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Local News

August 15, 2013

Proposed city budget calls for same tax rate

GREENVILLE — The current property tax rate in the City of Greenville would remain unchanged, and actually represents a slight decrease in overall property taxes, under the budget proposed by City Manager Massoud Ebrahim.

Ebrahim, at the time still the Interim City Manager, presented his proposed fiscal year 2013/2014 budget to the City Council Tuesday night.

“We have a balanced budget,” Ebrahim said.

But it is a budget which is leaving several currently vacant positions unfilled and which is making up for a significant shortfall in property tax revenue.

“Rubbermaid is a big factor,” Ebrahim said of the loss of Newell-Rubbermaid plant. “I would say 75 percent of it is Rubbermaid.”

The budget also includes an increase in the amount to be spent on maintaining city streets, as well as a 3 percent pay increase for city employees.

A new city budget and tax rate must be adopted before the start of the next fiscal year on October 1. The current City of Greenville budget is funded through a property tax rate of 69.9 cents per $100 valuation, unchanged from the previous fiscal year.

Ebrahim is calling for the city to maintain the tax rate in the coming budget. The rate would be below the effective tax rate, which would raise the same amount of money as in the current fiscal year, of 74.1 cents.

“This is the first time in a long time that the effective tax rate is less than our proposed tax rate,” Ebrahim said, adding the rollback rate, the highest rate that can be set without having to call for an election, is close to 80 cents per $100 valuation.

Ebrahim said the budget is balanced despite a decrease of more than $354,000 in revenue due to a decrease in the city’s taxable assessed value.

The budget calls for a little more than $20.9 million in expenditures, and $20.7 million in revenues. Ebrahim is proposing to take the difference from the fund balance.

Finance Director Cliff Copeland said the approximately $200,000 additional expenses would go toward the debt service rate.

“Our operating expenses are being covered by our revenue,” Copeland said.

But even though the property tax rate is below the effective tax rate, some homeowners will be paying a little more in taxes next year. While the city saw its business property values decrease this year, Copeland said home values actually rose.

“The average homeowner will see an increase of about $6.92 in taxes,” Copeland said.

“We have eliminated or froze several city positions,” Ebrahim said. “We eliminated some contracts and that saved the city some money as well.”

While sales tax rebate revenue is up for the year to date, Ebrahim said the city will have to send more than $2,7 million back to the Texas Comptroller’s Office during the next 30 years as a result of a recent ruling by the Texas Supreme Court. The payments are expected to begin next month and will cost the City of Greenville more than $92,000 in revenue per year.

The budget calls for an increase in the amount spent on the annual maintenance program for local streets, from $900,000 this year to $1 million in the coming year.

In preparing the budget, Ebrahim said he cut almost $1.35 million in requests from department heads and has proposed leaving vacant all current open positions, pending evaluations of the positions.

Ebrahim has also proposed eliminating the $50,000 contract with Strategic Government Resources (SGR). Former Community Relations Manager and Public Information Officer Lori Philyaw left her position with the City of Greenville to join SGR in November 2012, but has continued to serve as a public relations consultant for the city.

Ebrahim is also calling for cutting the $60,000 contract with the Texas Department of Transportation for additional mowing and transferring and was transferring the $40,000 in costs for lot abatement mowing from the general fund to the solid waste fund.

The current schedule calls for the Council to vote to set the property tax rate during the August 27 regular session, and conducted the annual public hearing and tax rate on the budget during the September 10 meeting. As there is not a tax increase as part of the current budget, the Council is not required to conduct a second public hearing on the budget and tax rate, although Mayor Steve Reid said it might be prudent for the Council to conduct a special meeting on the budget on September 17.

The Council is scheduled to vote to adopt the budget and tax rate on September 24.

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