The Hewitt City Council on Monday got its first look at upcoming budget challenges and how an increased tax rate could affect the budget.
Despite some of the news presented at the meeting, the budget situation is nowhere near as bad as last year’s predicament, city leaders said. A year ago the city faced high increases in health insurance costs and offered no employee raises, cost-of-living adjustments, no new personnel or vehicles for the police department.
The city has received the preliminary tax roll, the first report from the McLennan County Appraisal District about the appraised value of property, City Manager Adam Miles said. Figures show a 9.25 percent increase to the overall taxable valuation, Miles said.
The city of Hewitt’s estimated tax roll is more than $910 million, up from last year’s $842.7 million. In 2016, the amount was $775.3 million.
It will be another month before the certified tax roll is released, Miles said.
In 2017, the average home was valued at $169,793. Now, that figure is $186,948, Miles said.
Property taxes consist of the largest portion of the city’s general fund, which covers ongoing maintenance and operations, police, fire, parks, streets, the library, and other governmental services.
Hewitt has kept the same tax rate since fiscal year 2013-14: 53.9677 cents per $100 valuation.
In 2017 the city designated a higher portion of its tax rate — 21.41 cents — to go toward debt service. In 2014, almost 40 cents of the tax rate went to maintenance and operations, Miles said.
The city in December issued a $5 million certificate of obligation to improve Ritchie Road and buy a new fire truck and public safety radios. The majority of that debt will go toward Ritchie Road improvements. Miles reminded the council that at the time the debt was issued, the council was informed it was likely taxes would need to increase.
With the current projected tax rolls and the same tax rate, the city would generate about $4.91 million, or, $17,000 over what the current budget includes, Miles said.
The rollback rate is 56.8533 cents per $100 valuation.
If the city adopted the rollback rate, it would generate an additional $653,650 for the upcoming fiscal year, Miles said. That would leave the city almost $280,000, after paying off its debt.
Adopting the rollback tax rate would add about $4 a month to the average homeowners’ monthly bills, Miles said.
To balance the budget last year, the city made significant cuts, Miles said. However, the demand for services is still increasing, he said.
“Whether we like it or not people are moving to the Hewitt area and driving on our streets and using our parks,” Miles said.
The city’s health insurance costs will remain the same for the upcoming budget year, Miles said.
“Which is an incredible relief,” he said. “We just got beat hard last year.”
At the May 21 meeting Miles will present department head requests for new personnel and seek direction from the council on employee raises and cost-of-living adjustments.
“There are sergeants making more than our police chief,” Miles said. “If you lower your tax rate, probably have to start letting people go I think. It’s not sustainable.”
“Believe it or not, it’s not as horrible as last year,” Miles said.