It’s budget time for local governments. In municipalities like ours, the mayor works with the city administrator and city staff to put together a budget to submit to the Council for its review.

This year, due to the tendency of some to dabble in half-truths and to routinely criticize Mayor (Pam) Miller and City Administrator (Michael) Leamons on social media, the administration decided to ask the Council for guidance on the more controversial aspects of the budget prior to completing a draft proposal. So, at the May 11 Council meeting, guidance was solicited and received on the following:

Oakdale Park — Since the status of Oakdale Park won’t be known until after the July 30 bid opening, Council was asked whether to prepare one budget based on the assumption that Oakdale Park would be sold, or whether to prepare two budgets. If the City is able to sell Oakdale Park, about $300,000 (the amount used to service the debt and subsidize capital improvements at Oakdale) will be freed up for other purposes. The Council asked staff to prepare a budget that assumes Oakdale Park will not be sold.

Employee pay raises — The city usually provides annual pay raises. The administration was concerned about doing so this year due to the hardships which have been experienced by some of our citizens because of COVID 19. The Council asked that raises be included in the budget.

Contributions — The Council was asked whether or not to include the contributions from this year’s budget in next year’s budget, including $1,000 for Crime Stoppers, $2,500 for the Fire Department, $15,000 for the Transit Authority, and $3,000 for the Citizen’s Center. Council asked that they be included.

Homestead Exemptions — Recently, Councilman (Johnny) Martin asked that the city offer homestead exemptions to match those offered by Somervell County, which include a 20% homestead exemption for all ages and an additional $50,000 homestead exemption for those over 65.

Currently, the city only offers a $25,000 homestead exemption for those over 65. The 20% homestead exemption would lower the tax bill on a $200,000 home by about $150/year.

Providing the homestead exemptions will reduce the city’s ad valorem tax revenue by about $77,000/year. It’s unusual for cities to provide these type of homestead exemptions, especially in the amounts being considered. The Council asked that the exemptions be included in the budget. If Oakdale Park is sold, covering the cost of the exemptions will be easy. If it isn’t, not so much.

While considering property taxes, here’s how Glen Rose’s 38 cent per $100 valuation 2019 tax rate stacks up against those of surrounding communities: Cleburne, 77 cents; Granbury, 40 cents; Hico, 73 cents; Meridian, 50 cents; and Stephenville, 47 cents. Not bad!

Utility rates — Council was reminded that the city’s utility doesn’t bring in enough revenue to cover operating costs, debt service, and needed capital improvement projects. The administration identified two areas where rates could be raised, but still be in line with what other communities are charging. The city’s water rates haven’t been raised since 2011. The city’s rate for base water service and 5,000 gallons of usage is $40.60, or about 5% under the $42.10 average billing cost for cities between 2,001 - 5,000 or 12% under the $45.27 average for cities under 2,000 population, per a Texas Municipal League survey.

A 6% increase, which would increase the monthly cost of base service and 5,000 gallons of usage from $40.60 to $43.04, or $2.44/per month, annually should generate about $63,000 additional revenue for the utility. The increase would be equivalent to about a % increase per year over the past 9 years, if the city had increased the rate every year instead of waiting to do it all at once.

The Council was reminded how prior to last year, the city had passed the cost of trash collection straight through without any markup. That is a highly unusual practice, as cities experience costs handling the trash collection business, including billing, scheduling or cancelling service, handling complaints, etc. The city is also responsible for paying for service, whether or not a customer pays.  Thankfully, in most cases the customer’s deposit is sufficient to cover the cost of unpaid bills, but sometimes it falls on the city.

Last year, the Council agreed to a 5% markup on trash collection costs. This year, the Council was asked if it would consider increasing it another 5%, which would increase the cost to a customer paying for one poly cart/week by 52 cents/month.

Currently, the city is charging $10.40/month for weekly collection of one poly cart, which compares favorably to what surrounding cities are charging for the same service: Cleburne, $16.80; Granbury, $14.86 (no poly cart provided); Hico, $13.55; Meridian, $15.95; and,

Stephenville, $11.58 (only offers twice a week pickup). Even with the proposed increase, a new $10.92 rate still looks good.

The proposed trash rate increase is expected to yield about $22,000/year in additional revenue.

So, combined with the water rate increase, the utility would see about an additional $85,000 in revenue. The Council asked that the utility rate increases be included in the initial budget proposal.