Katy City Council held a budget workshop Friday morning. Features of the budget include a tax cut, funding for three new police officers and 16 new firefighters, a new excavator to assist with clearing drainage ditches and three new police cars.

City Administrator Byron Hebert presented the budget to the council in a briefing. The overall budget for fiscal year 2017-18 is $26.1 million, an increase of about $1.6 million from the FY 2016-17 budget. The city's fiscal year runs from Oct. 1-Sept. 30 each year.

Hebert explained that the increase in the budget was brought about because of economic growth in Katy. The addition of businesses, such as Amazon.com Inc., Buc-ee’s and O’Reilly Auto Parts, has increased the tax base to provide more revenue. Additional sources of new income include eight motels with four additional motels in various stages of construction.

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Growth has simultaneously allowed the city to reduce the property tax rate by 2 cents per $100 in property valuation for the fifth consecutive year, Hebert said.

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Expenses include a variety of items, from general administrative staffing and public safety to debt services. The city's debt-servicing obligation is currently at 5 percent of its budget, which Hebert said is "unheard of."

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The addition of Fire Station No. 2 is being funded by a 2015 bond and a Staffing for Adequate Fire and Emergency Response grant from the Federal Emergency Management Agency that was awarded to the Katy Fire Department earlier this month in the amount of $2.18 million. This will allow the department to hire the 16 emergency services staff needed to run the new station. Payments from the grant will be received as reimbursements after expenditures are made. Hebert said the city will pay the money from a separate account so the grant funding can be easily monitored, and the city can be responsive to any associated federal audits.

A variety of mobility projects are included in the budget, including improvements to the I-10 frontage road between FM 1465, Cane Island Parkway and Pederson Road, near the new Buc-ee’s location; improvements to Morton Road, such as improved drainage; and improvements to Hwy. 90 at Cane Island Parkway. These projects are expected to be paid for by Houston Metro funding provided by an interlocal contract, Hebert said.

“We’re very fortunate that we don’t have to depend on our general funds budget to do a lot of our mobility projects,” Hebert said.

Other services and improvements are paid for using the city’s enterprise fund for basic city services. The total enterprise fund budget is expected to be about $903,000.

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The proposed budget also includes a 2 percent cost of living raise for city employees.

Hebert listed several expenditures in his presentation that were intended to preserve the look and feel of downtown, including the Old Town Katy District renovation project, Downtown Plaza renovations, water line rehabilitation and drainage improvements to the city.

“While we continue to annex and grow our commercial sector, we are dedicated to preserving the historical ambience of Katy,” Hebert said.

The first formal hearing on the budget will be held during the regularly scheduled council meeting Aug. 28 at 6:30 p.m. with another to be scheduled before a final vote on the budget is held.