The new property tax rate will be $0.72212 per $100 valuation, which is lower than the existing rate of $0.73212. For six straight years before FY 2019-20, the tax rate was $0.74212 per $100 valuation, according to previous reports.
If City Council members had a tax rate that would have resulted in no new revenue, the property tax rate would have been $0.711949. If the council members had wanted to approve a rate of $0.735008 or higher, the move would have needed voter approval under state law.
Compared to other Bay Area communities, Nassau Bay's tax rate combined with its trash, water and sewer rates is on the lower end; only Friendswood, Webster, Pasadena and La Porte have lower combined rates.
"Even at $0.72212, we still are in a very good position," City Manager Jason Reynolds told the council.
Nassau Bay's budget totals $14.51 million, which is a dip from the FY 2019-20 budget of $16.33 million and an increase from the FY 2018-19 budget of $13.97 million. Special revenue and capital projects are down, contributing to the lower budget, Reynolds said.
The city's tourism fund for 2019-20 is about $475,000 due to COVID-19. As such, the city budgeted conservatively, expecting only $454,000 in tourism revenue in 2020-21.
“Typically we do about $900,000 a year with hotel funds, if not more," Reynolds said of the decline. “This, while it doesn’t appear to be a big drop in the bucket for hotel funds, it is actually pretty significant.”
One of the biggest capital expenses for 2020-21 is a transfer of $500,000 from the city's reserves to pay for part of a new water transmission line from the Southeast Water Purification Plant near Ellington Airport in Houston to the Clear Lake area. Several communities, mostly League City, are chipping in for the water line that will help sustain and grow Bay Area communities.
“It is what is cleaning the water and transferring the water from Houston to Nassau Bay," Reynolds said.
Street paving makes up another $310,000 of the $1.53 million set aside for capital projects.
The City Council has made safety and infrastructure improvements priorities for Nassau Bay. As such, most of the budget funds police, fire, emergency medical services, and road and other infrastructure projects, Reynolds said.
“The dollars that are spent each year are really focused on those two priorities," he said. "The rest is a support element to make sure those things can happen, but they all work in unison as one big cog wheel.”