As part of its 2017-2018 fiscal year budget, the city of Sherman is planning to raise its property tax rate and its utility rate, as well as possibly issue up to $16 million in additional debt. The budget will also reflect a planned 2 percent across-the-board wage increase for all employees and the addition of four new full-time workers.
The Sherman City Council spent nearly eight hours in its annual budget workshop Thursday receiving presentations from city staff and identifying priorities for the new fiscal year; Deputy Mayor Jason Sofey was absent from the meeting. The workshop gave city staff the direction it needs to put together a draft budget, which will be presented to the council for review later this summer.
“The interesting thing, the total budget is about $96.7 million,” Director of Finance Mary Lawrence said. “Last year, it was $82 million and the year before that, it was at $68 million. And of course, most of that is capital expenses, but it goes to show you we’ve really had to ramp up in the last few years. I don’t know what that number’s going to be next year; we might break $100 (million), possibly.”
If ultimately adopted, the city’s property tax rate would increase from the current 39.43 cents per $100 of taxable valuation to 42.73 cents per $100 of taxable value. Lawrence showed the council a number of charts on the property tax rate, noting the proposed increase would still keep the city’s rate lower than nearly all of its peer cities of similar size. A chart on its property tax rate history shows the rate has risen in all but one of the last five years.
“Our property tax rate increase is 3.3 cents,” Lawrence said. “Our whole property tax rate increase only goes to fund the additional debt service on the certificates of obligation we’ve already issued. That’s going to be about $1 million coming onto the books in 2018. We have programmed in an increase in the property tax base, what we think it’ll be. We won’t have our final number until about July 25.”
She explained the city also expects to see a loss in revenue from the Panda Power Funds plant on the city’s south side.
“Their abatement also went up this year, so we kind of got hit twice on that,” Lawrence said. “That effect may wipe out all the new value that’s coming onto the roll. It’s a significant number. I love Panda — yea to all our industries — but that is something that we have to plan for.”
The planned 5 percent increase to utility rates will also be a way to make up for Panda’s water usage being down for the city’s utility fund.
“We’ve had mild weather — they’re just not producing electricity like they were,” Lawrence said. “That’s part of their decrease in value. When their appraisal is done, it’s done on their income-producing ability. Well, they’re not producing electricity, they’re not making money. Their value goes down, they use less water, so it hurts us in both ways. However, if you take Panda out of the calculation for water and sewer, we would be up 3.5 percent over last year.”
In addition to the 2 percent wage increase for all employees, the city is also planning to earmark an additional $280,000 to keep wages at the Sherman Police Department and Sherman Fire-Rescue competitive. The four new employees will see two people hired for the street program and two for Sherman’s fleet equipment maintenance program.
“The general improvement fund, you’ll see $16 million in additional debt funding,” Lawrence said but noted that amount is up to $16 million and may change. “That’s for the parks we’ve been talking about and some new streets, such as Friendship Road, Travis Street West, Preston Club Road from (U.S. Highway) 289 — those are the roads that are included in that $16 million.”
The meeting was the first budget workshop for council members Charles H. Brown Sr. and Shawn Teamann, both of whom were newly elected last year.
“It was a great experience,” Brown said. “I think we accomplished a lot, and I’m looking forward to us implementing the things we talked about that we would want to improve and make the city a better place.”
Brown said he felt he learned a lot and enjoyed all the presentations from the different city departments, something Teamann said also impressed him.
“All the city staff did a great job presenting their proposals to council,” Teamann said, adding he also felt his first budget workshop went really well. “I’m excited about the potential for the Parks and Rec Department and their bicycle program and their parks program and what they’re doing there.”