CHRIS DUQUE — Proposed Nederland budget detailed for community spotlight, information
The City of Nederland regularly receives comments or questions regarding city finances/budget, utility rates, and city taxes. Last month, we discussed the budgeting process and the City’s enterprise functions — Water & Sewer and Solid Waste.
At the Sept. 14 meeting, the Nederland City Council will formally vote on the Fiscal Year 2020-21 Budget and the tax rate.
The FY 2020-21 Budget was presented to the City Council on Aug. 10. On Aug. 24, a public hearing was held in regard to the budget with no received comments.
The proposed City budget is $25,533,732, which is allocated throughout various funds (General, Police-Narcotics, Hotel/Motel, Equipment Replacement, Streets Improvement, Water and Sewer, Solid Waste, Central Dispatch, etc.).
The General Fund budget, which includes city administration, finance, personnel, police, fire, inspections, streets, parks and the library, is balanced with revenue and expenditures totaling $11,945,200, which is an increase of $548,142 or 4.81 percent from the adopted FY 2019-20 budget.
Taxes represent the largest revenue source — property taxes, delinquent taxes, tax penalty and interest, industrial in-lieu-of-taxes, sales tax, franchise fees, and occupational taxes & licenses.
Additional revenue sources are NISD contribution for school resource officers, inspection fees, pool fees, court fines, library fees, animal control fees, court building security fees, interest income, miscellaneous revenue, transfers-in from the Water & Sewer Fund, Solid Waste Fund and Police Narcotics Fund.
Over half of the expenditure increase is tied to salary and benefit cost increases.
The City shall provide all full-time employees a 2 percent cost-of-living-adjustment, steps on the pay plan for eligible employees, steps for police officers and firefighters in accordance with their respective collective bargaining agreements, increased costs for the employees’ pension plan and creation of a new full-time Streets Department Maintenance Worker position, which is the first new position for this department since 2004.
In addition, the City shall increase the monthly allocation to support the Senior Citizen Center, allocate $50,000 for the second round of new neighborhood streetlight funding, allocate over $1 million for street improvements, continue to fund the Spay/Neuter program and increase the allocation for Equipment Replacement.
Under Equipment Replacement, the City shall purchase two new police patrol units (SUVs), an excavator for the Streets Department, three pickup trucks for wastewater treatment plant, Water/Sewer distribution, and solid waste, and a trash truck.
Funding from the budget will result in the completion of the Hodgson Road Lift Station Rehabilitation project, the Hodgson Road/Bourque Road Rehabilitation project, the Public Safety Complex Parking Lot Improvement project and re-painting the Avenue G elevated water tower and paint repairs to the Canal Avenue elevated water tower.
In addition, the local contribution for the Hazard Mitigation grant program is allocated; this will result in generators being installed at four lift stations, completing the lift station generator project. Funds are also allocated for improvements to the Wastewater Treatment Plant and the wastewater system.
To support the NISD bond projects, the City has allocated funds to relocate a waterline serving Highland Park Elementary and shall work to install and/or repair sidewalks near Highland Park Elementary, Hillcrest Elementary and Langham Elementary.
Nederland has the lowest municipal tax rate in Jefferson County. The current tax rate is $0.599159 per $100 assessed valuation.
The proposed budget was based upon utilization of the voter approval tax rate of $0.579708 per $100 assessed valuation.
Last year, the State Legislature approved Senate Bill 2 that made significant changes to property taxes. Previously, the City discussed adopting a tax rate between the “effective tax rate” (the benchmark tax rate needed to raise the same amount of maintenance and operations property taxes on existing property as the previous year after taking into account changes in appraised values) and the “rollback tax rate” (the tax rate necessary to raise precisely 8 percent more maintenance and operations tax revenue as the year before after taking into account appraisal fluctuations).
Following SB2, the term “effective tax rate” has been changed to “no-new-revenue tax rate” and “rollback tax rate” has been changed to “voter-approval tax rate.”
The “voter-approval tax rate” is calculated utilizing 3.5 percent instead of 8 percent.
The Jefferson County Tax Office provided the following tax rates for consideration by the City: The effective tax rate or no-new-revenue tax rate has been calculated as $0.575233 ($0.023926 or 3.99 percent less than the current), and the rollback tax rate or voter-approval tax rate has been calculated as $0.579708 ($0.019451 or 3.25 percent less than the current).
At the Aug. 10 meeting, the City voted to propose the voter-approval tax rate of $0.579708, which is less than the current tax rate and $0.003847 or 0.67 percent greater than the no-new revenue tax rate.
This proposed tax rate will ensure the City of Nederland continues to have the lowest municipal tax rate in Jefferson County. A public hearing regarding the tax rate was held Aug. 24 with no received comments.
The City budget and the proposed tax rate will be voted on for approval at the Sept. 14 City Council meeting.
If there are any questions regarding City operations, please contact the City Manager’s Office at 409-723-1503.
Chris Duque is city manager for Nederland. He can be reached at CDuque@ci.nederland.tx.us.
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