The Sherman City Council had one last opportunity to review the draft budget Monday before city staff prepares the official budget ordinance for the 2017-2018 fiscal year. While no council members raised objections to the draft budget presented, two members voted against the proposed 3.3 cent tax rate increase and the scheduling of public hearings on it.
The proposed property tax increase will go from 39.43 cents per every $100 valuation of property to 42.73 cents. The motion to schedule the public hearings was ultimately approved, but council members Shawn Teamann and Kevin Couch said they voted no on that agenda item because they believe the city is trying to do too much at once.
“It was my opinion, and I expressed it in the meeting that we discussed the tax rate, that there were other options for this year that did not include a tax rate increase,” Teamann said. “I spoke with hundreds of citizens in the community and the majority of them expressed their opinion strongly that they did not want to see a tax rate increase if it could be avoided.”
Teamann said he sees other options on the table to bring in additional funds. One of those Couch mentioned was the city’s two new tax increment reinvestment zones for the planned developments at U.S. Highway 75 and FM 691 on the city’s north side and at the northwest corner of the intersection of Hwy. 75 and FM 1417 on the city’s south side.
“We have two new tax reinvestment zones that are being created that are slated for development to go online this calendar year, and I would like to see those develop a little further and create that tax base,” Couch said. “And like Shawn said, the appraisals have gone up and our pool of money has increased because of the property taxes going up. I think there’s different ways and more creative approaches to structure our capital projects this year that could make up for that $1 million in debt service they’re trying to raise the rate for.”
The increase in property tax is slated to fund payments on debt issued during the current fiscal year. Couch and Teamann each said they’re planning to vote against the adoption of the tax rate and the fiscal year 2017-2018 budget — the way it is currently — when they are presented as ordinances.
The proposed budget has about $94.6 million in appropriations, which is an increase of around $11.8 million over last year’s original budget of $82.8 million.
“It includes a 3.3 cent tax rate increase, a 3 percent utility rate increase and a $1 equivalent residential unit on a stormwater fee,” City Manager Robby Hefton said.
City staff said the proposed budget will bring in $1.465 million more in total property taxes than the current fiscal year’s budget, with $142,000 of that coming from new property added to the tax roll. The $94.6 million in appropriations include four new city staff positions, $16.3 million in facility and street projects funded by debt, $10.8 million for equipment and $4.3 million for vehicles.
Following the draft budget review and the discussion of the proposed tax rate and public hearings, the council also reviewed a draft of the Capital Improvement Program for 2017-2022 and set a public hearing on that.
“This relates to our five-year CIP plan, but it is just that — it’s a plan,” Hefton said. “The only part of this that’s funded is year one so this program represents our view of the projects that could be coming down the pipeline for the next five years. It’s a big number at $163 million, but we’re not funding that, that’s just our estimate of if we were to do all these projects — that’s what the estimated cost would be.”
Hefton explained most of those projects would be for things such as street improvements and facility improvements, though there are also some utility and stormwater projects.
“The part of the budget that actually is funded for capital is about $26 million in year one, so you can see only a fraction of that $163 million is actually being proposed to be funded,” Hefton said.
A public hearing on the budget ordinance will be held during the council’s next regular meeting on Aug. 21 and the council will consider the budget ordinance for adoption during that meeting. The council will also hold the first public hearing on the tax revenue increase during the Aug. 21 meeting. A second public hearing will be held during the Sept. 5 meeting and the tax rate ordinance will be considered for adoption on Sept. 18. A public hearing on the CIP plan is also slated for the Aug. 21 meeting.