The Abilene City Council adopted a first version of its Fiscal Year 2020 budget Monday morning, examining a need for increased salaries for employees, including fire and police, and a planned hike in water rates for residential, commercial and industrial users, among other items.
"Senate Bill 2 has created a dynamic that we are going to be more aggressive this year than we would be otherwise," said Mayor Anthony Williams, citing recent legislation that will put harsh caps on future property tax increases.
The council went forward Monday, again in first reading, with a proposed tax rate of 79.68 cents per $100 of property value, a 2.46-cent increase over the previous year's rate.
For every $100,000 of property value, that would increase the tax burden $4.17 per month, or about $50 a year.
But anticipated gains in property value assessments may ultimately lower that number by almost a penny to 78.77 cents per $100, a decision the council will make later based on more accurate figures.
If needed, the council can reexamine the rate at its Thursday night regular meeting, or in future sessions.
"Today is not setting anything in stone," Councilman Kyle McAlister said.
There is time for both the community and the council to have further say, William said, describing the proposed budget as a "living organism," with the "opportunity to make needed modifications" still in place.
Some good news?
After Monday's meeting, City Manager Robert Hanna said the possible reduction in tax rate was "good news."
Even at the lower level, the rate would be sufficient to "fund fire and police at their needed levels," he said.
"It'll also fund necessary salary increases for our city employees that need the adjustments, especially our lower wage-earners," he said.
The reduced rate doesn't exactly equate to lower taxes, since it assumes higher property values to be plugged into the equation.
The city started estimating a bump of 3 percent in assessed property values.
The final rate likely will be closer to 5 percent, Hanna said.
The likely lower number is good, he said, in light of the restrictions Senate Bill 2 will impose on Texas cities and counties in an effort to reduce property taxes.
The bill, which goes into effect in January, requires municipalities and counties to receive voter approval before raising property taxes more than 3.5 percent.
Even with that looming, the goal was never to "grab all we can grab" under the current, far more generous 8 percent cap, Hanna said.
"It's an exercise in making sure we adequately fund city services in the light of Senate Bill 2," he said. "... If values are higher than we thought it would be, it would be wrong for me to recommend keeping the rate the same."
The council also heard about adoption of a five-year plan to adjust water utility rates.
Residential users can expect an annual adjustment of 5 cents per "unit" of 1,000 gallons to all tiers of consumption rate, with an annual adjustment of sewer base charges of 50 cents per account and an annual adjustment to sewer consumption rates of 15 cents per 1,000 gallons.
A residential customer paying, currently paying $53 for 5,000 gallons, would by year five pay $60.50, for example.
Personnel key to current budget
The council started with a proposed budget of $106.5 million in expenditures in its general fund, with a planned $106.6 million in anticipated revenue.
The city’s general fund is the principal fund of the city and is used to account for core government services, such as police, fire, streets, library services, parks and recreation, code compliance and building inspections.
Personnel costs make up about three-quarters of the general fund, and if there is a theme to the 2020 budget,Williams said, "it's personnel."
"Providing increases for police and fire, that is leading the conversation," he said.
Pay concerns for all employees also are major part of the budget, with some employees currently on the city's lowest pay scale not able to earn a livable wage.
Those costs need to be dealt with now, Hanna recently said, noting it will not be possible to adequately fund public safety obligations and non-civil service pay adjustments under Senate Bill 2's limits unless property taxes are increased in 2020.
Afternoon talks examined changes to the city's schedule of fees, the need for certain new personnel among 22 proposed and the potential fate of a glass recycling program.
Councilwoman Donna Albus, long a champion of local recycling, took a stand on the latter, stating that she had contacted at least one local plumbing company that said it would buy crushed glass instead of gravel, if available.
"I just think we've got to do our part, and this is something we can do," she said.
Keeping the program would require purchase of a new glass crusher, Hanna said.
The city's original glass crusher was purchased through a Council of Governments grant.
The cost of the crusher, around $100,000, and the attendant manpower required made continuing the program prohibitive, said Greg McAffrey, the city's director of public works.
Williams said he could see supporting such a program if it essentially made enough to offset its costs.
"This is one of those areas where staff at least feels the money we currently spend on that service could be better spent somewhere else," Hanna said.
However, "if there is a market out there, we could determine that," he said.
The elimination of recycable plastics met with no opposition.
The next phase for the budget process will be a public hearing and adoption of the 2019 revised budget at the council's Aug. 8 meeting.
Public hearings on the tax rate will be Aug. 22 and at a special meeting Sept. 5.
The final adoption of the 2020 budget, tax rate, and fee schedule, accompanied by public hearings, will be at the Sept. 12 regular council meeting.