San Marcos City Council Approves FY 2020 Budget, Water-Related Fee Increases On First Of Two Readings, Approves 2019 Tax Rate

By, Terra Rivers, Managing Editor

The San Marcos City Council held a public hearing on the Fiscal Year 2020 Budget, rate increases for eater, Wholesale Water, Reclaimed Water, Wastewater Treatment and Sewer Surcharges and the 2019 Tax Rate.

Council held the first public hearing and voted 7-0 to adopt a $239,058,970 budget, authorizing certain adjustments to the budget with the approval of the city manager, the 2020 Capital Improvements Program and adopting a fee schedule for Fiscal Year 2020 on the first of two readings.

Assistant Director of Finance, Melissa Neel, said the FY 2020 Budget includes a 4.2 percent, or $9.7 million, increase from fiscal year 2019.

According to staff, the budget is balanced and meets all criteria set forth in the City’s Financial Policy.

The budget policy was formulated in February after council held a budget policy workshop in February and held visioning workshops to choose their Strategic Initiatives in January.

The strategic initiatives are:

• Workforce Housing
• Multi Model Transportation
• Workforce Development
• Downtown Vitality
• City Facilities

This proposed budget includes funding for improvements to city facilities, continues funding for public transit, and allocates new funding for projects in the Downtown and workforce development.

The budget includes directives from the Budget Policy including:

• Maintaining current tax rate
• Merit and cost of living increases for all employees
• 5% Health insurance adjustment
• Social Services, youth services, and museum funding
• Allocation of $200,000 previously used for potential future economic development incentives to an economic development comprehensive program including a staff position, supplies, and programmatic funding
• Departmental budgets held flat

The budget also includes a 5 percent rate adjustment to the water utility rate and a wastewater utility rate adjustment of 3 percent.

Council member Lisa Prewitt noted that this was the fourth year in the city’s five year proposed increase plan.

Finance Director for the City of San Marcos, Heather Hurlbert, said the city models the wastewater and water utility rates on an annual basis to see if there is an opportunity to reduce the increase each year; however, the city has seen an increase in the total Alliance Regional Water Authority Project costs.

The project is projected to supply San Marcos with an additional 50 year water supply once it is fully implemented.

According Hurlbert, the Citizen’s Utility Advisory Board recommends continuing the practice of implementing small increases annually over the next two to four years in order to offset a potentially much larger adjustment of twenty-five to thirty-five percent as the debt for the project is issued over several years.

The average homeowner will see an increase of $3.95 per month or $47.44 annually on their residential bill.

The City of San Marcos is proposing to maintain the current tax rate of $0.6139 cents on each $100 of taxable value of real property that is not exempt from taxation for the tax year of 2019.

By maintaining the current tax rate, property taxes on new and existing properties will generate $3,609,775, or 11.7 percent, more than in FY 2019. Of that, $815,568 will be raised from new property and improvements added to the roll this year.

For Fiscal Year 2020, the debt to operations ration of the tax rate is 33.7 percent (debt service) to 66.3 percent (operations).

The budget and water, wholesale water, reclaimed water, wastewater treatment and sewer surcharges was approved with a 7-0 vote on the first of two readings. No one spoke during the public hearings on these items.

Council also approved the Tax Rate for the 2019 Tax Year at $0.6139 on the second of two readings with a 7-0 vote.

The FY 2020 Budget and water, wholesale water, reclaimed water, wastewater treatment and sewer surcharges will return for a final vote and approval on September 17.