Editor's note: While fiscal year 2018-19's budget marks the first tax rate Colleyville has set at the effective rate, in fiscal years 2011-12 and 2012-13 the city set a tax rate below the effective tax rate.

As tax bills arrive, cities across Tarrant County will likely collect more revenue from property taxes despite flat or lower tax rates—unless that city is Colleyville.

This year Colleyville lowered the city’s property tax rate for fiscal year 2018-19 to the effective tax rate of $0.3208 per $100 valuation.

“The effective tax rate is a complicated way of saying that our intention is to collect the same amount of revenue this year as we did in last year,” Assistant City Manager Adrienne Lothery said. “That is something that a lot of communities say can’t be done, and we’re doing it.”

Both Lothery and City Manager Jerry Ducay said this is the first tax rate set at the effective tax rate, as opposed to leaving the tax rate the same as the year before or lowering it slightly.

The Tarrant Appraisal District, which determines property values annually, reported the average taxable value for a Colleyville home increased from $500,748 to $521,831. At the previous fiscal year’s tax rate of $0.333834 per $100, this would have resulted in a city tax bill of $1,742.05 for Colleyville homeowners.

With the effective rate of $0.3208 per $100 valuation, however, the average city tax bill will be $1,674.03­—about the same as last year when the estimated net taxable value for Colleyville properties were 7.7 percent lower, and a $0.013034 decrease from last year’s tax rate.

A $1 million mission

Colleyville Mayor Richard Newton said the city had to find $1 million in savings to reach an effective tax rate.

This was accomplished in part by eliminating a $1.2 million transfer from the utility fund to the general fund. The transfer was absorbed by operational efficiencies and minimal staffing reductions in FY 2016-17.

Then in FY 2017-18, the city continued to absorb cost increases and also implemented a hiring “chill,” in which vacancy positions were filled with current employees.

“Where it made sense, we essentially eliminated some levels of middle management, and we have a lot more efficiencies in that regard,” Lothery said. “When we had vacancies come up organically we looked at those positions and said, ‘Is this ... an opportunity to organize things in a way that makes better sense for service delivery and also can be an efficiency opportunity?’”

Ducay said the city’s mission is financial responsibility—the effective tax rate is simply a result of that effort.

“What's important is providing an efficient, high-level service government for our residents, and so if we have a situation where we need to provide additional services, we look for ways to provide that in the best ways that we can,” Ducay said. “In the process of doing so we were able to save enough money to provide an effective tax rate.”

An effective strategy

Despite the cost of living being on the upturn, Lothery said the budget is conservative enough to take into account all expenditures and provides some contingencies.

“Colleyville is in such a blessed position in terms of overall financial health that should some really catastrophic event occur, we have some very robust reserves to be able to respond to those,” she said.

In addition the decreased tax rate will see normal city services not only continue, but expand. Lothery and Ducay said there will be renewed beautification efforts in the city this year, two part-time public safety officers will be added, the city will add more money for community events, and it will also renew partnership efforts with entities such as the Colleyville Chamber of Commerce and the school district.

For next fiscal year Ducay said city staff will continue to find opportunities to meet the city's needs while being conservative with revenue.

“Our goal was always to provide the most efficient opportunity when it came time for this discussion this year,” he said. “The effective tax rate was part of that, but the effective tax rate being approved now doesn't end that goal. We continue to find new ways to enhance our operations.”

Cities collect more revenue

Southlake has also adopted a decreased tax rate—its first decrease since FY 1996-97. The FY 2018-19 tax rate of $0.447 is a reduction of $0.015 from the previous year.

With property values increasing, however, the new tax rate is $0.005 more than the effective tax rate, although Mayor Laura Hill informed residents at a September City Council meeting that with the city’s 20 percent homestead exemption, the equivalent tax rate of $0.357 for the average valued Southlake home is lower than the effective tax rate.

Southlake Chief Financial Officer Sharen Jackson said that with the revenue from property taxes, the city will support safer schools, better mobility and an enhanced park system, including using cash to pay for capital improvement projects.

Grapevine, on the other hand, is faced with another year of maintaining city services. The city has adopted the same tax rate as last year­—$0.289271, generating $159,704, or 0.65 percent, more revenue than last year.

Chief Financial Officer Greg Jordan said while some revenue generators have opened and will benefit the city as they operate for their first full year, such as Perry’s Steakhouse and the Gaylord Texan expansion, there will be no major revenue sources until projects such as the train station, The Salt Lick BBQ restaurant and Paycom’s relocation come online.

“It’s truly a maintenance budget,” he said. “But [Grapevine] remains to be one of the most affordable places from the tax bill perspective.”

Additional revenue the city collects will be used in Grapevine’s general fund for overtime for fire personnel, a nondiscretionary economic development incentive, a state-mandated Dallas-Fort Worth International Airport Revenue Share, city employee and retiree insurance, and a transfer to the city’s Crime Control and Prevention District.

“These additional demands fully consumed any additional growth, and then we made some other structural changes to support these activities,” Jordan said.