By Brittany Anderson
BUDA — With inflation, labor shortages and a potential looming recession, leaders within the city of Buda have worked hard to create a budget that will address resident needs, such as maintaining a low tax rate while funding much-needed projects to improve the city and keep up with growth.
The Buda City Council received a presentation on the proposed fiscal year 2023 city budget during a special meeting on Aug. 9. City Manager Micah Grau said that this budget is the largest in Buda history.
“That’s probably true most years, but with the bond implementation program from the 2021 bonds, the total budget exceeds $102 million, which are big city numbers when we start talking about a budget like that,” Grau said.
The budget totals $102,323,229 in expenses, which is about $32.4 million higher than the FY 2022 budget, and $50.1 million in revenues. The budget also includes $53.4 million in capital projects. Some projects that are currently underway and funded in the current budget will be carried over to the FY 2023 budget at the closeout of FY 2022.
In keeping with the larger 2036 Strategic Plan, the city developed a few major budget priorities: Broadband, development process improvement and economic expansion, downtown parking, employee retention, mobility, sidewalks and infrastructure, parks enhancements and public safety enhancements.
The budget includes $16.7 million for the General Fund, $14.1 million for the Water and Wastewater Funds, $50.1 million for Capital Improvement Funds, $6.7 million for the Debt Service Fund, $1.2 million for the Hotel/Motel Fund, $2.2 million for the Local Government Corporation, $4.1 million for the Economic Development Corporation, $2 million for the Sanitation Fund and $4.2 million for other special revenue funds.
With residents and businesses feeling the economic pressure, the budget proposes the tax rate per $100 valuation is budgeted to remain flat at $0.3423, unchanged from FY 2021-22, and remains one of the lowest municipal tax rates in the state for full-service cities.
Because of increases in appraised value on existing properties, the Maintenance and Operations portion of the tax rate will decrease to $0.0926 per $100 of valuation. This will generate less property tax revenue than the previous fiscal year by approximately $28.5K.
The city logged record highs for sales tax collection this year. The sales tax is budgeted to increase 5% in FY 2023, which is considerably less than the 19.8% experienced in actual collections in FY 2022.
The Interest and Sinking portion of the rate will increase from $0.2336 to $0.2497 in support of the new debt the city issued in 2021 for the approved general obligation bonds approved that November.
Within the General Fund, the city’s main governmental fund, the majority of its expenses are related to public safety. The police department budget is increasing by 31%, largely due to the city’s portion of the Combined Emergency Communications Center at $598,000, paying a pro rata share of the cost for the facility and to operate the new emergency communications center. Two new sworn officers including a lieutenant and patrol officer are also being added per a staffing study recommendation this year.
The budget also proposes a combined average utility rate increase of 15% on customers’ water and wastewater bills. For the average home using 7,500 gallons of water per month and 5,000 gallons of wastewater, the rate increase will equal approximately $16.20 more per month, depending on usage.
The increase is necessary to pay for rising costs of operation including water supplies, debt payments associated with the new Alliance Regional Water Association supply, debt service costs associated with expanding system capacity and lower than anticipated growth. Rates are expected to stabilize in 2025.
To minimize the rate increase, instead of the usual 7% of expenses reimbursement to the General Fund from the Water Fund, only $100,000 is proposed to be transferred this year.
Ultimately, Grau said that FY 2023 will be a “year of transition” as the city works with new leaders and continues its conservative financial management approach, despite high inflation and an uncertain economic future.
A courtesy public hearing on the proposed tax rate and budget will be held during the regular council meeting on Sept. 6. The statutory public hearing will be held on Sept. 20 during the regular council meeting, where council will take a vote on the tax rate and budget.
FY 2023 begins Oct. 1 and will end Sept. 30, 2023. The budget draft can be viewed on the City of Buda website at www.ci.buda.tx.us/131/Budget.
