City Council Meeting


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  F.2.       
Meeting Date: 09/03/2019  
Contact: Tracy Cormier, Managing Director of Financial Services

COUNCIL ACTION
AGENDA ITEM:
Conduct a Public Hearing on the Proposed Budget for FY 2019-2020 pursuant to Article VII of the City of DeSoto Charter.
BACKGROUND:
The proposed Budget, CIP, and Business Plan were presented to Council at a workshop on July 20, 2019.  Discussions on the proposed items were held during the workshops held on July 25 & 26, 2019.
 
The proposed General Fund and Debt Service Fund budgets were also discussed at that time.  The tax rate necessary to pay the debt obligations and provide the level of operating services as proposed in the budget is 70.1554 cents per $100 valuation, which is a decrease from the rate of the last (5) five years.  This rate is composed of two (2) parts, one (1) of which is the debt service rate of 15.1394 cents per $100 valuation.  This rate is a reduction from the prior year’s rate.  The other rate of 55.016 cents per $100 valuation is for maintenance and operations expenditures.  Adopting this tax rate will enable the City to cover costs to additional personnel and associated benefit costs with such positions; supplies and equipment costs; contractual services and professional fees.
    
The summaries of the 2019-2020 Budget, CIP, and Business Plan were provided to the council and are available on the City’s Website at www.desototexas.gov., the DeSoto Library, Senior Center and at the Action Center of the DeSoto Jim Baugh Government Center. 
 
FINDINGS:
Current tax laws require the City to publish a notice in news publications and conduct two (2) public hearings if there is a rate being set, which is higher than the effective tax rate.  The effective rate for tax year 2019 is calculated to be $65.8739 cents per $100 valuation and the rollback rate is calculated to be $70.1554 per $100 valuation.  The FY 2019-20 budget will raise more total property tax revenue than last year’s budget by an amount of $2,567,648 or 8.32% and of that amount $610,361 is tax revenue to be raised from new property added to the tax roll this year. 
 
The budget and all supporting schedules are on file with the City Secretary and are open to public inspection.   
 
Annually, the City Council reviews the Capital Improvement Program and continues the planning process for projects identified on a 5-year horizon. Through this planning process, City Council established the FY 2020-2024 Capital Improvement Program.  Projects identified in the FY 2020 and beyond are currently unfunded, with a funding source to be established at a later date.
 
The 2019-2020 Business Plan is also submitted as part of the budget process.
 
FINANCIAL IMPACT:
The total tax rate required to fund this budget will be 70.1554 cents per $100 of valuation, with the Maintenance and Operating portion proposed at 55.016 cents per $100 valuation, and the Debt Service portion decreasing to 15.1394 cents per $100 valuation.
 
The Public Utility Fund Budget for FY 2019-20 has proposed a 4% increase in the water base and volume rates from the current base rate of $9.38 to $9.76 and the current volume rate of $3.26 to $3.39.  The Fund also has proposed a 6.0% increase in the sewer base rate from the current rate of $10.47 to $11.14 and a 7% increase in the sewer volume rate from the current rate of $10.41 to $11.14.  The increase is proposed to cover the costs of contract water and wastewater treatment services, maintain current service levels, and continue capital improvements. 
 
The Sanitation Fund Budget for FY2019-2020 has proposed a 15% increase in the sanitation rate from the current rate of $18.00 to $20.70.  The increase is proposed to maintain current service levels and cover the increased recycling costs incurred by the City. Sanitation rates have remained the same since FY2012, despite annual increases in operational costs. 
 
RECOMMENDATION:
The adoption of the Budget, Tax Rate, CIP, and Council Business Plan is set for Tuesday, September 17, 2019 at 7:00 pm in the Council Chambers. 

No Action is Required at this time.
 
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