Eligible Property Owners Will Benefit From 20% City Homestead Tax Exemption; 9% COLA Raise, Increased Longevity Pay Approved For City Employees
The regular Sulphur Springs City Council meeting was heavily focused on the budget, tax rate and impact of the economy on city finances. Some positives noted included ability of eligible Sulphur Springs property owners to benefit from a 20% homestead exemption on city property taxes for the first time; and a 9% cost of living increase, and increases in the certificate and longevity pay for city employees.
Tax Rate
Sulphur Springs City Council on first reading earlier this month approved a tax rate of 44 cents per $100 property value. This is the same tax rate the city maintained from 2002 to 2020. The tax rate was $0.42692 in the 2021 tax year, figured using the state formula to determine a taxing entity’s compressed tax rate.
The no-new-tax rate would impose the same amount of taxes as last year if you compare properties taxed in both years. The no-new-tax rate for Sulphur Springs for the 2022 tax year is $0.38333 per $100 property value. Adopting the no-new-revenue rate would lower taxes on a $100,000 home by $56.67. Adopting the no-new-revenue rate would lower the property tax levy by $694,865.
The voter approval-tax rate, the highest tax rate a taxing unit can adopt without holding an election, with one exception — the de minimis rate. The 2022 voter approval rate is $0.43204 per $100 property value.
The one exception to the voter approval tax rate is a de minimis rate. Sulphur Springs’ di minimis rate is figured at $0.46003 per $100 property value.
City officials at this time do not anticipate recommending any additional tax increases next year, so that’d be two consecutive years the rate would remain 44 cents.
Adopting a 44-cent tax rate in combination with the new 20% homestead exemption recently approved by the City Council should lower taxes on a $100,000 home $31.33 more than the no-new-revenue rate would if there were no homestead exemption, Sulphur Springs Assistant City Manager/Finance Director Lesa Smith pointed out at the Sept. 6 Council meeting.
For every 44 cents paid in city property taxes, $0.36547 will be spent on city maintenance and operations and the remaining $0.07453 will allow the City of Sulphur Springs to keep up with payments on its $19,268,539 debt obligations. That’s $913,500 going toward debt service this year, leaving $4,481,244 for operations.
The increase this year will help support a COLA and an increase in longevity pay, as well as increased costs for materials and services in order to more adequately fund police, fire, street, parks and recreation, and maintenance departments, city officials reported during the Sept. 6, 2022 City Council meeting. The police and fire budgets alone cost $6,777, 232, covering only 66% of public safety budgets.
The total estimated property tax revenue projected for the 2022 tax year is $5,394,744. Property taxes for FY 2022-2023 are expected to raise $401,593 (8.4%) more revenue than in FY 2021-2022, including $92,174 from new property added to the tax roll this year. The net taxable value of all taxable property within Sulphur springs for the upcoming fiscal year increased by 6.6% from $1,187,758,067 to $1,266,099,512.
The City Council approved the tax rate on first reading, following a public hearing and discussion. The City Council is scheduled to hold another public hearing regarding the tax rate, the will be asked to consider for final approval on second reading Ordinance No. 2812, setting the tax rate on Sept. 20, 2022.
FY 2022-2023 Budgeting
City officials, in the initial budget draft presented for City Council consideration over the summer, had originally budgeted for a 7% COLA for city employees. Council members asked city staff to see if they could find room in the budget for a higher increase; a 9% COLA was recommended and decided on. That’s the amount factored into the proposed FY 2022-2023 budget.
Assistant City Manger/HR Director Gordon Frazier presented a proposed personnel policy change by increasing longevity pay for city employees from $4 per month to $10, with longevity to be paid annually instead of monthly. He also proposed a change in certificate pay policy. In order to get the additional pay, city employees will be required to notify them when they’ve attained additional certification, placing the responsibility on the employee, who will be paid for it as promptly as it the appropriate documentation makes it to the appropriate city office. Also, the city proposes removing one word, gap, from the city’s medical insurance policy.
The City Council approved the personnel policy changes as recommended for longevity pay, certification pay and insurance.
Sulphur Springs Police Chief Jason Ricketson proposed allocating $20,000 from the city’s asset forfeiture budget for equipment such as body cameras worn by officers, radios, radar and similar items for the police department. The City Council agreed with the proposal.
At the request of City Council men, the amount the city contributes toward upkeep of City Cemetery and Mel Haven Cemetery also will increase in the FY 2022-2023 Budget to $500.
The City Council approved the budget as presented on first reading at the Sept. 7, 2022, meeting. Another public hearing over the budget will be conducted at the 7 p.m. meeting Tuesday, Sept. 20, 2022, then, the City Council will be asked to consider approving it on second and final approval, with the 2022-2023 FY budget to begin on Oct. 1, 2022.
2021-2022 Budget Adjustments
Overall, city officials anticipate completing the 2021-2022 budget year under budget, but some areas of the budget need to be updated. The general fund balance is expected to be OK at the conclusion of the year. A few department’s budgets will be a little over budget while others finish a little better than anticipated.
Smith reported in the 2021-2022 budget, the city had to come up with $106,888 in funding to cover costs of chemicals over the past year. So a budget amendment was required for that.
The finance director/assistant city manager also reported the revenue the county and hospital district contribute toward the TIFRZ is expected to be equal to or less than the amount contributed last year. The hospital district’s tax rate dropped from 25 cents to 22 cents this year, and based on the formula used by the state is expected to be set at just over 19 cents for the coming fiscal year. The county’s tax rate too has declined.
Smith noted that the actual property tax revenues collected this year were not as high as projected as actual valued, after some protests, lowered values. When certified values are higher than the actual rates that means less revenue to be raised. An audit by the Comptroller’s Office also requires some budgetary changes, including to the airport fund which spent more on fuel but also sold more in fuel, the cost of which reflects other changes in fuel prices.
For More Information
The Proposed 2022-2023 budget can be viewed on the city website, or by clicking here.
To view additional notices and worksheets for the proposed tax rate and budget, click here.
To view the Ordinance setting the tax rate, click here.
To view the appropriations Ordinance adopting the 2022-2023 budget, click here.
To view the Ordinance amending the 2021-2022 budget, click here.
To view the Ordinance setting the master fee schedules, click here
