After a public hearing on Thursday, New Braunfels City Council members unanimously gave initial approvals to a balanced $281.6 million budget for fiscal year 2020-21 and a slight property tax rate reduction to support it.
The proposed budget was calculated with a 2020 proposed combined tax rate of 48.3194 cents per $100 assessed property valuation, a reduction of about a half-cent to the current tax rate of 48.822 cents. The 2020 no-new-revenue tax rate, also known as the effective tax rate, is 44.702 cents, and the voter approval tax rate
is 48.3194 cents.
The rate for operations and maintenance, the city’s primary operating fund, decreases about 1.7 cents, entirely driven by the reduced voter approval threshold from 8% to 3.5%.
Senate Bill 2, passed by state lawmakers last session, prevents public entities from raising tax rates by more than 3.5% annually without voter approval.
The interest and sinking rate, used for debt service, would increase by about 1.2 cents.
Council members will consider approval of the second reading of the proposed budget and tax rate during a meeting set for 6 p.m. Monday in the council chambers at New Braunfels City Hall.
The proposed budget does not include any compensation increases for employees. Apart from the solid waste department, the budget also does not include any new positions.
General Fund employee expenditures represent nearly 75% of total expenditures.
The proposed budget includes $600,000 in economic recovery funds to implement a second round of the small business grant program.
All city funds will total $281,556,810, combining $235,861,114 in budgeted expenditures with $45,705,696 in year-ending fund balance. That’s an increase of about $38.9 million from the current adopted budget, driven almost entirely by the 2019 bond program. About $55 million is allocated to support the 2019 bond projects.
Bond projects include replacement of fire stations No. 2 and No. 3, expected to begin this fall, the construction of the Police Department and Veterans Memorial and expansion of the Westside Community Center, both expected to begin in 2021.
The budget allocates funding associated with the Farm-to-Market Road 306 property and facility transfer of $5 million and the construction of Fire Station No.7 and a fire training facility of $12 million.
Adjusted city appraisals of certified values in Comal and Guadalupe counties increased from $8.46 billion in 2019 to $9.38 billion this year, with taxable values rising from $7.199 billion to $7.938 billion, an increase of 10.1%.
General fund revenues, which support the majority of the city’s core services, are projected at nearly $73.1 million, an increase of about $500,000, with general fund expenditures totaling $73.4 million, about 2% less than last year.
Sales taxes (31.2%), property taxes (30%) and other taxes and franchise fees (14.2%) make up nearly 75% of all general fund revenue sources.
“The (city’s) finance team is monitoring these revenue sources more closely in comparison to previous years,” Chief Financial Officer Jared Werner told council members. “We want to see how close we can get to hitting those estimates and seeing how the impact from COVID-19 will end up being.”
Werner told council members of strategies the city can implement if there are unforeseen revenue shortages during the fiscal year.
Capital funds will total $100.9 million, with capital improvement projects and public safety receiving the largest slices of budgeted expenditures. Public safety comprises 54% of all general fund services; the overall budget maintains the city’s 30% fund balance.
The budget is expected to raise more total property taxes than last year’s budget by $3,120,490 or 9.1%. Of that amount, $1,184,768 is tax revenue to be raised from new property added to the tax roll this year.
A copy of the proposed budget and plan of municipal services is on file in the City Secretary’s Office for public inspection between the hours of 8 a.m. and 5 p.m. Monday through Friday at the New Braunfels City Hall, 550 Landa St., and at the reception desk at the New Braunfels Municipal building.
A copy is also on reserve at the New Braunfels Public Library, 700 East Common St., during regular library hours.
A copy is also available on the city website at www.nbtexas.org.
The new fiscal year begins Oct. 1.