Buda council hears proposed budget ahead of September adoption

BUDA — A month before the scheduled adoption, Buda City Manager Micah Grau and Director of Finance Bianca Redmon presented the proposed $85.6 million budget to the city council at a special called meeting on Thursday, Aug. 15.

“The proposed budget document is more than a book of numbers. It tells a story —  the story of Buda and the outstanding programs and services to our residents,” Grau said in the beginning of his presentation. “The theme we chose this year is ‘Heroes Among Us’ because it highlights the hard work and dedication of the employees, elected officials and volunteers that make the city run. If not for these outstanding heroes, we would not be able to offer the high-level services that we offer.”

As it is currently proposed, the budget totals to $85,595,135 in expenditures and is broken up into seven different funds: general at $21,193,029, governmental debt service at $8,009,734, special revenue at $8,633,528, utility at $19,489,504, utility CIP (capital improvement projects) at $9,793,654, governmental CIP at $12,544,670 and other funds at $5,931,016.

Compared to the previous year’s budget, the FY 25 expenditures have a 16% increase in salaries and benefits, 118% decrease in supplies and materials, 0% increase/decrease in repairs and maintenance, 1% decrease in designated services, 42% decrease in capital outlay and 58% decrease in transfers out.

The total proposed revenue is $82,338,928. As compared to last year, taxes are down by 3%, permits and licenses have increased by 118%, fees have increased by 6%, transfers in have decreased by 58% and miscellaneous revenue has decreased by 32%.

Highlights of the budget, as presented, are listed below.

• Meets charter and financial policy requirements

• Balanced budget – recurring revenues cover recurring expenses

• Fund balance policy requirements met

• Minimized utility rate increase – 6% water and 3% wastewater are less than projected

• Employee pay adjustments to match pay to market

• Decreased costs for employee wellness insurances

• Adds 5.5 full time equivalent positions to meet increasing workload needs

• Restructure operations for efficiencies

• New super team created: “Community Relations and Destination Services”  and parks department reorganization

Employee compensation, out of the general fund alone, totals to $1.1 million. The cost-of-living adjustment (3%) costs $219,000, the compensation study costs $726,000 and the public works/parks pay plan costs $156,000, according to Redmon.

Priorities in the FY 25 budget include: mobility and infrastructure; sportsplex, city park and interactive/playable art in parks; public safety; employee retention; bond implementation; and financials/low-cost services.

In the presentation, Grau explained that there were challenges that the city faced while developing the budget this year: choosing priorities, rising costs due to inflation and demands for service increasing due to growth.

“We always face the challenge of choosing our priorities and having to be selective of those because our wants and needs often outplay our available resources. We have to be very deliberate in choosing what moves forward and what does not,” he said. “We had 29 new position requests submitted by departments and we are only looking at adding 5.5. We are also dealing with costs rising due to inflation. Although inflation has cooled, things are still catching up in terms of the costs of materials and we are also facing aging infrastructure.”

The city of Buda is also proposing a 5% increase for its tax rate. The proposed FY 25 tax rate is $0.3395 per $100 assessed valuation — it was $0.3379 in FY 2024 and $0.3423 in FY 2023. The proposed tax rate is the voter-approval rate and tax rate calculations were performed by the Hays County Tax Office.

The total taxable value for tax year 2023 certified was $3,016,069,903 — which includes the values for both with and without the Tax Increment Investment Zone (TIRZ) — while it is $3,207,853,344 for tax year 2024 certified.

“For taxable value without the TIRZ, we are looking at about a 14% increase. Also, as a reminder, the TIRZ 1 has dropped off [and] has expired for July of 2024 and then, we added the new TIRZ, TIRZ 2, which reflects the zone for The Colony,” Redmon said. “The certified value that came back then was [a] very minimal impact, but the captured value was $242,000 of that incremental value, so a drop-off on the TIRZ value, but all of that is shifted back to the city for that Zone 1. So, the overall impact is about 6%.”

In 2025, the average household will pay $121 in city property taxes per month, which is down from $132 in 2024, Redmon explained: “Most of that covers debt service, general government, public safety, public works, parks and rec, community services and building and development.”

The FY 25 budget has not been voted on yet by the Buda City Council. A public hearing will be held on both the budget and tax rate on Sept. 3 and then, the second public hearing on the tax rate, along with first and final ordinances to adopt the budget and tax rate will be held on Sept. 17.

To read more about the FY 25 budget, and see a full breakdown of the priorities included, visit www.budatx.gov/131/Budget. The full presentation by Grau and Redmon can be found at www.budatx.gov/390/City-Council-Board-Commission-Meetings.