To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Finance
Subject:
Title
PUBLIC HEARING: Consider a proposal to adopt a tax rate of $0.42750 per $100 of taxable valuation, and announce the vote on the tax rate will be held at 7:00 p.m. on September 19, 2017 at Keller Town Hall, 1100 Bear Creek Parkway, Keller, Texas; in accordance with Chapter 26.06 of the Texas Tax Code.
Action Requested:
This is a public hearing only. No action is being requested or required.
Background:
On August 15, 2017, the Mayor and City Council unanimously (7-0) approved Resolution No. 3912 to consider the adoption of a tax rate exceeding the lower of the effective tax rate or the rollback rate. The tax rate proposed by the Mayor and City Council was $0.42750.
The 2017-18 proposed budget was prepared with a proposed tax rate of $0.42750. The proposed rate is a decrease of $0.0025 from the current rate of $0.43000. This is the fourth tax rate decrease in a row, and the proposed rate is the lowest tax rate since at least FY 1994. However, the proposed rate exceeds the lower of the effective tax rate ($0.418194) or the rollback rate ($0.432694), so the Texas Tax Code requires the City Council to hold two public hearings.
The second public hearing is scheduled for 6 p.m. on Tuesday, Sept. 12, 2017, at Keller Town Hall, 1100 Bear Creek Parkway, Keller, Texas and is a special called City Council meeting. The vote to adopt the tax rate is scheduled for 7 p.m. on Tuesday, Sept. 19, 2017, at Keller Town Hall.
Budget Impact:
The proposed rate would create a levy of $23,132,822. With the levy, the General Fund fund balance would be at 136 days and minimum policy requires 70 days. The Debt Service Fund fund balance would be 56.4% of bond payments, and policy requires a minimum of 10%. If the effective rate were adopted, the total levy would be $22,682,565 and General Fund fund would be out of balance by $458,268 based upon proposed expenditures.
Financial Considerations:
Adopting the effective rate would result in approximately $450,257 less revenue from property taxes.
A comparison of average residential levy based on the 2017 average residential taxable value of $329,840 is provided below:
Current tax rate of $0.43000 = $1,418
Proposed budget tax rate of $0.42750 = $1,410
Effective tax rate of $0.418194 = $1,379
Citizen Input/Board Review:
Not applicable.
Legal Review:
Not applicable.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Public Hearing only, no action to be taken at this time.