by JEN BIUNDO
Facing about $180,000 anticipated in revenue shortfalls courtesy of a national recession, Buda councilmembers took their first look Tuesday night at a no-frills budget that could push the tax rate up by about three cents in the 2010-11 fiscal year.
In a 6-0 vote with Councilmember Cathy Chilcote absent, the council unanimously approved the proposed ad valorem tax rate of 25.67 cents per $100 of property valuation, the highest rate they could issue without triggering a potential rollback election. That would amount to an annual increase of about $55 for the average homeowner’s tax bill.
Though it remains lower than most neighboring cities, the 2010-11 rate would mark a 50 percent increase in five years from the 16.7 cent rate in the 2005-06 budget.
Meanwhile, the city has squeezed expenditures by $227,000. In a tight budget year, the city is holding back on large-scale capital improvement projects, said Buda City Manager Kenneth Williams, but aiming to provide the same level of existing services.
“This budget does not call for any cuts in services or cuts in staff,” Williams said. “We’re going to do less with less but we’re not cutting services or people to do that.”
Sales tax, which provides half of the city’s revenues, will likely continue its downward trajectory, said city finance director Chris Ruiz.
Last year the city projected $2.1 million in sales tax revenue, but will likely pull in only $1.97 million by the year’s end. In this budget cycle, the city is anticipating a further drop to $1.95 million.
Meanwhile, this year’s budget projects $1.47 million in property taxes, a marginal increase over last year, amounting to 12 percent of total revenue.
Just 8.8 cents of the property tax will go into the city’s general fund, with the remaining 16.9 cents paying off existing debt.
Buda’s new police department, scheduled to come online in September, is budgeted for just under $700,000. Most of the funds will go to personnel costs for the chief, seven police officers, one detective, and one administrative support position. Last year, the city paid $718,000 for contract law enforcement services with the Hays County Sheriff’s Office.
“We can provide an increased level of service for less money,” Williams said.
The new department is projected to bring in $240,000 in revenue from fines and tickets, up from $26,000 this year.
“That’s not going out there and being aggressive at all writing tickets,” Williams said.
Though most large-scale capital improvement projects may be delayed, this year’s $11.5 million budget does include $92,000 for street repairs and $50,000 toward development of a parks master plan.
The city is considering a mid-year three percent raise for city employees, amounting to just under $26,000. Staff did not receive a cost of living adjustment in last year’s budget.
The library budget dropped by 6.9 percent, from about $305,000 to $285,000, primarily due to about $20,000 in savings from staff reorganization. However, library patrons won’t see any cuts in services, Williams said.
Councilmembers also refrained from cutting donations from the hotel-motel tax fund to local organizations and events, such as the Buda Fine Arts Festival and the Lions Club. They also have $25,000 slated for July 4 fireworks, after this year’s $5,000 show received poor reviews from citizens. However, councilmembers said they wanted to see firm numbers next year showing that the events actually succeed in pulling tourists into the city.
“If the citizens want a really nice fireworks show, they deserve a really nice fireworks show, but maybe we ought to be raising property taxes to pay for it, rather than making questionable use of the hotel-motel tax to pay for it,” said Councilmember Ron Fletcher.
While noting that the city is using some money to start a police department, repair streets and develop parks, Councilmember Sandra Tenorio said that the overall budget remained relatively spartan.
“I do agree it’s a pretty tight budget, and I think sometimes you just have to do that when there’s no money,” Tenorio said. “And I think we’re in better shape than most cities.”
Following public hearing on Sept. 9 and 15, the council is scheduled to adopt a final budget on Sept. 21.
Buda Tax rate
2005/06 – 16.7 cents
2006/07 – 16.7 cents
2007/08 – 18.7 cents
2008/09 – 22.5 cents
2009/10 – 22.5 cents
2010/11 – 25.67 cents (proposed)
