BEEVILLE – City Manager Joe B. Montez had encouraging news for Beeville taxpayers when he introduced the 2019-20 fiscal year budget Tuesday evening.
“The staff is glad to state that this fiscal year budget has been prepared with existing and new revenues without a recommended tax increase or increases in the rates of water, wastewater, garbage, building permits or any other rates the City of Beeville charges for service,” Montez said as he addressed the city’s general fund.
Four of the five City Council members were present for the city’s first budget workshop in the council chamber at City Hall as Montez began the budget review.
The budget reflects a total expected appropriation of $25,566,046 for the fiscal year beginning on Oct. 1.
The most significant source of income for the city is property taxes, Montez said. Those taxes are expected to place $2,630,630 into the city’s coffers for the upcoming fiscal year.
That figure is down slightly from the projected $2,631,630 the city expects to see in property tax income from the current fiscal year.
Council members followed the agenda and established a proposed property tax rate before beginning their review of expected revenues and expenditures by city departments.
Montez explained that property owners could be paying more in taxes, overall, in the coming year because assessed values have increased.
The city manager suggested that the council set a proposed tax rate a little higher than the effective rate of $0.56007 per $100 of property valuation.
He suggested proposing what would be considered the rollback rate of $0.5980 to give the city some “wiggle room” in case expenses were to increase unexpectedly.
When council members began proposing the rollback rate, as suggested, Councilman Ford Patton disagreed.
If the council were to propose the rollback rate, city taxpayers would be able to petition the city to force an election on the proposed rate.
That would give voters the opportunity to actually reduce the proposed rate at an election on the matter, effectively lowering the current tax rate.
Patton suggested proposing a rate of $0.59799, slightly less than the rollback rate. That would still give the city some “wiggle room” in spending for the upcoming fiscal year without the risk of a tax rate election.
Councilman Brian Watson expressed concern, however. He reminded the council that the city “has just come off a second boil water notice, and some services aren’t being delivered.”
Minutes later, Councilman Eric Holland followed Patton’s suggestion and made a motion to set the proposed rate at $0.59799 per $100 of assessed evaluation.
Patton quickly seconded that motion, and all four council members at the table voted in favor.
The council will not be able to approve a tax rate any higher than that proposed rate for next year’s budget. But it can approve a lower rate.
Montez pointed out that other major sources of income for the city look good for the budget.
Sales tax revenues, he said, are expected to remain close to what they were last year thanks to a solid city economy.
The budget, prepared by City Finance Director Kristine Horton, showed projected income from sales taxes at $2,626,080.
Montez explained later that the budget figures were prepared conservatively so the projected income from sales taxes was scaled down slightly from the amount projected for this year.
The city manager then explained that the third highest source of income for the city came from the collection of garbage collection fees.
This year that source of income is expected to bring in $2,332,802. The finance director projected a slight increase in that revenue to $2,349,900.
Montez said the projected revenues for the next fiscal year came to $10,102,313 and expenditures are anticipated to be $10,098,548 “leaving a surplus balance at Sept. 30, 2019, at $3,729.
“Since the projected remaining balance is healthy and exceeds the 3 percent required by the city charter, the council can approve the budget as submitted,” the city manager said.
Montez was proud to announce that the city would have a projected fund balance at the end of this fiscal year of $2,799,107.
“That’s one of the highest I’ve seen in years,” he said.
Montez then told the council that he is proposing a 5 percent cost-of-living pay raise for all city employees. He said he based that recommendation on a better economy, sensible budget proposals and the fact that city employees have gone several years without a pay increase.
Montez reminded the council that officers with the Beeville Police Department had received pay increases several months ago ranging from 5 to 11 percent.
One other concern the city manager expressed was an increase in the cost of health insurance, and he was going to look into possibilities of reducing those costs.
The city has scheduled the next budget workshop session for noon Thursday at City Hall.
The council is expected to hold several workshops from then to September before approving a budget in time for the beginning of the fiscal year in October.
Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at reporter@mySouTex.com.