Sherman is moving forward with its new five-year Capital Improvement Program, which includes a plan for $163,493,369 in projects during that time.
The Sherman City Council recently approved the 2017-2022 CIP plan by a vote of 5-2, with council members Kevin Couch and Shawn Teamann voting against its adoption. The resolution adopting the program came after a public hearing was held on the plan, but no one from the public came forward to speak.
“The Capital Improvement Program consists of projects submitted by each department for consideration for the next five years,” Director of Finance Mary Lawrence said, adding that the city’s charter requires adoption of the CIP by resolution. “It’s a planning tool. Only the first year is funded as part of the 2018 budget that we’ve been discussing, in the amount of $16.3 million.”
Couch and Teamann voted against the CIP plan because its funding is part of the city’s 2017-2018 fiscal year budget, which they both have said they oppose because of the planned property tax rate increase.
“I voted no simply due to the fact that I think there are other areas in our budget that we could trim off the fat and use that money to service the debt,” Couch said of the 3.3 cents property tax increase that is going to be used to pay for debt the city issued during the current fiscal year.
Couch and Teamann also voted against the budget ordinance and said they plan to vote against the property tax rate ordinance when it is considered for adoption on Sept. 18. During the first public hearing on the tax rate, which was also held during last week’s meeting, Lawrence explained the rate increase to 42.73 cents per $100 valuation of property.
“It’s broken up into an operations rate and a debt rate,” Lawrence said. “The operations rate is the same as last year. The debt rate is about 8 cents, which is about 3.3 cents higher than last year.”
Earlier in the month, City Manager Robby Hefton explained that while the first year of the CIP is all that’s being funded at this point, the other four years represent an estimated cost of what it would be for all the projects in the city’s pipeline during that time.
“You can see only a fraction of that $163 million is actually being proposed to be funded,” he said.
The estimated costs used in the plan include $105,566,123 from the city’s general fund, $29,292,770 from its utility fund and $28,634,476 from the stormwater fund.
“Our community continues to experience growth and potential for growth and, in order to meet the needs of the future, we must plan,” Hefton wrote in the introduction to the CIP plan. “The Capital Improvement Program is separated into two functions, that of governmental and of proprietary.”
Hefton wrote the governmental projects are in the nature of streets, parks, drainage, flood control, refuse and public safety improvements, while the proprietary projects primarily include water and sewer improvements.
Property tax ratification
In a separate agenda item, the council ratified the property tax increase, as is required by Texas government code.
“If we raise even $1 more property tax than the prior year, we are required to have this ratification item on the agenda,” Lawrence said. “So your tax rate can remain the same and you still have this item that has to be ratified. We see this every year.”
In a document prepared for the council, city staff said 2017-2018’s Operating Budget contains $1.465 million and 13 percent more revenue from property taxes than was originally budgeted for the current fiscal year. Of that, $142,000 is tax revenue from new property.