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City budget planning begins

by | Jun 3, 2015 | Latest

Preliminary figures to be presented June 9

By Joe Reavis

[email protected]

The fiscal year 2015-16 city of Wylie budget gets its first viewing next week as part of a city council work session.

At that time—the council session is at 6 p.m. Tuesday, June 9, at City Hall—preliminary figures that include the wish lists of department heads will be presented. The budget and accompanying property tax rate will be adopted this summer after council members have worked through the numbers.

The city budget is divided into several components, or funds, general, enterprise, special revenue and debt service. Largest two are general, which pays for municipal services such as police and fire departments, parks, streets, court, administration, library and animal control, and enterprise, which encompass water, sewer and trash services.

All totaled, the budget passed by the council last year listed expenses of $77.03 million.

General fund expenses were $31.15 million, paid for through a combination of property taxes, sales taxes, fees, licenses and permits and revenue from other governmental entities totaling $29.85 million. Largest single revenue stream, $16.54 million, is from property taxes.

The enterprise fund is run much like a business, with revenues generated from sales of utility services adequate to pay the bills. Enterprise revenues were estimated at $13.59 million versus expenses of $14.57 million. The difference in revenues and expenses was to be made up with funds carries over from the prior year.

In working out a budget, the council has the most input into the general fund, its revenue and expenses. For example, council members give final approval to the property tax levy and will do so after Collin Central Appraisal District certifies values in July.

Setting the tax rate not as simple as it sounds because three calculations come into play, the actual rate, rollback rate and effective rate. The actual rate is the levy assessed by a taxing agency, the effective rate is the levy that raises the same amount of revenue as in the prior year and the rollback rate is eight percent above the effective rate that if hit can trigger an election by voters to reduce the levy.

The tricky part is that a governmental entity can set an actual rate less than the prior year’s actual rate and although it appears if taxes have been cut, they have not. Because increased property valuations come into play, a true tax cut is one in which the levy is set at less than the effective rate.

Wylie council members, for example, reduced the actual rate in each of the last two years, from 88.89 cents per $100 assessed property valuation in 2012, to 88.39 cents in 2013, to 87.89 cents in 2014. In the last two years, the effective property tax rate in Wylie was 3.13 cents and 4.66 cents more than the effective rate, for 2013 and 2014 respectively, resulting in property tax increases.

Most of the work on the budget is done by the city finance department and city manager, boiling down the components for the council. Next week, department heads start meeting with the city manager to discuss their needs for the next fiscal year.

The council receives draft budgets on July 8 and department presentations to the council are scheduled on July 16 and July 21.

On July 10, budget overview packets are to be delivered to city council members. A final council budget work session is slated for July 28 and a proposed budget and filed with the city secretary on Aug. 5.

Winding down, the council will discuss the property tax rate at an Aug. 11 session and hold tax rate and budget public hearings on Aug. 25, with a second public hearing Sept. 1 if necessary.

The budget and tax rate will be adopted Sept. 8, in time for property tax notices to go out in October. The city fiscal year runs from Oct. 1 through Sept. 30.

 

 

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