Tomball 2012–13 capital projects include new parking lots, sidewalks
Economic growth in the Tomball area has brought more revenue into the city leading into the 2012–13 fiscal year. Both sales and property tax revenue are up, despite no tax rate increases, City Manager George Shackelford said.
Sales tax revenue for the 2012–13 fiscal year is projected to come in at $8.1 million, approximately $1 million more than expected. Total sales tax revenue year-to-date is up 17 percent compared to 2011, when a total of $6.9 million was collected.
Meanwhile, preliminary assessments from the Harris County Appraisal District indicate the City of Tomball's property values are projected to increase by 18.56 percent going into the 2012–13 fiscal year. As a result, property taxes are anticipated to bring in approximately $4.5 million in tax revenues this year, compared to $3.8 million last year.
"Part of it is because we're seeing more developers choosing to move here," Tomball Mayor Gretchen Fagan said. "The area has grown over the last 10 years and market research shows that it will continue to grow in the future."
The budget was ratified and adopted at an Aug. 20 city council meeting. In addition to property tax rates, the sewer, gas, garbage and water rates will also remain the same.
The total proposed budget for fiscal year 2012–13 is $31.8 million. The 2012–13 budget marks the second year the city will use its capital improvement fund to simplify the budgeting process and the second year of making a conscious effort to improve marketing and tourism.
Sales and property tax up
This year's increase in Tomball's assessed property value allows the city to pull in more revenue while keeping the property tax rate the same, according to Glenn Windsor, Tomball's director of finance.
One transaction that played a major role in the city's increased taxable value was the sale of the Tomball Regional Medical Center from the nonprofit Tomball Hospital Authority to the private sector corporation Community Health Systems, making it a taxable entity.
"That alone is going to give us at least an additional $100 million in taxable value," Windsor said.
The arrival of several large chain stores—most notably Kohl's in August 2011—also played a role. Shackelford anticipates recently opened stores, such as Ross Dress for Less, to have a similar positive effect this fiscal year.
The benefit of Kohl's on the city's finances is twofold, Shackelford said. Not only does the city's taxable value go up, but these stores also contributed to the rise in the city's sales tax revenue from $6.9 million to $8.1 million. The additional sales tax revenue goes directly into the general fund, he said.
"That's a big deal because most of our tax revenue is sales tax," Shackelford said. "Our property tax rate is so low here that we don't take in that much revenue from it."
However, Windsor noted, sales tax revenue can be hard to predict, and projections for the 2012–13 fiscal year remain conservative at $7.7 million.
"You don't want to give yourself a really high number and have it come in low," he said.
Capital improvements
The capital projects fund was set up in 2011 as a separate fund specifically for capital improvement projects including the Brown Road Extension and M121 Drainage Channel. Its purpose is to simplify the budgeting process by creating a fund that can transfer over from year to year.
Going into the 2013 fiscal year, $14.6 million still remains in the fund from the previous year. That money will go toward continuing work on the M121 drainage channel and the Medical Complex Drive extension.
One new capital improvement project for 2012–13 involves putting in sidewalks around TRMC along Graham and Lawrence streets at a cost of $378,000. The money was transferred from the city's red light camera program.
By law, money from the red light camera program has to be used on mobility or traffic safety initiatives, Shackelford said.
"This will tie in grocery stores like the H-E-B, with apartment complexes, clinics, nursing homes and doctors' offices," he said. "There are always people in that area walking or riding their scooters in the street. This is something that needs to be done."
The second new project for this fiscal year involves the creation of two parking lots around the downtown area in an effort to decrease on-street parking on FM 2920. The parking lots are expected to be completed by the end of 2012, according to Lori Lakatos, city engineer.
Tourism focus
The city is now entering its second year with an increased focus on tourism and marketing. Since hiring marketing director Mike Baxter in 2011, Shackelford said the city has been smarter about how it spends its tourism dollars.
"We're not necessarily spending more on tourism, but we are spending our money in more effective ways," he said. "We're spending more on events now, and I think you could argue that has contributed to our sales tax revenue as well."
In the 2012–13 budget, $104,000 has been set aside for events, up from $91,000 in 2012. That money, which comes from hotel occupancy tax funds, will be used primarily to develop the events the city created over the past year, Baxter said.
"There's a little additional money which we'll be able to use to add some extra elements to the events or increase the advertising," he said. "Hopefully, if we can raise the amount of hotel tax revenue we bring in this year, we add some new events for next year."
