OYSTER CREEK — The city will increase its water fees for the first time in more than a decade, according to a conversation at a City Council budget workshop.
Mayor Justin Mills introduced next year’s budget with an increase of 68 cents per 1000 gallons for residential water bills and $1.68 increase per 1,000 gallons for commercial water bills, though council members did not agree with his idea to offset that cost with a lowered tax rate.
The city has operated at a deficit for years, Finance Director Lanita Chitwood said.
If the city lowers the tax rate now, it could become extremely difficult to get caught up in the future, Councilman Harold Vandergrifft said.
“I don’t want to raise taxes, I promise,” Vandergrifft said.
He would like to see the city get to a point where it can sustain its budget without money from Freeport LNG, he said.
Mills felt it would be understandable to increase the water bills because it is a service for residents, Mills said.
The water bills will increase 18 cents from Brazosport Water Authority, meaning the city’s increase is 50 cents for residents and $1.50 for commercial properties, Chitwood said.
The minimum bill, which most senior citizens do not typically go over, is based on a 2,000-gallon usage, she said. That bill will increase from $28.13 to $30.57, she said.
The commercial minimum bills are based on a 5,000-gallon usage and will increase from $46.86 to $63.98, Chitwood said. The minimum bills include sewer and other services, she said.
It would take a $5 increase in water bills to balance the utility fund, she said at Wednesday’s meeting.
City Administrator Toby Guenter said they can’t bring up the water bills as much as they would need to right now, but city staff would prefer they get more revenue in both tax dollars and utility bills.
The current tax rate in Oyster Creek is 25.9 cents per $100 of property value and the mayor proposed keeping last year’s tax rate for an 11.72 percent decrease in revenue from households that are on the tax rolls for both years, Chitwood said.
The effective tax rate, or the rate which would generate the same amount of revenue as the previous year from properties on the tax rolls both years, comes with no tax increase for most residents at 29.33 cents per $100 of property value, she said.
That is because reappraised property decreased in value this year, County Tax Assessor and Collector Ro’Vin Garrett said. Overall property values increased from $164,760,504 to $176,361,738, according to the appraisal district, but $31 million of Oyster Creek’s value came from new construction, Garrett said.
This means to generate the same revenue from properties on the tax rolls both years, the effective rate would have to be higher than the current rate, she said.
Mills said he wants to decrease the tax rate but is OK with another rate as long as it does not increase taxes.
Council came to a consensus of not increasing taxes, but it will have another meeting Thursday. The police chief will attend Thursday’s meeting and they will discuss employee pay raises for next year’s budget, Mills said.
The meeting will be at 6 p.m. at Oyster Creek City Hall, 3210 FM 523.