City of Tyler issued the following announcement.
Tyler City Manager Edward Broussard presented the proposed 2020-21 budget for City of Tyler services and programs to the City Council on Wednesday morning. At a little more than $202 million, this budget is a 3% decrease in spending from the prior year.
“In my two decades of leading municipal governments, this has been the most difficult year that I’ve seen for budget administration and development,” said City Manager Edward Broussard.
Recognizing the economic hardships that many residents in Tyler have had to endure through COVID-19, the budget adopts the “no new revenue” rate of 25.9 cent, which is a .09 cent decrease from the prior year. With this adoption, the City of Tyler will continue to keep the lowest tax rate for a city over 15,000 residents in the State of Texas.
Broussard acknowledged that keeping property tax flat at this time is difficult due to the stressors of COVID-19 on revenue streams. Sales tax collections, which makes up 42 percent of the City’s general fund, remained stagnant, while revenues from Hotel Occupancy Tax are estimated to be $1.2 million below initial budget estimates for fiscal year 2020.
“We will absorb these shortfalls and continue to provide key services, as local governments will not receive State and Federal bail outs for our revenue losses on sales tax, hotel occupancy tax, and other revenue streams,” said Broussard.
While some of the costs directly related to COVID-19 mitigation efforts may be eligible for reimbursement by the State, the City acknowledged that the restrictions placed on these funds make reimbursements challenging.
“We are working with the State of Texas and FEMA for reimbursements for our public health and safety costs directly related to COVID-19, but these reimbursements aren’t a guarantee,” said Broussard.
Despite these hurdles, the City is still committed to mitigating the impact of COVID-19 and moving forward on key projects and initiatives, which include moving forward the modernization of the City’s traffic signals, and will again dedicate two cents of the property tax rate to the Quality Street Commitment fund to improve city-owned roadways. This will equal roughly 83 miles of improved roadways during 2021.
“While our focus has shifted for the past few months due to the pandemic, this organization has continued to make progress in the work plans set out through the Fiscal Year 2020 budget,” said Broussard.
The City will spend $27,578,72 on capital projects paid for in cash by the half-cent sales tax fund. The Half-Cent Sales Tax has been vital to building new roads and facilities, improving parks, investing in drainage and rebuilding city streets. This budget, called the Capital Improvement budget, will be adopted at a later date.
“We are able to keep our tax rate low because we decided years ago to eliminate our bond debt and pay cash for capital projects, using a dedicated half-cent from sales tax generated within our community,” said City of Tyler Mayor Martin Heines.
Finally, the City of Tyler has several departments that are considered enterprise funds, meaning they do not receive tax revenue and must generate their funding through fees for services they provide. This funding is then returned to their operation in the form of maintenance, repair and replacement of equipment.
The largest enterprise fund within the City is Tyler Water Utilities. The City is proposing to change the current water rate structure from declining to inclining, also known as a water conservation rate structure.
Under the current structure, the more water a customer uses the lower the unit cost. The new proposed water rate structure will be an inclining rate structure meaning the more water a customer uses the more each unit costs.
“This new rate structure encourages responsible water usage that will lead to conservation” said Broussard.
By adopting a water conservation rate structure, the City of Tyler will also be eligible to finance water and sewer projects through the Texas Water Development Board, whose competitive rates are projected to save TWU customers around $74.5 million over a 30-year period.
“In 2017, the City of Tyler signed a Consent Decree with the Federal Government that mandates $250 million dollars of waste-water system improvements that must be implemented by April 2027,” said Broussard. “This will keep interest low on those bonded projects and save the rate payers money.”
The proposed inclining rates were developed by staff and an outside rate consultant in 2019 and are designed to generate the same amount of revenue. If this budget is adopted, it is expected the new rates would take effect in September 2021.
Additional Highlights
Public Safety (General Fund)
Two new funded Police Officers (partially funded through the U.S. Department of Justice COPS grant)
Water & Sewer (Enterprise Fund)
TWU is also proposing a $2 dollar water base rate increase and a $2 dollar sewer base rate increase for FY2021. These base increases will increase the water franchise fee by $0.20 and the storm water collection fee by $0.24. The new total to customers will be $4.44.
Solid Waste (Enterprise Fund)
Solid Waste is also recommending an increase to residential rates, proposing a 33-cent per month increase for twice weekly residential trash pickup.
“Residential trash pickup has been historically subsidized by commercial trash services,” said Broussard. “As we move away from this practice, these increases become necessary to maintain a twice-weekly trash pickup service.”
Development Services (Enterprise Fund)
Development Services is recommending an increase to permit fees to achieve a flat rate of 25 cents per square foot for residential new construction permits. This change is necessary to meet the recently enacted State law requirement that the city convert its residential permit fee structure from a home valuation basis to a price per square foot basis.
“Research of comparison cities finds that the City of Tyler is the only city that funds Development Services functions exclusively through permit and application fees,” said Broussard. “The City of Tyler also does not charge impact fees which reduces the cost of the permit in comparison with other cities of similar size.”
With this new structure, the City will remain one of the lowest cost per square foot for a city our size.
Public Input
Opportunities for public input on the budget are available by attending the next City Council meeting at Tyler City Hall, 212 N. Bonner Ave. on the following date:
- Wednesday, August 26 at 9 a.m.
Original source can be found here.
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