UPDATE 9-27-2019: On Wednesday, October 2, 2019, the City Council approved an increase the total tax levy for the 2019 tax year (fiscal year 2020) by 3.28% by proposing a tax rate of $0.4473 per $100 valuation. Less then the original 8% and the second reduction to 7.1% but most property taxes will still increase.
UPDATE 9-30-2019: After cutting some expenses and moving amounts from one account to another, the City Council essentially adopted the budget submitted in July. Less than $200K in spending cuts in a $46 million dollar budget.
We learned from the third budget session, held on August 26, 2019, that our appraised property values have appreciated and Bellaire’s property tax revenue for 2019 may increase by about $1.3 million. The City Manager announced that this allows a decrease to a 7.1% tax rate for 2019. It seems that no matter how much revenue this city takes in, it all gets spent – and then some.
Neither Neil Verma nor Gus Pappas had any concrete suggestions to cut costs, Michael Fife admitted that she was not clear on the ‘budget things’. Trisha Pollard was absent for the meeting.
David Montague suggested a 3.5% tax rate for 2020, and had a list of suggested cuts that would reduce expenditures by $600,000. He also mentioned the hundreds of thousands of dollars the City pays in incentive pay and a consistent number of vacant staff openings.
Pat McLaughlan’s focus included City vehicles, which is a legitimate concern since the Vehicle Fund expenditures FY2020 total $1.68 million, with many of the costs for leases. We now lease vehicles instead of buying them. He also suggested that it might be time for a new group of engineers who may be happy to reduce their fees.
The City budget revenues include more than property taxes. Revenue sources also include water, wastewater, and solid waste fees billed through the Enterprise Fund, sales tax revenue, franchise fees, permits and licenses, fines , the Metro fund, the Special Revenue fund, investment income and bond funds. See the Consolidated Financial Statement below.
When Pat McLaughlan returned to a suggestion from an earlier meeting to scrub the budget line by line for every item above $100,000 the City Manager was incredibly rude to him, with the Mayor not far behind. In some cities the City Manager would be on his way out the door, but not with this Mayor and City Council.
The Mayor and Mr. Hofmann then agreed that another position, in Facilities or perhaps Public Works, was a good idea. So much for any thought of decreasing the number of City staff.
Optimistic was the operative word of the night. Let’s not try to seriously cut costs or staff, let’s not plan to save for capital improvements or even a rainy day. Let’s add to staff and continue to discuss another bond issue. Another pot of money for the city manager to generously disburse, and residents to pay back – with interest.
We’ll see how far the suggestions from Mr. Montague and Mr. McLaughlan make it. Bottom line for me from the third Budget Session – Tax and Spend.
- The City Budget is scheduled to be adopted on September 9, 2019
- A Budget Hearing and City Council meeting is scheduled for September 16, 2019 (the September 23rd meeting is not on the City calendar)
- A second Budget Hearing is scheduled for October 2, 2019
- The Budget must be adopted by October 7, 2019
Our bonded debt will increase to $126.6 million by the end of FY2020. We will owe close to $10 million in debt service, almost half of the anticipated property tax revenue of $21.8 million.
Based on the actual figures from the Harris County Tax Office our property tax revenues increased from $15.4 million in 2015 to $21.9 million in 2019. Over $6 million dollars in 5 years. That’s a 42% increase! Not including any increases in other revenue streams. Where has the money gone? Not to streets, drainage, water or sewer lines – that’s bond money.
Bellaire’s Debt is $123.8 million at the end of FY2019
Not including the interest. The estimate FY2020 is over $126 million.
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