Updated at 11:15 a.m., July 26.

Lakeway City Council will meet Aug. 6 to discuss general fund and debt service fund budgets, and decide on a proposed tax rate, according to a schedule presented by City Manager Steve Jones at Tuesday's meeting.

The city will hold two public hearings before adopting the finalized budget and tax rate Sept. 17. The first public hearing will be held Aug.20 and the second will take place Sept. 10.

Original story posted at 11:27 a.m., July 24.

The city of Lakeway is looking at an estimated increase in both general fund revenue and expenditure in the coming fiscal year compared with fiscal year 2018, according to a draft budget for the fiscal year 2019 presented to the Lakeway City Council Monday night at a council working session.

According to the presentation by City Manager Steve Jones, the proposed budget set the total general fund revenue goal for the next fiscal year at around $13.77 million, a one percent increase from the projected gain for fiscal year 2018.

Ad Valorem Tax, or property tax collected by the city, would remain the major contributor to the revenue in fiscal year 2019, generating around $5.62 million. Sales tax revenue is expected to be around $3.95 million, a three percent increase from 2018.

Total general fund expenditure scheduled for fiscal year 2019 is $13.72 million, with the budget for the Lakeway Police Department being the largest item, totaling $5.56 million.

As budgeted, the city should have a $45,907 surplus, Jones said. That would leave the ending fund balance for fiscal year 2019 at around $3.48 million, which represents 25 percent of the operating expenditures, he said.

“Our policy for fund balance is try to maintain between 25 and 30 percent,” he said.

Jones also explained to the council the proposed tax rate displayed on the budget. The budget suggested a 16.44-cent property tax rate, Jones said, which is an “effective tax rate.” If adopted, an effective tax rate would not increase the total amount of tax citizens have to pay, he said. Due to the rising property value, he said, the effective tax rate would naturally go down for the total amount of levy to remain the same.

A rollback tax rate, on the other hand, is the calculated maximum tax rate a government can set without voters’ approval. Jones said the rollback tax rate for fiscal year 2019 is 17.59 cents, but Lakeway hasn’t yet decided to go with the rollback tax rate.

Though not reflected on the budget sheet, the proposed tax rate would likely be between the effective and rollback tax rates, which is now set around 16.90 cents, Jones said. The proposed tax rate would increase the average amount taxpayers pay by $24 a year.

Council addressed several issues during the discussion, including the concern for funding newly established committees, commissions and boards.

A lot of the new committees wouldn’t be able to submit their budget for fiscal year 2019 in time, Mayor Sandy Cox said.

“I don’t want us to ask them to go do something and we don’t fund them,” Cox said.

Jones said the city has the potential to transfer money out and from the Capital Reserve Fund to help with the situation if funding is needed.