RICHWOOD — City Council is trimming budget expenditures in hopes of giving residents one of the lowest tax rates possible, though they haven’t decided exactly what that might be.

Interim Finance Director John Washburn recommends the council at least keep the tax rate at this fiscal year’s rate of 67 cents per $100 of property value, which is 6.23 percent more than the effective tax rate of 63.1 cents per $100 of property value. The effective tax rate is that which would generate the same amount of revenue as the previous year from properties on the tax rolls both years.

“Holding the tax rate where you currently are is to me, a very prudent matter going forward,” Washburn said.

Richwood must increase its interest and sinking tax rate from 6.06 cents per $100 of property value to 11.78 cents per $100 of property value because of the $5 million of voter-approved bonds that will improve streets, drainage and sidewalks, Washburn said.

That means if council adopted last year’s tax rate, the maintenance and operations side of the tax rate would bring in $10,834 less than this fiscal year, according to meeting documents. If council adopted the effective tax rate, it would bring in $129,009 less in maintenance and operations revenue, the document states.

City staff has lowered some projected spending in next year’s budget in several ways, including cutting the building official position and electing to contract that service, Interim City Manager Lindsay Koskiniemi said. When the city’s building official retired mid-year, they planned to hire one person to be the building official and animal control officer for an annual salary of $55,000 to $60,000, she said.

They will instead contract animal control from Angleton for $15,000 and use a third-party building inspector, whose fees will be passed on to permit applicants, Koskiniemi said.

However, council nixed two requests to increase expenditures, which would have spent up to $40,000 on a public works equipment storage building and up to $20,000 to remodel the P.K. Forrest Community Center.

The storage building would provide a place for the public works department’s vehicles, backhoe, mini excavator, dump truck, mowers, utility trailers and more, Public Works Director Clif Custer said. Most of these vehicles have to stay outside right now, but housing the equipment is an important part of maintaining it, Custer said.

This would be a three-sided building and prepare for growth in the future, he said. When council asked if he could come up with a cheaper option for now, Custer said he’d rather wait until they can budget to build the $40,000 building.

“I’m looking for a more permanent option,” he said.

The P.K. Forrest building is outdated and needs new doors, paint, countertops, cabinets, trim, ceiling materials, vanities and other upgrades, Custer said. About half of its renters come back unsatisfied with its amenities, he said.

The building is rented most Fridays and Saturdays, City Secretary Giani Cantu said, but people often check out the building and decide not to rent it.

If it is upgraded, the city could increase the rental price, Custer said.

Council agreed the building is still functional for rentals and the upgrades can be delayed for another budget year.

Another expenditure for next year is an additional $44,000 for pay raises, which would include increased cost for health insurance and other benefits, Koskiniemi said. Council agreed to the potential raises.

Councilwoman Katie Johnson asked if staff could come up with a tax rate lower than last year’s rate but higher than the effective rate. She had earlier expressed an interest in the effective tax rate and no increase in taxes.

Councilman Mark Brown II asked for a break-even tax rate to accommodate the approved budget requests.

Staff agreed to bring these options to their meeting Monday, which is when council will be required to set a maximum tax rate. They could officially adopt a lower tax rate after that, but not a higher one.

The budget must be formally adopted Sept. 16.

Maddy McCarty is a reporter for The Facts. Contact her at 979-237-0151.

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