Update for October 2, 2014
City: $22.8 million budget; tax rate stays same
By William Hoover
Hondo City Council on Monday went through a series of votes to approve ordinances adopting and funding an annual budget for the upcoming fiscal year. Council set the property tax rate at 40.89¢ per $100, the same rate as last year’s, to support the nearly $23 million budget.
“We reprinted copies of the budget with all the changes you requested rolled through it,” said City Manager Jeff Litchfield. “The total for the 13 funds is around $22,857,111 for expenses being projected for the 2014-15 fiscal year.”
“Again, we rolled through all the changes you recommended during the budget workshops,” he noted. “I think we had five workshops and about 15 hours worth of discussions on this year’s budget.”
“The proposed budget was delivered to you all on Friday in its entirety,” Mayor Jim Danner told council.
The effective tax rate for 2014-15, the rate which would generate the same amount of tax revenue as last year, was calculated at 38.97¢ per $100 valuation. Because the proposed rate is 40.89¢ per $100, this year’s budget increases revenues by around $59,000.
“This budget will raise taxes by 7.3% or $59,045 compared to the current year’s taxes,” said Litchfield of the effect of increases in property value from last year.
“Do you happen to remember the total of last year’s budget?” asked Danner.
“Our current budget is $22,400,958 because we’ve had adjustments during the year,” said Litchfield.
Place 4 Councilwoman Ann-Michelle Long offered the motion to adopt the budget and appropriate money to pay principal and interest due on city debt. The motion passed unanimously after a second from Place 3 Councilman Eric Torres.
City Attorney William “Mick” McKamie told council they needed to take a separate vote to ratify the 7.3% increase in property tax reflected in the budget.
“This vote has to be separate from the budget ordinance vote and separate from the tax rate ordinance vote,” said the attorney. “This is just a statutory requirement.”
Place 5 Councilman Johnny Villa offered the motion to ratify the tax increase. The motion passed unanimously after a second from Long.
“The budget you just adopted included keeping the rate at 40.89¢ and, because of the effective tax rate calculation, we have to present it in this format,” said Litchfield prefacing the vote on the property tax rate.
Place 1 Councilman John McAnelly offered the motion to adopt the ordinance establishing a tax rate of 40.89¢ per $100 property valuation for FY 2014-15. The motion passed unanimously after a second from Place 2 Councilman Sammy Nooner.
“We need two more motions on the tax rate,” said Danner of allocating the maintenance and operation and debt service portions of the tax rate.
Long offered the motion to adopt an ordinance setting the 2014-15 FY tax rate for maintenance and operation of the general government portion of the tax rate at 33.62¢ for each $100 valuation of property. The motion passed unanimously after a second by Villa.
Long offered the motion setting the 2014-15 FY tax rate for the debt service portion of the tax rate at 7.27¢ cents for each $100 valuation of property. The motion passed unanimously after a second by McAnelly.
“We got the budget approved and the tax rate approved,” said Danner summarizing the night’s action. “Congratulations, staff.”
On Tuesday, Litchfield said his budget goals were to continue to maintain the level of services currently provided to city residents while building reserves in the city’s main operating funds.
“We prepared a budget that continues to provide the same level of service as the current year and includes about $1.3 million in capital improvements,” he said. “We had one rate increase, which was the 7.3% increase in property taxes caused by us keeping our tax rate at last year’s rate.”
“I would call it a realistic budget,” he said. “We are only projecting known revenues and expenses. For example, while we expect to enter into a few more leases at the airport, we are not showing those leases as revenues. Once the leases are approved, we will come back and modify the budget to show the revised revenue stream.”
“This (budget) allows us to continue providing services to our customers and citizens while continuing our plan of building working capital and cash in our general and utility Funds,” he added.
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