Ahead of the Oct. 1 start of the 2021 fiscal year, Buda City Council approved a property tax rate that is expected to generate $6.7 million in total revenue to the city.
At the Sept. 15 meeting, council held the second and final public hearing before adopting the recommended property tax rate of $0.3423 per $100 valuation, which is $0.0073 less than the 2020 rate.
Officials adopted a budget with anticipated total revenue of $36.7 million and $39.5 million in expected expenditures, excluding capital projects. Including capital projects, the final budget amounts to $54.2 million.
The difference between the city’s anticipated revenue and expenses are due to revenue received by the city during the 2020 fiscal year such as bond funds that will be used for projects that span multiple years.
Included in the budget are funds to hire five new full-time employees, the city’s five-year capital improvement plan, a water rate increase of 3%, a wastewater rate increase of 4% and a general fund of $16 million.
Also included in the budget are funds to be collected from a 5% franchise fee that is part of a 50-year franchise agreement made between the city and Pedernales Electric Cooperative Inc. The current agreement is scheduled to end Dec. 31.
According to Finance Director June Ellis, the city originally proposed the 5% fee to PEC during a meeting last week, but the organization proposed 4.5%, which would create a $116,000 deficit in the budget.
The budget was not amended to reflect the discrepancy as discussions with PEC are ongoing, Ellis said, and the staff has developed a contingency plan until an agreement is reached.
“We have put into place our contingency, which is to defer filling three of the city’s positions that are in the proposed budget,” Ellis said.
The three positions that will be deferred are the senior accountant, communications specialist and criminal investigation department sergeant. The positions were originally slated to be filled by Oct. 1, and hiring for those positions will be postponed until April 1.
The budget also set aside $14.6 million for capital improvement expenditures for projects including the FM 2001 pedestrian and bicycle sidewalk path, the Garison Park development and Whispering Hollow Street drainage improvements.