NEW BRAUNFELS — The City of New Braunfels will pay three river outfitters and their attorneys a total of $691,063 to settle a 2007 suit over a flawed early version of the city’s “tube tax.”
The settlement, approved by city council this week, follows a November decision by the Texas Supreme Court not to hear the city’s appeal of a lower court’s ruling that the initial rendition of the city-imposed river management fee, or tube tax, was invalid because of procedural flaws.
City Attorney Val Acevedo said settlement funds will be distributed as follows to the river outfitters who sued in 2007: Rockin’ R River Rides, $190,853; Texas Tubes, $141,090; and the then-owner of Corner Tubes, which is now under new ownership, $141,172.
Their attorneys will receive $217,948.
The payments are based upon the amount each outfitter paid in river management fees from 2005 to 2007, Acevedo said.
After the outfitters filed their legal challenge to the pass-through fee, a district judge in Comal County ruled in their favor, saying city officials had failed to comply with essential requirements of the city charter when they enacted the fee in 2001.
The case was appealed by the city to the Third Court of Appeals of Austin, the 11th District Court of Appeals of Eastland, and finally to the Texas Supreme Court.
City officials have said the original fee ordinance did not comply with the city charter in a couple of ways, including that it lacked the city attorney’s signature. Once the mistakes were discovered, another ordinance — with the flaws fixed — was passed by New Braunfels City Council in 2008.
The 2008 law remains in effect.
Under the River Management Fee, tubing outfitters collect the $1.25 tube tax from customers and then remit those fees to the city, which uses them to offset the cost of policing and cleaning the rivers.