COPPERAS COVE — City Councilman Jim Schmitz attempted to lower the city’s proposed 2014 fiscal year property tax rate Tuesday after seeing proposed budget changes. No other council members agreed.
After weeks of providing input, the City Council and staff lowered the proposed budget enough to increase the city’s general fund reserves by about $146,000.
That figure is close to the revenue gained from 1 cent of the proposed property tax rate, Schmitz said.
“I would be in favor of lowering the property tax rate by one cent,” he said, “and just lowering the amount of reserve by that much.”
The council earlier this month voted on a proposal to increase the property tax rate from 76 cents to 77.74 cents per $100 of assessed property value.
The rate should generate about $9.4 million in revenue for the city. Of the proposed rate, 52.29 cents would be allocated for maintenance and operations and generate about $6.5 million in revenue, while 25.45 cents would go to paying the city’s debt, a $2.9 million cost.
City Manager Andrea Gardner explained the council could lower the property tax rate as it deemed necessary. However, she also warned that leaving fund balance figures that close to three months of operating cost or using fund balances to cover expenses in the $52.8 million budget could affect the city’s bond ratings.
A downgraded bond rating could cost residents more because of higher interest rates issued on city debt, Gardner said.
Councilman Mark Peterson suggested leaving the proposed tax rate at the higher figure and possibly paying to increase city services throughout the year.
“We have some unmet needs,” Peterson said. “I am not saying we need to fund them, but we could fund them if other revenues (such as sales tax, continue to increase).”
Councilman Gary Kent questioned Schmitz about why he wanted to reduce the proposed property tax rate. Everyone’s wallets are tightening, Schmitz said.
“We all know we have the highest tax rate in the area, and none of the other cities are increasing their tax rate,” he said. “I am trying to stay competitive.”
The city’s general operating fund consisted of expenditures proposed at about $15.1 million and expenses at $16.1 million. The water and sewer fund projected revenues of $11.6 million and expenses of $11 million.
The solid waste fund showed about $3.3 million in revenue with close to the same for expenditures. Drainage fund revenues are estimated at $891,000 and expenses are proposed at $1.3 million. The golf course fund projects revenues at about $412,000 and $533,000 in expenses.