BUDA — Since March, City of Buda officials have been working to draft a budget to present to the city council to be adopted on Sept. 19. At its regularly scheduled meeting on Tuesday, Aug. 15, Buda City Council received a presentation on the draft budget by City Manager Micah Grau.
“It’s quite an exciting night. As you know, the budget process takes quite a bit of our efforts during spring and summer and tonight, we’re here to talk about the 2023-24 operating budget,” Grau said. “We do not create this budget in a vacuum. The city council has adopted a number of comprehensive financial policies, as well as guidelines from the city charter. But this is the culmination of months of work by city staff and council.”
According to the presentation, the city faces a few challenges for the FY 2023-24 budget, including balancing needs versus wants, while working to minimize fees and taxes. The tax rate will decrease; however, due to increased valuations, taxes paid by the average home owner are expected to increase slightly.
“I think this year’s budget does a good job of both lowering taxes and putting a lot more money into our infrastructure this year, so we’re not sacrificing one for the other,” Grau said. “We’re truly balancing the budget, not only in terms of revenues and expenditures, but also meeting the needs we have throughout the community.”
Additional challenges include fee adjustments proposed in order to comply with House Bill 3492 for development-related fees, with utilities to increase a combined average of 5%. In regard to revenues, growth is stagnant in the utility customer base and water restrictions and investment income is increasing.
The FY 2024 budget includes the following key points:
• Provides funding supporting the city's population of more than 18,000 residents, covering 9.2 square miles
• Provides 5% cost of living adjustment for city employees in order to retain and attract employees
• Lowers the property tax rate from $0.3423 to $0.3379
• Sales tax projected to grow 5.5%
• Includes an average 5% combined water/wastewater rate increase
• No sanitation rate change
• Addresses priorities identified by the city council
• Maintains a balanced budget for ongoing expenses and proposes non-recurring use of excess fund balance
Property tax assessed valuation has increased from $2,531,744,510 to $2,823,351,788.
“That’s the total value of the city,” Grau explained. “Some of that is new growth and new development, other parts are just rising values and average home growth.”
General fund property tax revenue has increased by $145,801. Sales tax is projected to total $8,950,678, up from $8,484,261. The biggest change, the city manager stressed, is to the interest earnings at $2,599,723, up from $210,000.
“That’s a big difference in one year,” Grau said.
In expenditures, the total budget from FY 2023 is increasing from $102,559,173 to $106,714,173. However, the operating budget is decreasing from $49,433,567 to $49,162,456, with increases in total salaries and benefits, total supplies and materials, total repairs and maintenance and tool designated services, while total debt service is decreasing in addition to total transfers and other.
The total ending fund balance is $53,053,355 compared to last year at $24,923,003.
“A lot of that is bolstered by proposed debt to be used for our 2021 bond program,” Grau said.
Council budget priorities included the following: mobility, sidewalks and infrastructure, such as the road maintenance program, trail/sidewalk gaps and bond program implementation; fixing City Park and Garrison Park, as well as Sportsplex repairs; community policing; communicating development processes and retail recruitment and continuing to decrease review times; downtown parking; low tax rate; employee retention; grant funding; and a public arts program.
“These were priorities identified by city council at a vision workshop back in March,” Grau said.
The next step in the process is to hold the first public hearing on the budget and tax rate on Sept. 5, with a second public hearing on the tax rate and the first and final reading of an ordinance to adopt the budget and tax rate on Sept. 19. The new fiscal year begins on Oct. 1.
To view the city of Buda FY 2024 budget, visit bit.ly/448ZrYQ.
