Decision Points

City Manager proposes reduced budget for FY 2011 that includes additional police, new transit program

The Round Rock City Council will consider a fiscal 2011 General Fund budget that is almost $3 million less than the current budget, but adds police officers, a new transit program and establishes a parks maintenance fund.

Round Rock City Manager Jim Nuse submitted his budget proposal (pdf) to the City Council on Monday, Aug. 2. The proposed tax rate for the $81.1 million General Fund budget is 41 cents per $100 of valuation, which is one cent below the Effective Tax Rate.

The Effective Tax Rate provides the same amount of revenue collected from properties on the tax roll last year. This state-mandated rate calculation requires taxing entities to account for changes in the value of existing properties. This rate calculation, however, does not include new properties. Under the proposed rate, the owner of an average value home ($175,980) would pay $725.53. Under the Effective Tax Rate, they would pay $743.13.

More than $1 million in savings has been achieved by eliminating 24 budgeted positions through a public works reorganization, as well as implementing process efficiencies. The budget plan also proposes refinancing and early payment of portions of the City’s outstanding debt.

“Over the past two years, our employees accepted the challenge of cutting costs and working more efficiently and that hard work has paid off,” City Manager Jim Nuse said. “I’m especially proud of the reorganization of the public works departments, which has consolidated functions from three departments into two.”

The proposed budget also accomplishes a critical goal of the City’s financial management policy – reducing reliance on Dell sales tax revenue to fund daily operations. Currently, Dell sales tax revenue comprises 40 percent of the overall sales tax revenue. Next year, it will be 36 percent.

“While sales tax revenue has rebounded somewhat this fiscal year, we must continue to systematically reduce our reliance on it to fund day-to-day expenses to maintain our long-term fiscal sustainability,” Nuse said. “This budget proposal takes another step toward accomplishing that key City Council goal.”

The City’s target is to systematically reduce its reliance on Dell to 20 percent of overall sales tax revenue for operations by 2017.

The budget includes four new police officer positions and $300,000 for a new Peak Hour Express Bus and Reverse Commute program. It also earmarks $750,000 to establish a fund for parks capital maintenance and replacement.

Tax rate-stormwater fee impact

The proposed tax rate is one cent below the Effective Tax Rate to reflect the transfer of the stormwater drainage costs out of the General Fund into a new utility. That revenue will now be collected through a new fee on monthly utility bills. We anticipate implementing the new fee in spring 2011. Fees will be based on a property’s impact to the drainage system, which would more appropriately and fairly allocate the costs for storm water services while providing vital funding stability.

If the City Council adopted the Effective Tax Rate of 42 cents per $100 of valuation, the owner of an average value home would pay $17.60 more than the proposed 41 cent tax rate. We estimate a homeowner will pay about $18 next fiscal year through the new drainage utility fee.

Retail water and wastewater rates are unchanged for fiscal 2011.

Overall FY 2011 proposed budget

General Fund $81.1 million
Debt Service Fund $12.8 million
Water/Wastewater Utility Fund $38.8 million
Drainage Utility Fund $1.6 million
TOTAL $134.3 million
Posted: Aug 02 2010, 01:54 PM by Will Hampton | with no comments
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