Gunner council moves toward no‑new‑revenue tax rate as city confronts state repayment demand

At its regular meeting, the Gunner City Council opened a public hearing on the property tax rate and moved to adopt the no‑new‑revenue (no new tax) rate as its working recommendation ahead of the formal adoption hearing.

City staff explained the two main options: the "no‑new‑revenue" rate, which preserves roughly the same tax revenue as the prior year, and the "voter‑approval" rate, which would raise the tax ceiling and generate more revenue. Staff said the no‑new‑revenue option would leave the city with about four months of operating reserves in the adopted budget, while the voter‑approval rate would produce roughly an additional month and a half of reserves.

The presentation included line‑item examples showing how tax levies are split between debt and maintenance and operations and how incremental taxing districts (TIRZ/TIF/TERS) affect calculations. Staff noted that changes in certified taxable values can make the same rate produce different outcomes for individual homeowners and showed a representative household example.

Separately, staff briefed the council on an audit from the state controller's office that found the city collected approximately $1,691,000 in sales tax over a 35‑month period that should be repaid. The mayor stated that a staff member, Jeff Gibson, had signed an agreement with the controller's office without prior council authorization; the mayor said the council must now consider ratifying the agreement. "Jeff Gibson signed this agreement," the mayor stated during the meeting, noting the council had not previously authorized it.

Councilmembers discussed the repayment timing: an earlier eight‑year payback offer had been discussed in 2023, but a later $259,000 assessment was presented to the city with an 18‑month repayment window, increasing monthly amounts budgeted for the payback. Staff told the council the matter requires roll‑call ratification because of the dollar amount and fiscal impact.

The council introduced a motion to adopt the no‑new‑revenue rate during the meeting; staff will return with the completed ordinance language and required formal notices before final adoption at the scheduled rate hearing.

What happens next: council will consider ordinance language and vote to adopt a final tax rate at the published hearing date; staff will also return with the formal ratification resolution for the controller's repayment agreement if council chooses to ratify the signed document that staff said was executed without authorization.