|City’s tax rate expected to stay the
Sales tax, property values, water sales, interest rates combine to improve revenues
|Kerry Craig | News-Telegram Assistant Editor|
Aug. 9, 2006 -- The proposed budget for the city of Sulphur Springs includes good news for city residents.
A monthly increase of 9 percent in sales tax revenues for the past year and and an 8 percent overall increase in property values will enable the city to hold the tax rate at 44 cents per $100 property valuation.
"Because the appraised values are higher, it actually lowers the component that pays for debt a little bit," said city Finance Director Peter Karstens. "That gives us about $258,000 of extra tax money to put in the budget."
Adding to the city's revenues are the sales of water from two dry years in a row.
"Water sales are up substantially, $380,000 over budget," Karstens said. "All that does is to allow you a fund balance to work with."
Total expenditures contained in the new budget add up to $22.23 million, and revenues will total $26.84 million. Karstens attributed increased revenue to bond issues to fund that Capital Improvements Program.
"We made a decision this month, as part of a council meeting, to use bond revenue to increase the rebuilding of streets," he said. "Over the next five years, we are transferring $350,000 additional money from the general fund to the CIP and, at the same time, will do a $3.5 million bond issue."
The CIP funding for streets contained in the new budget, will total more than $1.6 million per year for the next five years, an increase of $635,000 per year on streets.
The budget also calls for a second five years of sewer work, funded in part by a $2.5 million bond issue.
"There a lot of sewer lines that need to be redone and the federal government and the state are always right behind us, making sure we do this kind of work," Karstens said.
Although the tax rate will remain unchanged, city residents should expect a 4 percent increase in water, sewer and sanitation rates.
With energy costs working their way through the economy, the city is using the consumer price index of 4 percent to compensate for the increase in costs.
"The water and sewer, the water and waste water treatment plants, that is where we are seeing the cost increases," Karstens said. "We are all hoping -- except the people that own the oil -- that things will turn around and start going back down, but every day we seem to get a little more bad news."
Interest rates that have increased from 1 percent to 5 percent over the past two years also mean a financial gain for the city.
"We have reserves, and those reserves are earning 5 percent interest," he said. "Our interest receipts have gone up and that is projected to continue."
The interest adds up to more than $55,000 more revenue in the general fund, and the enterprise fund is up $60,000.
"The reserves and interest rates work for you and provide revenue that otherwise would have to come from different sources like taxes or rate increases," He said. "That is good news."