June 25, 2019
By: Dwayne Page
Smithville property taxpayers will have to dig a little deeper in their pockets starting this fall.
By a vote of 3 to 2, the aldermen Tuesday gave final approval for a property tax increase of 25 cents per $100 of assessed value while adopting the 2019-20 fiscal year budget during a special called meeting at city hall.
The new rate, to be applied to tax bills this fall, will be 89.9 cents per $100 of assessed value, up from 64.9 cents.
A public hearing was held 30 minutes prior to the meeting but no one spoke out either in support or opposition to the tax increase or budget. However after the meeting one resident, former Alderman W.J. (Dub) White approached the aldermen who voted against it to thank them.
The vote was identical to the one taken during first reading passage on Monday, June 10 and there were no changes in the proposed budget between the first and second readings.
As before Aldermen Danny Washer, Shawn Jacobs, and Gayla Hendrix voted in favor while Aldermen Brandon Cox and Donnie Crook voted no.
The new tax rate is expected to generate $350,000 in new money for the general fund but even so projections are that the city will finish in the black by only $66,162 as of June 30, 2020 if all funds budgeted are spent The city is projected to end the current fiscal year 2018-19 in the red by $279,048 come June 30, 2019.
The water and sewer fund is not faring much better. Although water and sewer rates were last increased in 2017 the revenue is not keeping pace with expenditures which may force city leaders to take another look at rates again next year (2020-21).
By June 30, 2020 the city’s water and sewer fund is expected to be in the red by $237,542. Projections are that the city will be in the hole by $205,147 in the water and sewer fund as of June 30, 2019.
Under state law, if a utility continues to operate at a loss for more than two years and doesn’t address it, the state has the authority to force rate increases to make it solvent.
City water customers currently pay $7.25 per thousand gallons of usage. Rates for customers outside the city limits are $10.88 per thousand. City sewer customers pay $6.75 per thousand gallons. Those rates will remain the same over the next year.
Water tap fee increases have been included in the new budget for customers both inside and outside the city.
Although the municipality has water/sewer and general fund surpluses totaling several millions of dollars, city leaders say the government can’t continually dip into those surpluses to operate.
The largest project on the table in the general fund is a new police department building. The proposed 7,805 square foot structure would be built on property donated to the city on the north side of the city hall/fire department complex at Don Cantrell Street.
The cost of the new facility could be as much as two million dollars to be funded either on a long term note or bond issue. From the start date of construction, projections are the building could be completed possibly within one year.
The mayor and aldermen recently met with Wayne Oakley of Studio Oakley Architects, LLC who submitted a bid to design the new police department building for the city at $105,000 and that cost has been included in the new budget as engineering fees.
A 2% pay raise has been figured into the budget for city employees who have topped out on the wage scale and funds for employee disability insurance coverage to help protect city employees from loss of income in the event they are unable to work for a period of time due to illness, injury, or accident while off the job. Capital outlay expenditures total $622,100 much of which includes grants for airport easements and clearing and a grant match for sidewalk improvements. Plans are to purchase two used police cars and a 16 foot flat bed trailer for the fire department.
Capital outlay expenses for the water and sewer include the purchase of a Kubota trackhoe, trailer, diesel truck, 9 foot dump body, camera system for leak detection, and engineering fees and sewer rehab project construction costs. The city has applied for a $500,000 Community Development Block Grant to help fund the sewer rehab project.