June 10, 2019
By: Dwayne Page
Smithville Aldermen have taken the first step to raise city property taxes.
By a vote of 3-2, the aldermen Monday night voted in special session to increase the city property tax rate by 25 cents per $100 of assessed value and to adopt the new $6.8 million budget for the 2019-20 fiscal year on 1st reading.
Aldermen Danny Washer, Shawn Jacobs, and Gayla Hendrix voted in favor. Aldermen Brandon Cox and Donnie Crook voted against it.
Second and final reading is scheduled at another special meeting on Tuesday, June 25 at 5:30 p.m. at city hall following a public hearing. Aldermen will be permitted to make changes to the proposed budget if they desire before final passage.
The 25 cent tax rate increase from the current rate of 64.9 cents to the new rate of 89.9 cents per $100 of assessed value 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.
Although three aldermen, Danny Washer, Brandon Cox, and Donnie Crook have signaled opposition to it this year in a previous workshop, Alderman Gayla Hendrix said she may ask at the next meeting that another paid firefighter position be added to the budget which would increase spending by $45,000 and decrease the projected year end surplus from $66,000 to $21,000. Creation of the new position in the new budget would require at least three votes in the affirmative.
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.