The council adopted an $8.5 million general fund budget for FY 2016-17 at its regular meeting Aug. 24.
“As mayor, I am extremely proud of the time and hard work that our City Council and our city staff put into the budget process this year,” Mayor Ritch Wheeler said. “We had a number of big topics on the table that will help shape the future of our city—topics that deal with infrastructure like roads and water— and even some large projects that will help stimulate major economic growth. Shenandoah is continuing to set itself up for the future.”
The budget passed with a vote of 4-1 with Council Member Ron Raymaker voting in opposition.
“We had a number [of]3-2 decisions where my position was outvoted,” Raymaker said. “Enough where I can’t put my stamp of approval on the overall budget. The taxpayers elected me to be their watchdog and facilitate change. My base didn’t elect me to just go along to get along.”
The budget has a surplus of approximately $150,000 and will not use any reserves. Additionally, no programs were created or cut in the budget.
Property and sales tax
The council voted to reduce the city’s property tax rate just below the effective tax rate, from 23.99 cents per $100 valuation in FY 2015-16 to 22.95 cents per $100 valuation, effective Oct. 1.
Although the tax rate has consistently been either unchanged or lowered by the council every year since 2004, the city’s property values have increased. Values have nearly doubled since 2009, reaching more than $840 million this year.
“I think it’s a good budget that will serve our residents and businesses well,” City Administrator Greg Smith said. “I think it shows again that the city has been very fiscally responsible in how they operate to be able to go below the effective tax rate. This will be the second time in my eight years with the city that we’ve gone below the effective tax rate, which is actually reducing the tax bill for the residents.”
The council opted to lower the property tax rate even with no increase in sales tax projected. Roughly 64 percent of Shenandoah’s proposed general fund revenue is reliant on sales tax, and city officials decided to keep this portion of the budget flat after considering the economic state.
“This city is very heavily dependent on sales tax,” Smith said. “With the slowdown in the oil and gas industry, which has caused a slowdown in some parts of the economy in this area, and looking at the historical data of sales tax, we opted to budget it flat again this year—not to budget an increase. While we feel that we will probably exceed the budgeted number, we wanted to be conservative on the revenue side.”
Smith said he is confident the city’s sales tax revenue will increase because Shenandoah is slated to open several new hotels and restaurants within the next few years.
In addition to flat sales tax revenue, Smith said new home construction has also taken a hit with the oil and gas downturn. However he said he is also hopeful it will pick up in the coming years.
Community resource officer
The Shenandoah Police Department will receive a $267,565 increase from last year’s budget to help fund a new community resource officer position, two replacement police Tahoes and one new police pickup truck.
The CRO position will be filled by at least one existing police officer and one additional police officer, who will serve on rotating 12-hour shifts from 10 a.m.-10 p.m. The CRO will be a fully commissioned police officer who will drive a pickup truck rather than a Tahoe to accommodate additional equipment for motorist assistance.
“The CRO’s primary responsibilities are going to be code enforcement, patrolling the residential areas, paying particular attention to our parks in addition to our commercial areas and helping businesses that may close late—if they need somebody to walk their employees out to their vehicles,” Smith said. “They’re not going to be running normal police calls unless it is an urgent call.”
Last year, Smith said administrators did a citywide staffing level analysis, and each department made a plan to gradually add new personnel as needed, based on the growing population. A public works position was added in FY 2015-16 while this year’s budget will add the new law enforcement position.
“With [Shenandoah’s] future growth will come additional service needs, but [this year]we were able to expand our police department as well as provide them with additional equipment and resources,” Wheeler said.
Smith said the police department will continue to add personnel in the future, as needed.
Shenandoah city employees will receive a one-time 3 percent salary increase at the beginning of FY 2016-17 as a means of staying competitive with similarly sized municipalities.
This raise will be given in addition to the existing pay scale, which enables employees to receive step raises each year if their performance is considered acceptable, Smith said.
“We did the salary survey and it’s time for us to relook at some positions in the city to make sure that we are staying in line with other municipalities in this area,” Smith said. “To offset possibly some [positions]that do need to have a pay grade change, 3 percent is a one-time payment to allow us to give the employees a raise in addition to the step raise for their hard work and dedication to the city.”
The FY 2016-17 budget goes into effect Oct. 1. The budget in its entirety can be found at www.shenandoahtx.us.