Terrell taxpayers will see the same municipal tax rate as last year under a preliminary budget presented to the council Tuesday night.
Increases in water, wastewater and sanitation, however, appear in the works. The council voted unanimously to call a public hearing on the proposed budget to be in compliance with recently enacted Senate Bill 2.
The city is projecting general fund expenses of $29.9 million, supported in part by a property tax rate of 76.42 cents per $100 valuation. The city’s certified taxable value grew from about $1.3 billion last year to $1.45 billion this year, which will give it roughly $720,000 more in tax revenue.
About $290,000 of that will go toward 4% raises for members of the police and fire departments.
“Our police and fire have lagged behind competing cities for years, and it makes it really hard for us to compete in that labor market,” explained City Manager Mike Sims. Other municipal employees will not see a raise this year, he said.
A lack of raises for employees is not typical in Terrell, according to Sims. Normally, the city tries to make an across-the-board market adjustment for everybody. “But it just wasn’t something that was affordable this year,” said Sims.
The city also is budgeting about $70,000 more for its municipal court operation, $160,000 for information technology deferred maintenance and upgrades, and $200,000 for emergency management service and COVID-19-related expenses. Levels of spending for other city functions remain largely the same.
On the utility side, the city is budgeting a 2% increase in water charges. Last year, water ratepayers saw an 8.5% hike. Much of that increased revenue went toward an automated meter system that will allow meters to be read remotely. The city eyes a 6% increase in wastewater charges and a 4% increase in sanitation.
Although property tax revenue will increase, the city is projecting flat revenues from its sales and use tax collections. In years past, City Hall could bank on growing revenues from sales taxes, which account for about 46% of the city’s general fund revenues.
“We haven’t had a year where we’re projecting flat sales taxes since 2010,” said Sims. This year, the city is projecting $13.5 million, the same as last year as COVID-19 continues to weigh on the economy.
The city is expected to head into its new fiscal year on Oct. 1 with about $2.3 million in its fund balance, good for about one month of operating expenses.