HSB hearings on tax rate begin Tuesday, Aug. 29

By Lew K. Cohn

Managing Editor

The Highlander

The City of Horseshoe Bay will hold the first of two public hearings on a proposed 2017 tax rate this Tuesday, Aug. 29, during their regular City Council meeting in the City Council Chambers, 1 Community Drive, Horseshoe Bay.

The Horseshoe Bay City Council is proposing the same tax rate for 2017 as it had in 2016 at 26 cents per $100 valuation. This includes a maintenance and operations (M&O) rate of 22 cents per $100 valuation and an interest and sinking (I&S or debt service) rate of 4 cents per $100 valuation.

The M&O rate would go up slightly in 2017 from 21.86 cents to 22 cents, but the I&S rate is dropping by the same amount as it would go from 4.14 cents to four cents.

Because the city is proposing a tax rate that exceeds the effective tax rate, or the rate that would produce the same amount of revenue based on the city's certified taxable values, state law requires the city to hold two public hearings before it can adopt the tax rate. Due to an increase in certified taxable value, the city's effective tax rate is 24.692 cents per $100 valuation.

The city's rollback rate is 26.89 cents per $100 valuation. This is the highest tax rate that city of Horseshoe Bay may adopt before voters would be entitled to petition for an election to limit the rate that may be approved.

A second public hearing will be held at 9 a.m. Tuesday, Sept. 5, in the Council Chambers. The council will formally adopt the 2017 tax rate at their regular September City Council meeting at 3 p.m. Sept. 19 after holding a public hearing at that time on the proposed fiscal year 2017-18 budget and then adopting the budget.

The proposed budget, which covers the period of Oct. 1 through Sept. 30, is exepcted to generate an additional $378,079 in property taxes, an increase of 8.15 percent, though $131,110 of this amount is offset by new property added to the tax roll for the first time.

Preliminary taxable value of $1,931,064,126 combined for Burnet and Llano Counties. This includes $1,730,548,816 in value in Llano county and $200,515,310 in Burnet County.

If the city were to collect 100 percent of taxes levied under the proposed rate, it would generate $5,020,767 in revenue. A more modest 98.5 percent collection rate would generate $4,945,455 in tax revenue, which includes $4,184,616 in M&O funds and $760,839 in debt service funds.

City Manager Stan Farmer has noted the proposed budget, which includes projected revenue of $7,521,250 and projected expenditures of $7,419,000, which includes $217,000 in capital outlay, does not raise the property tax rate or utility rate and should create a budget excess of $102,249 with an ending general fund balance of $5,355,169.

The proposed budget does include an estimated salary increase for all full-time employees of 2.9 percent, which would require an additional $137,750. The city has also added three full-time firefighters to the Horseshoe Bay Fire Department while reducing overtime and part-time wages.

Farmer said the city has also estimated health insurance premium and cost increases of about eight percent. In debt service, the city will use $84,750 in fund balance to help meet its fiscal year 2018 debt service obligations, which is why the city is able to drop the debt service rate.

Other features of the proposed budget include the creation of a Technology Services Department, which would be comprised of a GIS administrator and IT administrator, who currently fall under central administration. In other reorganization, the municipal court clerk is being moved from Development Services to Administration, while the Code Enforcement Officer is being moved from the Police Department to Development services and the Public Works Director will be paid out of the Street Maintenance Fund instead of the Capital Improvements Fund.

The city is also expecting a 11.1 percent increase in expenditures for the police department as Chief Rocky Wardlow attempts to return his department to full staffing in fiscal year 2018.