Georgetown homeowners could see an increase on their tax bills in 2017.

City Council is expected to grant its final approval for the fiscal year 2016-17 budget and property tax rate at its Sept. 13 meeting. The council approved the first reading of the proposed rate of $0.424 per $100 valuation at its Aug. 23 meeting.

Although the rate is lower than 2015 rate of $0.434 per $100 valuation, the proposed property tax rate is higher than the city’s effective tax rate of $0.393635, which is the rate needed to raise the same amount of tax revenue as the previous fiscal year.

With property values also increasing, the rate is an effective tax increase, Georgetown Finance Director Leigh Wallace said.

The average home value in Georgetown increased by more than $18,000 from 2015 to $253,320 in 2016, an 8 percent increase. Because of the rising values, the average tax bill is expected to increase by $56.28.

“There is a certain level of amenities that our taxpayers demand,” Mayor Dale Ross said during the council’s June 26 meeting referring to the property tax rate increases related to voter-approved bonds. “For a tax increase of on average $56 to have new and improved amenities coming on … that $56 is a great investment.”

The funds generated by property tax revenue will help fund the proposed nearly 5 percent increase to the general fund, which is planned to be $57.5 million and pays for the operations and maintenance of the city.

“I think a 5 percent [increase] is responsible, especially considering a good portion is for debt service, which the taxpayers have asked us to spend,” Council Member Steve Fought said. “I think it’s a really good budget proposal.”

Growing plans

City Manager David Morgan said the tax rate increase is related to the city’s growth.

“[Georgetown has] a growth rate of 7.8 percent, which is almost 13 people per day coming to Georgetown,” Morgan said.

In May the city was named the fastest-growing city in the nation among cities with populations larger than 50,000, according to data released by the U.S. Census Bureau.

“If you look at our [development pipeline], … we don’t anticipate the growth to slow down any time soon,” Morgan said, adding that about 15,000 residential lots are in the planning phase throughout the city. “That means we’ve got property where there is someone actively working on preparing property for development in the future. … Over the next numerous years we anticipate seeing a significant amount of growth based on the planning that is underway.”

By the end of FY 2015-16, Morgan said the city is expected to have 731 newly constructed single-family homes, 906 new multifamily units and 800 newly platted residential lots.

The city’s 2016 assessed property valuation increased by 11 percent compared with 2015 to about $6.5 billion, which includes about $193 million in new and annexed property values.

In 2017, he said he expects the number of single-family new construction and platted lots to continue to increase.

Planning projects, including the proposed fixed-route bus system, a retail study and the Williams Drive Corridor Study, are all ongoing initiatives, and other projects, including an update of the city’s 2030 Comprehensive Plan and an affordable housing tools study, are included in the $325.5 million proposed FY 2016-17 budget, Morgan said.

Budget highlights

Morgan said many of the budget additions can be attributed to direction provided by City Council during its strategic planning sessions in late 2015.

The general fund increase includes costs related to voter-approved transportation and parks projects, such as the construction of the Southwest Bypass and Garey Park, as well as 11 new full-time and two new part-time positions, a 2 percent merit pay increase and market-based pay increases, and $100,000 for a tuition reimbursement program for city employees.

Morgan said programs such as the reimbursement program and pay increases will help the city retain and attract high-quality employees.

“[The council has] also recognized that it’s important to recognize service succession and career development,” he said. “We need a vehicle that can help on both of those fronts, in terms of helping us prepare folks for the next steps in their careers.”

The general fund is a part of the city’s total budget, which also includes other specialty funds that are growing this fiscal year, such as the city’s paramedic and water services funds, Morgan said.

The paramedic fund includes three new paramedic/firefighter positions to help reduce overtime costs and staff the city’s fourth full-time ambulance.

Morgan said startup challenges for the city-operated emergency medical services, including delayed payments for services and increased call volumes, caused revenue to be about 20 percent less than anticipated for FY 2015-16 and resulted in a budget shortfall of $148,000.

Morgan said the FY 2016-17 revenue is expected to be higher, and the shortfall could be reduced over time.

Despite some of the challenges the city’s growth has created, Morgan said the city leadership’s goal is to manage the growth.

“One of the things I know we are all focused on is making sure we are assuring quality growth,” he said. “And making sure we are planning for the next phases of growth. We’re preparing to not only be reactive appropriately to the growth that’s happening now but proactive for the future.”