The city is budgeting about $131 million in general fund revenue for fiscal year 2020-21, said City Manager Dan Johnson, who briefed council on the proposed budget at an Aug. 10 meeting. This is down 4.3% from the current fiscal year, when revenue is estimated to land at roughly $136 million.
This loss is in part due to a dip in citywide property valuations, which staff is proposing not to offset through a property tax increase. Richardson’s estimated appraised value for 2020 is $16.2 billion, which is a 1.81% decrease from 2019.
Instead, the city is proposing to readopt its current rate of $0.62516 per $100 home valuation. By keeping the tax rate the same and applying it to a lower taxable value, the city will collect less property tax revenue in fiscal year 2020-21, Deputy City Manager Don Magner said.
“Rather than revenue going up this year, it actually went down significantly, and rather than going up in our tax rate, we made some very hard cuts, but we are maintaining essential services,” Council Member Steve Mitchell said.
It is possible the city could see a bump in property tax revenue once the tax roll is finalized by the appraisal districts. That action has been delayed due to a postponement of protest hearings. Dallas County’s certified roll is expected in late August, and Collin County’s is slated for mid-September.
A sales tax revenue reduction brought on by the coronavirus pandemic is also exacerbating the city’s loss in operating revenue. Staff projects sales tax receipts to land at $30.7 million for the upcoming fiscal year, which is an estimated annual decrease of $6.3 million, Johnson said.
The city will soften the blow to the budget by borrowing $3.3 million from its fund balance, according to the presentation. It is also proposing to cut general fund expenditures by $3.1 million.
Some of those reductions will include holding off on recommended infrastructure maintenance, implementing a hiring freeze on nonessential positions, suspending compensation increases for staff, and canceling community events.
These expenditures could be incrementally restored if financial trends and forecasts remain positive for a sustained period, Johnson said.
“We want to model the austerity and sacrifice that we know many of our citizens and businesses are facing in their actions,” he said.
Despite the “unique and profound” challenges associated with COVID-19, Johnson said, the city is committed to maintaining essential services that are dependable and useful for a “stressed community,” he said.
This means moving forward on planned improvements to neighborhoods and infrastructure, Johnson said. These projects include park upgrades, street and alley repairs, improvements to traffic software and equipment, and water and sewer projects, among other initiatives.
The city’s water and sewer fund and solid waste fund are expected to see revenue bumps in the upcoming fiscal year. Staff is proposing to keep water and residential solid waste rates unchanged, Johnson said.
Citizens can provide feedback on the proposed budget and tax rate at an Aug. 17 public hearing. Another opportunity for public comment will be available prior to budget adoption Aug. 24.
For more information on the proposed budget, visit this link.