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The city of San Marcos City Council meets today to take up consideration of approving an operating budget for the new fiscal year, an amendment of its Development Code and in the consent portion of the agenda, proposed amended consumer rate increases for citywide electric utility services, as well as water, wholesale water, reclaimed water and wastewater treatment utility services.
The council is also considering approval of a rate increase for resource recovery which affects residential and multifamily customers of solid waste programs in the city.
The meeting is at 6 p.m. in the council chambers at 630 E. Hopkins St. Following a second public hearing on the budget today, the council is scheduled to vote to adopt its FY2024 Budget and ratify the property tax revenue increase and set the tax rate.
The council will hold public hearings and hear staff presentations as it addresses Ordinance 2023-61: the adoption of an operating budget of $321,150,452 for Oct. 1-Sept. 30, 2024. In addition, the council is seeking public input prior to moving to consider approving the proposed FY 2023-2024 Capital Improvements Program Projects expected to cost $77,033,000, as stated in the published meeting agenda.
Additionally, the council is set to consider approval of Resolution 2023-152R which would ratify the property tax revenue increase in the proposed budget for the fiscal year Oct. 1-Sept. 30, 2024. This would keep the tax rate the same as in the previous fiscal year. Budget highlights as presented to the city included an increase in staff to support core services with 29 positions added including three sworn police and five fire department staff. There is $77 million for the capital Improvement program and approximately $2.8 million for a new city hall. Also in the budget are $188,000 for city signature events, including Summer in the Park, Sacred Springs Powwow, Sights and Sounds of Christmas and the Mermaid Promenade and Faire. The city has budgeted $60,000 for Veterans Day, Summer Fest Fireworks and the Arts Commission. Museum funding is increased to $125,000.
Council will hear a staff presentation, followed by a public hearing, in reference to proposed Ordinance 2023-62, which if approved, would set the tax rate for the fiscal year Oct. 1-Sept. 30, 2024 at 60.30 cents on each $100 of taxable value of real property that is not exempt from taxation, according to the agenda. If approved, this would authorize the city council to levy taxes for the use and support of the municipal government in the year ahead. As part of the budget proposal, approval would further empower the city to provide a sinking fund for retirement of the bonded city debt, including procedural provisions.
Staff presentations and public comments for and against the proposed rate increases were offered in the council’s meeting of Sept. 5, by the city’s director of finance, Jon Locke. These presentations were followed by public comment in response to these first readings of the proposed rates, and this meeting is available for viewing at sanmarcostx. gov/421-City-Council Videos-Archives. During this meeting, staff offered comparisons between the proposed future rates for electric, water and solid waste services to neighboring communities.
During that meeting, the city provided a comparison of how much rate increases will impact an average resident as well as rates for neighboring municipalities. For example, for a resident using 983 kwh of electricity each month, it is estimated the monthly rate will go from $93.01 to $94.72. Similarly, for someone using an average of 4,800 gallons of water monthly, the cost will go from $56.47 to $58.29 monthly. Wastewater charges based on a 4,788 gallon usage, will increase approximately $2.41 each month. It is expected that most single families will see an increase of approximately 86 cents each month and 85 cents for community enhancement costs. The city is looking for a combined increase for all of these services of 3.6 percent.
In anticipation of the budget adoption, the city released that its expected fund balance coming into FY 2024 is $97,211,295, with proposed revenues for FY 2024 of $315,185,315, and proposed expenses of $321,150,452. According to city documents, the budget as presented will raise more total property taxes than last year’s budget by $5,947,057 or 13.6%. The city stated that of that amount, $2,756,989 is revenue that will be raised from new property added to the tax roll this year. By comparison, in the FY 2022 adopted budget, the city stated that it expected to raise less revenue from property taxes than the previous year’s budget by an amount of $3,408,170, which represented a 9.8% decrease. At that time, the city stated it would need to raise property tax revenue by an additional $1,431,963. The adopted property tax rate for FY2022 was .6030 and for FY 2021, .5930.
In the city’s proposed budget, it stated that the property tax rate is made up of two components. The component for maintenance and operations is “related to general fund operations,” and the component for interest and sinking is related to funding the debt obligations of the city. The fiscal year 2024 proposed budget is supported by a tax rate of 60.30 cents per $100 of assessed valuation. The City’s tax rate has been 60.30 cents since FY 2022. In fiscal year 2024 citizen tax bills will reflect 60.30 cents per $100 of assessed property value. Based on this rate, an owner of a home valued at $100,000 will pay approximately $603 in city property taxes. Hays County appraisal district assesses the real property values used to calculate property tax bills.”
The General Fund budget is based on a maintenance and operation property tax rate of 44.47 cents per $100 of assessed value. This supports both police and fire protection, parks operation and maintenance, the city’s activity center, the public library, animal services, road maintenance and traffic control. The proposed budget includes $550,000 in social service program funding from the general fund.
The city’s debt service fund budget is based on what is called an I&S (interest and sinking) tax rate of 15.83 cents per $100 of assessed valuation. Debt service is the annual combined principal and interest amount needed to repay all of the city’s debt on time and interest and sinking is the tax rate levied by the city to pay for any bond debt that may have been issued.
City documents stated that for FY2024, the valuation of all property increased 18.8% or $1.5 billion from the prior year, with approximately 16% of growth occurring within Tax Increment Reinvestment Zones. It was in January 2022, that the council enacted a local homestead exemption of $15 thousand and an increase to the local senior/ disabled exemption of $10 thousand to $35 thousand. These exemptions “ultimately saved taxpayers over $1.1 million on over $182 million of property value,” according to city officials. The city’s projected property tax collections, assuming a 98% collection rate would be $57.1 million, of which $7.2 million supports TIRZ. Property tax revenue net of TIRZ is $49.8 million, of which $36.7 will be used for operations and $13.1 million for the retirement of tax-supported debt, officials stated.
The council will also take up consideration of the city approving an agreement to sell Edwards Aquifer water on a “temporary basis” to the city of Kyle. In this portion of the agenda, the city will discuss a single use container ban.
Council will hold a public hearing after a staff presentation prior to discussing possible adoption of the proposed “Vision SMTX Comprehensive Plan,” which includes a preferred scenario map of the city, or what is essentially the future land use map of the city–which replaces the old comprehensive plan, “Vision San Marcos: A River Runs Through Us.”
Next on the agenda, city staff members are scheduled to present information regarding the proposed Ordinance 2023-72, which amends the San Marcos Development Code.
Some of the items in the amendment proposal address changes made in the 2023 Texas Legislative Session, as well as the improvement of processes related to development agreements, certificates of appropriateness, demolition by neglect and parks and open space dedication. It would also incorporate council direction for code amendments including improved historic district and landmark designation criteria, and the increasing of the occupancy restriction limit from two to three unrelated persons. An approval by council would create a new business park zoning district and make waste related services a conditional use in all instances. Some residents with property in the city said they are particularly concerned about the demolition by neglect portions of the code and recent attempts by the city to use this against property owners.
The council is also expected to reappoint David Anthony Burns as associated municipal court judge for the San Marcos Municipal Court of Record.
Also on second reading, the council is set to approve amending city code to eliminate the five-day holding period exception for impounded stray cats having no traceable identification.
The Daily Record is also on the agenda for approval of an encroachment agreement with various citizens and San Marcos Publishing, LP. “to allow the existing San Marcos Daily Record Building to encroach with a city easement located at 1910 S. IH-35.”
The meeting is both in-person and online. To view the meeting got to sanmarcostx. gov/421-City-Council Videos-Archives or watch on Grande channel 16 or Spectrum channel 10.
