BY MOSES LEOS III
Buda City Council members made their voices heard Tuesday night: The tax rate must go up.
In a 5-1 vote, with one member absent, city council voted to set the proposed tax rate at 29.79 cents per $100 valuation.
Raising the rate was not the expected route. On Aug. 6, the city’s finance department dis?closed the effective and rollback tax rates for the year. In that presentation, the department pro?posed the city lower its tax rate to 25.17 cents.
After crunching the numbers, the city determined it was not feasible, opting instead to go with 29.79 cents.
The reason was simple: 25.17 cents would not put the city in good financial straits.
“We would have done things, but put required fund balances below our required levels,” Buda City Manager Kenneth Williams said. “We want to keep them at required levels, which makes us a more financially viable city." Most council members agreed ?tion of Mayor Todd Ruge.
“I feel like the city finances are like a co-op: we all pay in,” Ruge said. “If there’s a chance to give back, I think we should.”
Council Member Eileen Altmiller warned her colleagues of the pitfalls of consistently low tax rates. She mentioned Kyle, where the city pulled money from its utility fund without raising taxes. The result was Kyle’s tax rate skyrocketing to 52.44 cents.
“Kyle tried to keep the tax rate too low for many years. They are suffering now,” Altmiller said.
Williams feels the city can work with the higher rate; which would still be one of the lowest in the area. The average Buda homeowner can expect to see an increase of $41.33 per year.
The city will see roughly $2.4 million dollars generated from the proposed rate.
During the first of six budget workshop meetings on Aug. 6, the city found a way to get the budget back in the black.
One solution – delay a highdollar project planned for this fiscal year. The city projected that it will be $651,803 under revenue this year.
That’s a far cry from budget workshops in early July. At that time, the Finance Department projected a shortfall of $846,923, mostly from the Water Utility Fund, which in July was about $1 million in the red.
The reason was several large Capital Improvement Projects (CIP) planned for 2013-14. One, the Westside Well project, has a price tag of $750,000. The city hoped to curb water needs from the Hays County Public Utility Agency (HCPUA) until 2017-18 with the well.
However, due to the high price tag, the decision was made to delay the project until FY 14-15.
With the tax rate going up, however, the project may still have life. Williams, said the Westside Well could jump back on the budget if the proposed tax rate stays at 29.79 cents.
“Right now, it’s not [on the budget]," he said. “We’ll have to take a look at it.”
Repairing Bonita Vista is the one project driving many of the city’s decisions this budget cycle. Currently, the proposed budget has the project in the General Fund. The city will move $3.1 million to the General Fund from their reserves from TexPool Investments to fund the project, which comes with a price tag of $2.2 to $2.6 million.
According to Williams, the city is going through design information with engineering firms. The city is still unsure how they will pay for it: through accruing debt or through a certificate of obligation. They will hash out the details during the budget cycle.
Buda residents will also see a rise in their water and wastewater rates.
Last year, the city raised rates by two percent for water, three for wastewater. With more CIP projects on the horizon, including a possible expansion of the city wastewater service, Buda looked to find a feasible rate.
The city brought in a third party, Grady Reed of the engineering firm HDR, to find that rate. Reed suggested a water rate increase of four percent, and a wastewater rate of two percent.
The average homeowner who uses 5,000 gallons of water and wastewater combined can expect to pay two dollars more per month. Those who use 10,000 gallons will spend three dollars extra.
Buda will hold two public hearings on the proposed rate increases on Aug. 28 and Sept. 3.
