Pflugerville 'fiscally well-positioned' ahead of FY 2020-21 budget discussions, city officials say
Looking ahead toward fiscal year 2020-21, Finance Director Amy Good said the city is focusing its expenditures on maintaining existing services and personnel while also placing limitations on new programs and hirings. (John Cox/Community Impact Newspaper)
During the work session, Good said there has been minimal impact to property taxes for fiscal year 2019-20 due to COVID-19, with more than 98% of property taxes collected by the end of April. Looking ahead toward fiscal year 2020-21, Good said the city is focusing its expenditures on maintaining existing services and personnel while also placing limitations on new programs and hirings.
The city provided tentative, preliminary general fund revenue estimates for fiscal year 2020-21 based on three different rate scenarios. Per Senate Bill 2, in effect for fiscal year 2020-21, the legislation limited cities' ability to increase its property tax revenue by no more than 3.5%. This, as outlined by preliminary city estimates, would translate to an estimated revenue amount of $42.46 million for fiscal year 2020-21, if the 3.5% rate increase is applied.
While Senate Bill 2 will be effective in the upcoming fiscal year, Good added that certain state legislation suggests that, in event of a disaster, cities could increase its property tax revenue up to 8%. Good said the Texas Municipal League and other entities are looking into if the coronavirus pandemic would permit a greater tax increase. She added that TML is currently looking into the validity of a property tax increase greater than 3.5% following Gov. Greg Abbott's denouncement of a disaster-related increase.
TML provides services to Texas cities and officials, including advice related to legal matters and legislative representation both statewide and nationally.
The current fiscal year's general fund revenue is listed at $40.78 million. Should a greater property tax increase be permitted due to COVID-19, Good outlined two possible scenarios for a 6% and 8% increase.
Good said the 6% and 8% scenarios are not official considerations by city staff, but are just examples to highlight general revenue fund projections under different rates. Under preliminary, unofficial estimates, the 6% increase would translate to a $42.92 million general fund revenue, while the 8% rate would equal approximately $43.32 million.
From May 18-29, departments will continue to meet with City Manager Sereniah Breland to discuss each department's proposed budgets, changes and additions for fiscal year 2020-21. From June 1-19, Breland will work with Good and department personnel to help compile the proposed budget for council.
The proposed budget will be presented to Pflugerville City Council on June 23, which will include information related to a preliminary property tax rate. The deadline to submit the proposed budget to council, per city charter, is July 1.