POSTED: Wednesday, August 11, 2010 - 10:07am
UPDATED: Friday, August 13, 2010 - 9:30am
Maintaining current levels of service delivery while decreasing expenditures by $4.8 million is the focus of the 2010-2011 proposed budget that will be presented by City Manager Mark McDaniel to the Tyler City Council at their meeting this week. The budget proposal is the culmination of eight months work by the City’s budget committee and departments in response to significantly lower sales tax revenue and slightly depressed property values.
The proposed budget calls for maintaining the existing “effective tax rate” which is essentially the tax rate calculated to generate the same amount of revenue that was received in the last fiscal year. The effective rate is 20.8 cents per $100 valuation.
“I am very pleased that we were able to close the gap between our expenses and revenue without raising taxes or decreasing service levels,” commented Tyler Mayor Barbara Bass. “Most people know that our tax rate is one of the lowest in the State; however, many of our citizens don’t realize HOW much lower it is. In some cases it is as much as three times lower than cities of comparable size.”
For example, currently the City of Waco has a tax rate of 78.6 cents per $100 valuation; Killeen is 69.5 cents, Abilene is 69.3 and Beaumont is at 64 cents. Since 1994, Tyler’s tax rate has decreased by more than 60 percent, putting a total of $22.3 million back in the pockets of consumers.
“Because of our low property tax rate and lack of general obligation debt, Tyler has been able to weather the economic downturn better than many other communities,” added Mayor Bass. “We are hearing daily about cities that are laying off public safety personnel, decreasing Library hours and cutting Parks programs. We are truly blessed that we have been able to tighten our belts to balance our budget this year without significantly affecting service levels.”
The City’s General Fund budget is nearly $55 million and is comprised of revenue from sales tax (41 percent), property taxes (26 percent), fines (11 percent), franchise fees (17 percent) and other sources. Expenses from this fund include:
• Police and Fire Departments - 67 percent;
• Parks and the Library - 10 percent;
• Public Works - 7 percent;
• Court - 3 percent;
• General Government - 7 percent; and,
• Miscellaneous - 6 percent.
“Public Safety was the number one priority identified during the Tyler 21 comprehensive planning process,” continued Mayor Bass. “Therefore, it makes sense that it accounts for 67 percent of the General Fund.”
The City of Tyler began their budget process several months earlier that typical to allow time to explore opportunities to make cuts that would allow the City to hold the property tax rate steady. Cost savings were realized in many areas including:
• Freezing, shifting or eliminating 23 positions;
• Postponing capital purchases;
• Reducing funding to outside agencies;
• Reducing subsidies and funding matches to other funds;
• Reducing training expenses;
• Shifting costs from internal service funds that over-recovered in prior years;
• Adjusting cost allocations for some overhead expenses; and,
• Reducing fuel and oil expenditures.
As part of the annual budget process, some rates and fees will be adjusted. To fund multi-year utility extensions begun two years ago, a six percent water and sewer rate increase is proposed. Even with the increase, Tyler’s rates are still significantly below cities of comparable size.
Due to less development than in prior years, revenue generated in the Development Services Fund is down $104,000. To address this, two additional positions have not been funded and fees for platting and zoning will be increased to cover more of the actual cost for these services. Residential and commercial Solid Waste rates will remain the same; however, there will be a rate adjustment for premium haul out/pack out service only. Rental car service fees at the airport will be adjusted as well as some fees at the cemetery.
“In lieu of an across the board tax rate increase, use fees have been adjusted so those citizens utilizing a service contribute to offsetting the expense,” explained Mayor Bass.
Efforts to retain the City’s trained workforce include the potential for a productivity increase from zero to two percent for civilians, two percent for sworn personnel, and implementation of the second phase pay plan study adjustments initiated over three years. These recommendations would be implemented beginning in January 2011 only if sales tax revenues increase by a projected two percent over sales tax collected in the City’s current fiscal year. However, employees may see up to a $30 per month increase in health insurance premiums in January.
In addition to Wednesday’s presentation, there will be three additional opportunities for public input on the budget, including two public hearings. The hearings will be at Tyler City Hall, 212 N. Bonner Ave. on the following dates:
• Wednesday, Aug. 25 at 9 a.m.
• Wednesday, Sept. 8 at 9 a.m.
Final adoption of the budget is scheduled for Sept. 22 at 9 a.m. at Tyler City Hall.