The Devine City Council adopted a tax rate increase that will fund a projected budget surplus for the upcoming fiscal year during a Special meeting on Saturday, September 21.
Tax rate
The tax rate for the 2019-2020 fiscal year, which runs from October 1 through Sept. 30, 2020, was set at the rollback rate of $.5298 per $100 of valuation, up from the current rate of $.5013.
The rollback tax rate is the maximum rate allowed by law without voter approval.
District 5 Councilwoman Debbie Randall said the new tax rate would increase property owners’ City taxes by around $30.00 for property valued at $100,000.
Mayor Cory Thompson said that a District 5 resident had spoken to him about the tax increase.
“They said Devine should never have gone down quite as low as they did,” Thompson said. “The numbers became too tight on this end of it.”
“It’s just the perception of it,” District 4 Councilwoman Jennifer Schott added.
Senate Bill 2, which was passed this year by the State Legislature and signed into law by Governor Greg Abbott on June 12, requires municipalities to receive voter approval in an election in order to increase tax revenue by more than 3.5 percent in a year.
The previous cap was 8 percent.
“Next year’s going to be tight,” City Attorney Tom Cate said. “If you think this year was a problem, wait till next year.”
“Having not raised [the tax rate] all those years just adds to the perception problem,” Schott said. “It makes it seem like the only reason we’re doing it is one line item.”
A motion by Randall and District 2 Councilman Steve Lopez to approve the tax rate increase passed unanimously.
District 1 Councilman David Valdez and District 3 Councilman David Espinosa were both absent.
Budget
Council unanimously approved the amended FY 2018-2019 budget, which featured a General Fund deficit of $722,508.06.
The General Fund encompasses all City departments other than Water and Sewer, Debt Service, the Lodging Fund, the TCOLE fund, and the HOME Program fund.
However, the budget for the 2019-2020 fiscal year is projected to be a surplus.
The $6,134,395 in projected revenues include $3,762,135 for the General Fund; $2,355,000 for the Water and Sewer Fund; $12,550 for the Lodging Fund; $4,690 for the Debt Service Fund; and $20.00 for the TCOLE Fund.
City revenue comes from taxes (including sales tax), fees and fines, grants and contributions, interest earned, permits and licenses, services and charges, and miscellaneous.
Expected expenditures are $3,636,221 in the General Fund; $2,077,956 in Water and Sewer; and $9,550 in the Lodging Fund, for a total of $5,723,727.
The largest budget request in the General Fund is for the police department, at $981,104, followed by health and sanitation at $750,325, and the golf course at $548,725.
Jennifer Schott asked how the golf course budget had been trimmed down from the initial request of $638,000.
“We took two outside employees out, and we also took a part-time high school student out of the inside and a college student out of the inside,” Rodriguez said. “So we took a total of four employees out, effective October 1.”
One of the outside employees transferred to Public Works primarily to maintain the two City parks, while the other left the City entirely.
Additional money was cut from the golf course’s maintenance line item because the City purchased the necessary chemicals and sprinkler heads during FY 2018-2019.
“Where is what Scott [Grego] proposed that he needed for the clubhouse part?” Schott asked. “Where is that in the budget?”
Grego recently submitted a request to manage the golf course privately, though it would remain open to the public. His proposal contained a number of concessions from the City, including reimbursement for bringing the clubhouse up to operational standards, which he estimated to cost between $175,000 and $200,000.
Rodriguez said it wasn’t budgeted because Council hadn’t directed her to include it, but that it would be considered a capital outlay and would require amending the budget at a later date.
“There’s two options that y’all have,” Rodriguez said. “Either cash in a CD [Certificate of Deposit], or go ahead and do a Certificate of Obligation.”
The City recently authorized $1.1 million in Certificates of Obligation in order to pay for the replacement of water meters.
A motion by Lopez and Randall to approve the budget passed 2-1 over Schott’s objection.
“Just because I feel like I have to serve my people,” Schott said. “That’s my purpose here, right? To serve my people and they’re just not happy with the amount of money that we’re spending.”
A full copy of the budget, which breaks down expenses for each department, is available online at cityofdevine.org/mayor-council/annual-report/budget.
The next Regular Council meeting is scheduled for Oct. 15.
By Marly Davis
Staff Writer