LAKE JACKSON — For the first time in 11 years, Lake Jackson staff recommend raising the property tax rate for the 2019-2020 fiscal year budget, which would cover the voter-approved bond payments from 2016.
The 1.3-cent increase would bring the property tax rate from 33.52 cents per $100 of property value to 34.82 cents per $100 of property value. It is mainly to cover increased debt payments from the 2016 bond, as well as some maintenance and operating costs, City Manager Bill Yenne said at a budget workshop Saturday.
This rate increase is 6.4 percent higher than the effective tax rate of 32.738 cents per $100 of property value, according to city’s proposed budget. 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.
The proposed budget is based on the rollback tax rate of 35.84 cents per $100 of appraised property value, according to the budget. The rollback rate is the highest rate a taxing entity can assess before requiring voter approval.
Sales tax is still the biggest source of revenue for the city, followed by industrial district revenue, then property tax, according to the proposed budget. The increase would still leave Lake Jackson with one of the lowest tax rates in the state, Yenne said.
Sales tax revenue remained flat this year, Yenne said. That might be because of the purchasing of recovery materials after Hurricane Harvey last fiscal year and that need dropping off this year, he said, but he expects it to increase 2 percent next year.
The increased debt payments stem from the $9 million of debts issued last year for the third phase of downtown revitalization, he said. This will be covered by an increase of 0.936 cents per $100 of property value, according to the proposed budget.
Councilman Vinay Singhania said the rate increase might be looked at detrimentally, but hopes residents understand the rate was lowered in the past and would have to be brought back up again.
Of the $37 million budget, the general operating fund is proposed at $22.38 million, which is $702,707, or 3.2 percent, more than the previous year’s general fund, the budget proposal states. The majority of the increase, $540,800, would go toward pay raises and benefits for city employees.
There are no new positions added to this year’s budget, Yenne said. However, numerous department heads noted they are short-staffed.
That is impacting the public works department, where they have been without a superintendent since John Plaia left the city in April, Public Works Director Eric Wilson said. They do have some worthy candidates for the position and will be interviewing in the next few weeks, he said.
There are shortages in the sanitation department, so workers are sometimes pulled from streets and drainage, Wilson said. It also causes the employees to work overtime, which is at a cost to the city, he said.
A high rate of turnover in the positions and lack of applicants contribute to the problem, Wilson said.
Gallagher Benefits Services analyzed the city’s compensation and made recommendations the city will have to implement during the next three to five years to distribute the financial impact, Personnel Director Jose Sanchez said.
For the next budget, Sanchez recommends a 2 percent market pay raise for all positions and another 2 to 4 percent raise based on merit, meaning each employee could get a 4 to 6 percent pay raise, he said.
The study revealed some salaries were “way out of whack,” Sanchez said.
The city has worked to make their entry-level positions’ pay competitive, but directors and department heads pay is primarily where they are lacking, Yenne said. The study made major gaps present themselves, he said.
Singhania said he doesn’t want Lake Jackson to become a training ground for employees, so he’d like to stay competitive with other jobs in the area.
Though it’s hard to compete with salary jobs, the city offers good benefits and stability, Councilman Gerald Roznovsky said.
The city’s partnership with Brazoria County’s health care clinic to get employees timely appointments and avoid use of expensive urgent cares or emergency rooms has been largely successful, saving the city money on healthcare, Sanchez said.
City employees have not used standalone emergency rooms at all this year, Yenne said. At last year’s budget workshop, staff said overuse of stand-alone emergency rooms for basic health issues was “killing the plan.”
The $540,800 will also cover a 2.5 percent expected increase for health insurance and 5 percent expected increase for dental insurance, according to the budget.
Another staff change that would save the city some money is hiring two full-time custodians to maintain the Recreation Center, Civic Center and library at the cost of $87,450, Parks Director Jeremy Bubnick said.
Currently, the city pays contractors $94,000 to clean the buildings, but Bubnick said the service is “inconsistent at best and below standards.”
They might still need once a week contract cleaning for the library at a $70 to 80 per week cost, but Bubnick said the cost savings is just one benefit of the proposed switch. Other city staff has been supplementing the contract work to keep the rec center clean, Bubnick said.
“The biggest thing for us is I think we’re going to get better service,” he said.
The increase in the general fund will also cover a $25,000 stipend increase for the volunteer fire department, to total $75,000, and a $23,000 stipend increase for emergency medical services, to total $360,000, to cover payroll, staff said.
Lake Jackson EMS has had a 23 percent increase in call volume since 2016, Chief Chris Sermarini said.
Yenne noted a loss of local control as a “major issue” in this year’s budget.
The Legislature put a cap of 3.5 percent on raising local property taxes starting with the 2020-21 fiscal year, Yenne said in the manager’s message, which will hurt the city in the future since it has a low tax rate. Lawmakers also limited the city’s ability to annex, he said.
“The assault on local control reached its zenith with this year’s state legislature,” Yenne said in the letter.
The budget will be on every meeting agenda until it is officially considered for adoption Sept. 3, Yenne said.