Cove City Manager Andrea Gardner presented the preliminary fiscal year 2018 budget to the City Council at a special workshop Tuesday.
The preliminary budget shows a more than $1.7 million drawdown on the city’s total fund reserves, according to the presentation. Reserve fund balances are used as buffers for unexpected swings in city finances year over year.
The total budget is $38,948,105.
The city’s general fund, which pays for operating expenses, is scheduled to have a more than $120,000 drop in revenue in 2017-2018. Meanwhile, the operating fund’s spending is expected to increase by $600,000.
Even with the budget drawdown, the general fund balance is still scheduled to remain above the “ideal balance” of 25 percent of operating expenses, according to the presentation.
According to state law, cities must pass their annual budgets by Sept. 29 each year.
State law also mandates cities must hold a public hearing on their proposed budgets as well as two public hearings to set local property tax rates if the effective rate is higher than the rollback rate.
Rollback tax rates are comprised of maintenance and operations and debt service portions. The maintenance and operations portion of the rollback tax rate is the rate that would be needed to raise the same amount of taxes that the city levied in the prior year plus 8 percent, according to the Texas Comptroller’s office.
The city’s 2016 rollback rate was 77.17 cents per $100 of taxable value assessed. The effective rate was 79.79 cents per $100.
The budget presentation can be viewed online at bit.ly/2u6NV2F.