken precedence over Pack’s original motion under House rules. A successful majority vote to table the first motion would have then allowed Smith to propose his alternative. Nardo, however, declined to weigh in on whether the Town Council or Riddick had erred.

A 15-cent real estate rate, according to Stallings, would still have necessitated using $153,000 in ARPA funds to balance its 2023-24 budget.

Riddick said he plans to bring the state law issue to the council’s attention at its Aug. 28 meeting, but contends there’s no urgency in scheduling the hearing, since the town’s real estate bills won’t be mailed until November.