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  2.       
City Council Budget and Tax Rate Workshop 2023
Meeting Date: 08/04/2023  

BACKGROUND
On July 25, 2023 the City received the certified property tax rolls from the Guadalupe, Comal, and Bexar appraisal districts. The Guadalupe Tax Assessor-Collector used this information, and information provided by the City of Schertz, to calculate the No-new-revenue and Voter-approval tax rates for the 2023 Tax Year.

The No-new-revenue rate is a calculated rate that would provide the city with same amount of revenues it received the year before on properties taxed in both years. The Voter-approval Rate is a calculated maximum rate allowed by law without voter approval. If Council adopts a rate higher than the Voter Approval Rate, the tax rate will automatically be on the November 2023 ballot.

The 2023 No-new-revenue Rate is $0.4554 per $100 of valuation and the 2023 Voter-approval Base Rate is $0.4872 per $100 of valuation. There is no unused increment rate this year. Staff is recommending a preliminary maximum property tax rate of $0.4872 per $100.

In accordance with Chapter 26.05(d) of the State’s Property Tax Code, a governing body must hold a public hearing on the tax rate if the proposed tax rate exceeds the lower of the No-new-revenue or Voter-approval Tax Rate.  In this case, the hearing is required as the proposed rate does exceed the No-new-revenue rate. Staff recommends holding public hearings on August 15th and September 5th and encourages citizen participation and input in the adoption process.

A one-quarter page “Notice of Public Hearing on Tax Increase” must be published in the local newspaper and online in compliance with the Tax Code 26.06.  The notice will contain information based upon a preliminary tax rate to be determined by the City Council and the dates of the public hearings. 

During the final tax rate adoption process Council can approve a lower rate at that time, however they will not be able to approve a higher rate without republishing the notices and holding additional public hearings.
GOAL
To set a preliminary tax rate and start the adoption process.
COMMUNITY BENEFIT
Setting a tax rate will provide for existing and expanded services for residents.
SUMMARY OF RECOMMENDED ACTION
Per the Texas Tax Code Chapter 26, City Council will need to accept the calculated tax rates and set a preliminary maximum tax rates to use in the public notices. Council will do this by resolution.
FISCAL IMPACT
The proposed maximum rate maintains quality service to residents and businesses and provides growth in service offerings based on the classification and compensation study, staffing study and City priorities. The current property tax rate is $0.4950 per $100 valuation. The proposed maximum tax rate is $0.4872 per $100 valuation.

The M&O portion of the property tax rate will decrease to $0.3324 from $0.3470 per $100 valuation.

The I&S portion will increase to $0.1548 from $0.1480 per $100 valuation. 

The annual impact on the average home value of $324,600 will be a $103.79 increase in the tax bill or an additional $8.65 in monthly escrow payments.
 
RECOMMENDATION
Staff recommends Council approve resolution 23-R-75, accepting the No-new-revenue and Voter-approval rate as submitted by the Guadalupe Tax Assessor Collector, setting a preliminary tax rate, and scheduling public hearings.
 
Attachments
Resolution 23-R-75

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