As the calendar year 2021 hits its final home stretch, local municipalities have planned and prepared their budgets for fiscal year 2021-22, which started Oct. 1.

Among the changes in the latest budgets, the cities of Grapevine, Colleyville and Southlake will kickstart previously halted capital improvement projects and resume employee pay raises not offered in 2021. As the real estate market begins to level off from its summer surge, each city lowered its ad valorem tax rate to provide relief to residents while also taking in more revenue.

“We're continuing to grow the tax base because of growth, new business, there's gentrification, where you rebuild old buildings, or you enhance the value through new construction or rehab,” said Grapevine’s Chief Financial Officer Greg Jordan.

So what do these changes mean for residents?

Understanding the tax bill

Although a city may lower its tax rate, residents might still see their tax bills increase because of increased demand in the housing market, which can lead to higher property values.

A Tarrant County resident’s tax bill is calculated using their home value—set by the appraisal district—and the individual tax rates set for the applicable city and school district, and the county. Taxes are also paid into the JPS Health Network—Tarrant County’s taxpayer-funded hospital district—and Tarrant County Community College.

Grapevine’s newly adopted tax rate of $0.27 per $100 valuation for FY 2021-22 is a 4% decrease from the previous year’s tax rate. That makes their rate the second-lowest in Texas for a city with a population over 50,000.

Colleyville City Council lowered its ad valorem tax rate by 4.1% to $0.29 per $100 valuation. Southlake’s tax rate was also reduced by 3.7% to $0.39 per $100 valuation for FY 2021-22.

Staff compensation

Another trend seen locally is cities offering their staff raises to help with employee retention as the job market becomes more competitive for employment in the public sector.

Grapevine designed its FY 2021-22 budget to offer pay raises for city employees.

“When COVID[-19] hit, it completely forced us to rethink the way that we approached the FY [2021-22] budget,” Jordan said. “But fortunately, when we got into the spring months ... we started to see a very rapid recovery in the sales tax revenue.”

The pandemic reduced Grapevine sales tax revenue by 17% for FY 2020-21. Budget cuts meant no pay increases for staff, Jordan said. However, a mid-year market compensation adjustment of 2% was given to all staff in July.

“This [fiscal year 2021-22] budget had compensation built-in for police and fire, and general employees,” Jordan said. “So part of it was to provide compensation, to keep us at sort of the market median.”

Southlake is moving forward with a 2.5% cost of living adjustment for all employees. A merit-based raise of up to 2% is also in the budget.

Southlake Chief Financial Officer Sharen Jackson said the city will include a pay increase for police and fire department staff, moving the public safety pay plan from the 60th percentile to the 80th percentile, above the average for benchmark cities to help with overall retention.

Colleyville maintained employee compensation from its FY 2020-21 budget.

“We still did our compensation market adjustments last year,” Colleyville Assistant City Manager Mark Wood said. “We’re going to continue that this year, which definitely includes police and fire.”

Capital improvement projects

This year’s budgets have cities looking to restore spending on maintaining and repairing already existing public services.

Grapevine’s FY 2021-22 budget is expected to reinvigorate the flow of money to the city’s capital improvement projects that include maintenance work on facilities and streets in Grapevine. Last year, nearly $7 million in cash transfers to projects were cut out from the budget, Jordan said.••“We’ve got $1.647 million programmed for capital improvements,” he said.

In Colleyville, the FY 2021-22 budget is designed to move capital improvement projects forward while maintaining a small-town feel. Wood said the city is allocating $29.28 million in cash to address streets, water, wastewater, parks and more.

“We’ve allocated about half a million dollars for trail connections. So the budget is robust and includes a lot of items,” he said. “We’re doing some improvements to our facilities, so the senior center will receive total renovation.”

Despite having a 2% reduction in all operating expenses, Southlake’s budget has set aside $32.7 million for capital improvement projects. This includes a new municipal service center estimated at just under $15 million in the fiscal year 2021-22 budget to be completed over the next two years.

Jackson said the city plans to have those projects “[take off]” in the upcoming fiscal year.